The Marketing Strategies and the Objectives Providing a Better Acceptance in the Markets - Research Paper Example

 Introduction: Producers at all times look to add newer products to their profiles. This however is not as simple as it sounds and there are a number of different aspects that are required to be kept in mind while working on developing new products for a company. Development of a new product is always very risky, expensive and time consuming. Since new product development requires high amounts of funds, thus, managing the development of the product is very important. There are two main meanings to new product development. These can be through acquisition or even development of a product from scratch. Managing the new product development is an important factor in a number of different aspects like costs, time and risks. Thus a number of studies have shown and highlighted that an organised approach to this would prove to be very beneficial for the companies. New Product Development: A number of researches by various scholars and authors have helped derive an eight stage new product development process. This organised manner of developing a new product allows for the product to be more beneficial to the customer alongside being a successfully developed product. The figure below (Figure 1) provides a clear picture of the various steps involved in developing a new product. Figure 1: Eight Step New Product Development Process (Jobber, 2004). New Product Strategy: When a new product is being developed, it is natural for the marketing directors to seek advice from the senior management about their vision and priorities pertained to the new product. Here the senior management can provide information which will allow for clarity in what needs to be focused on by the marketing team while introducing the product in the market. Also with a detailed understanding of what the management’s objectives are, i.e. either gaining market share, profitability etc., the marketing team and can provide clear indicators for the screening criteria. Idea Generation: Once there is a clarity in the main objective of the senior management, then this is used as a base for all employees within the company to work on finding newer opportunities that would meet up to the objectives that have been set down. There are a number of different steps taken within companies to bring out best ideas from within the companies i.e. scientist, sales people, marketers, etc. Thus some companies also use brain storming as a technique to inspire and motivate creation of newer ideas. This stage is where ideas are born, following which a screening stage is held. This will be discussed in the next section. Screening: This stage is where the ideas that have been perceived are checked for their commercial worth. There are a number of different methods that are followed by companies. Some companies also provide for checklists which allow for a better judgement of whether or not the product would be beneficial for the company and whether it should be accepted or rejected (Kotler, 2007). Here an analysis is made to evaluate whether or not the product is in sync with the objective of the company’s objectives. Also an analysis of whether or not the company will be able to produce and market the product is also analysed at this stage. Concept Testing: Following the screening process, and once a product idea is considered to be worthy for investigations, the next step is check whether the concept of the product would work well with the potential customers. This stage allows for the customers to participate in the new product development at the early stages itself. Here the potential customers have a chance to state their views and also state if they perceive any benefits that accrue from the product. This concept has mainly come into practice as it allows to see for customer reactions in the early stages and thereby make any necessary changes to the product to meet up to the customer’s expectations and needs (Murphy, 2003). Business Analysis: This is a very important stage in the development of new products. Post the previous two stages, and based on those stages, the senior management now require making some important decisions and estimates like the sales, profits and costs. To ensure that the figures that are being estimated are accurate, companies undertake marketing analysis. A sure cost analysis is required to be made, and this is mainly dependent on the market. Also calculation of the break even is required to be made, where the company can estimate when they would be able to make up for their investments and move into the profit making stage. Also a sensitivity analysis is required to be conducted by the companies in which details of the possible variations from the assumptions of the sales, costs etc will be got and this proves to be very beneficial for the company (Jobber, 2004). Product Development: Here the concept of the product is developed into the physical product. Here the research and development team along with the engineering team of the companies work together to produce the physical product. There are a few aspects that require to be considered here in this stage: a) A clear mission is to be set down by the senior management and a set of clear objectives need to be set down. b) The concerned teams required for the production need to be appointed. c) A clear plan is required to designed and a project leader is to be assigned to lead, manage and evaluate the members of the team d) The concerned members of the teams require to be assigned with their responsibilities and the core members are required to share their responsibilities as well. e) Finally an executive sponsor needs to be from the senior management is required to handle and ensure that all communication and all dealings between the employees and top management are made. Also they would require to act as coaches and mentors for the team leaders and the one point of contact for the teams as well (Jobber, 2004). Market Testing: Once the product has been developed and has been produced, a market testing will be conducted. In the previous stages the customer’s opinions have been taken to understand whether or not the customers would buy the product. In the market testing, the product will be put into the market to get a feel of the number of customers who are willing to pay for the product to buy it. This is mainly a limited number of units of the new product will be floated into the market to see for the demand of the product (Jobber 2003). There are two main methods that are used for this, i.e stimulated market test and the test marketing. In the first method the product is floated into the real market to gain a feel of the entire market and the demand for the product. On the other hand, in the second method, a few geographic locations are chosen where the company intend to market the goods. Commercialisation: This stage is basically one where the company decides based on the previous stages strategies to sell the product and to reach out to the target customers. Here the main idea is to find the best way to commercialise the product and to reach out to the right markets and to create an impact within the markets. Conclusion: Based on the above discussion it is clear that companies have a lot of ground work which is required to be completed before introducing a new product into the market. There however, might be a number of products which do not require going through all the above mentioned stages, but will have to go through at least a few of the above mentioned stages. It is essential for companies to understand the importance of these stages as the amounts of monies that are invested in the development of a product is a lot and companies need to make informed and well backed up decisions at all times (Murphy, 2003). 1. Describe the stages of the product life cycle. Introduction: According to Jobber (2003, p.229), “a product is anything that is capable of satisfying customer needs”. It is essential to understand that the needs of a customer change over time. These changes in the needs of the customers, to a great extent lead to the changes in the products as well. Stages of Product Life Cycle: Understanding and analysing the various changes that take place during the period of that a product is in a market is referred to as the product life cycle. Every product has four majorly stages that it passes by during its time within a market. These stages can be classified into: introduction, growth, maturity and decline. This is clear from the below figure. Figure 2: Product Life Cycle (Barkhouse, 2009, Jobber, 2004). Each of these will be discussed in detail below: Introduction: This is the first stage for any product. Here the companies generally tend to operate in a number of losses, mainly because of the fact that the company has huge sums of monies that have been invested into the development and the promotion of the product. This stage acts as a testing and trial period for a lot of products. Companies usually use this period to learn about how well the product is being adopted into the market. In case the product does not show a promising growth, the companies also have a chance of terminating the product at this stage. One of the finest examples for companies that normally use this to their advantage is Samsung. Samsung is one of the companies which believe in trials, it develops and created new products with a number of new features and benefits for consumers. However if the product does not work well, it is taken out of the market at this stage itself (Jobber 2004). There is no need for immediate profits, and this is not a pressure for companies. This stage is mainly to introduce the product and promote the product to as many people as possible. It is also essential to understand that during this period, the marketing strategy objectives mainly revolve around building the product. Also here the major strategic focus is on expanding the product and ensuring a better brand awareness. Also here the prices of the products are generally high (Jobber, 2003). Growth: This is the second stage of the product life cycle. Here in this stage the sales and profits of the product grow at faster rates. There is also the factor of market acceptance that is gained here at this stage. The start of this stage generally finds the products gaining in terms of profits and sales and a rapid acceptance is seen within the markets. This however is a for a period, and the latter end of this stage generally finds the profits to be declining, This is majorly due to the fact that there are new entrants within the market, which creates the product demand to be reduced. The main cause for the new entrants within the markets is majorly because of the sales growth and the growing demand and high potential for profits (Jobber 2004). For a number of products, this stage also leads to reduced costs which are majorly due to the economies of scale. Also the public awareness of the product is much higher here and the pricing strategy used here is majorly to try to maximise the market share. Again within this stage the major strategic marketing objective is to continue to build the product, which is now differentiated due to increase of competition within the market. Here the prices are generally lowered to enable competition with other companies and also the distribution is higher at this stage. There is also a higher emphasis on product awareness and brand building (Jobber, 2003). Maturity: Post the growth period of the product life cycle, the next stage that is entered into is referred to as the maturity stage. Here the sales of the product tend to peak and then flatten out. This is majorly due to saturation. Here there is a battle for a stand in the market by all the competitors. This stage in the life cycle of a product requires a lot of advertising, product improvements, sales promotion offers, dealer discounts, and price cutting. This is essential for companies to keep their stand within the market, against all their competitors. There is a lot of strain that is got on the profit margins due to all these efforts however this is one of only ways for the product to be retained within the markets (Jobber 2004). Also a lot of branding activities are essential here and these are severely recognised in the maturity stage for the products. Companies who rightly brand their products can be highly recognised to be brand leaders and this allows for a little lesser strain on the profit margins. Here the strategy for marketing is more of in a hold situation than with a build objective. This is majorly because the major focus here is to try and maintain the brand awareness and stick on to the customers (Jobber, 2003). At this stage the price of the product is generally the lowest and the promotion to a great extent is to increase the repeat purchases. Decline: the sales and profits of products are majorly affected in this stage. Here there is an intense decline in the demand for the product and this is majorly due to the high levels of growth of technology. Also another major determinant that causes the decline of a product is the change in consumer tastes (Barkhouse, 2009). Here the levels of production can also be affected if the suppliers decide to completely cease production or even reduce the number of units that are produced for the product. Also the products are faced with a complete decline in the profitability. Also the promotion activities are completed stopped in this stage as the production and distribution costs become very difficult to keep up to with the decline in the demand. Unlike all the other stages, here the marketing strategy is majorly to manage the cash and divest. The distribution of the products to a great extent is selective and the prices are normally seen to be rising again (Jobber 2004). The promotion activities are to be eliminated to a great extent and the strategic focus is majorly on productivity. Conclusion: The product life cycle allows for a better understanding of the various stages that a product goes through while in the markets. This has also allowed for a better understanding of the various elements that require to be concentrated on at every stage of the product in the market. Also the discussion allows for a better understanding as to the marketing strategies and the objectives that can be used at each stage of the product’s life cycle, thereby ensuring that the funds are used more accurately. Also this ensures that care is taken for the products and every step is taken to provide a better acceptance in the markets. Bibliography Barkhouse, D., 2009, ‘Week 4: Product life Cycle’, Accessed on 27th February 2009, Retrieved from http://www.barkhouse.me.uk/MBA/Module%205/week%204/Week%204%20DQ%203.htm Jobber, D., 2003, ‘Principles and practice of Marketing’, p. 229, 3rd edition, McGraw – Hill, Berkshire Jobber, D., 2004, Principles and Practice of Marketing, 4th Edition, McGraw – Hill, Berkshire Kotler, P., & Armstrong, G., 2007, ‘Principles of Marketing’, 12th edition, 9 March 2007, Prentice Hall Murphy, D., 2003, ‘Innovate or die’, Marketing Business, May 16 – 18 Read More