If a product is not showing profitable performance, the company may consider one of the alternatives, viz., improve, buy or drop the product. Improve If the firm continues to make the product, it may be required to make improvement in its production or distribution so as to yield adequate return. Improvement may mean re-designing the product or producing it at a lower cost. Product improvement is particularly necessary when the existing product has become apparently obsolete or out of fashion. Indian companies need to continuously upgrade their products and technology to withstand the pace of change in their business environment and to meet the challenges thrown up by the emergence of a buyer’ market. Product improvement is very important in durable goods, for example, automobiles, refrigerators, etc. This explains the development of a camera with a built-in coupled exposure meter, which proved to be aContinue reading
Marketing Management
Marketing management combines the fields of marketing and management. Marketing consists of discovering consumer needs and wants, creating the goods and services that meet those needs and wants; and pricing, promoting, and delivering those goods and services. Doing so requires attention to six major areas – markets, products, prices, places, promotion, and people. Management is getting things done through other people. Managers engage in five key activities – planning, organizing, staffing, directing, and controlling. Marketing management implies the integration of these concepts.
Factors determining the scope of the product line
The extent to which a company can add new products is not unlimited. Very often, the scope for having new products is in some way related to the existing conditions of the firm. The goods may be : 1. Cost Related Goods A company may decide to add a product which may be the result of a common production process. For example, a company which strikes oil may decide to produce petrol or mobil oil, kerosene, gas, wax, etc. A company producing sugar may decide to produce molasses. 2. Demand Related Goods A firm may decide to add a product which is jointly demanded. For example, manufacturers of Sulekha Ink have gone in for production of other related items of stationery like sealing wax. Food Specialities Ltd. added Maggi to their various food products. Weston Electronics, manufacturers of tape recorders, colour TV sets,Continue reading
Why Firms Introduce New Products Into Markets?
Excess Capacity as a Reason for Expanding Product-line The presence of excess production capacity is, perhaps, the most important single factor leading to product-line diversification. Broadly conceived, excess capacity is said to exist when it would cost the multiple-product firm less to make and sell the new product than it would cost a new company set up to produce only that product. Excess capacity may occur for several reasons. It may be the result of an unduly over-optimistic estimated market for the firm’s products. In such a case, if anticipated level of demand is not forthcoming, the firm develops excess capacity. Excess capacity may be due to seasonal variations in demand also, the latter being a result of weather and custom, e.g., greeting cards, ice-cream, etc. Companies faced with seasonal demand for their products would certainly find it advisable to add to their product-line in off-season a new product toContinue reading
Different types of product testing
After the product development, generally firms conduct a product testing that one could testify the accuracy of the information on the basis of which various stages were completed. These commercial experiments are necessary to verify earlier business judgements. Thus, the object of this stage is basically to assess whether the product meets the technical and commercial objectives at various levels in order to ascertain the product acceptability. There are three types of tests usually conducted : Concept Testing, Product Testing, and Test Marketing Concept Testing This is concerned with measuring customer reactions to the idea or concept of a product. In fact, it is a kind of research in which the product idea is screened before any money, time or labour are committed to making the prototype products. The idea of a product with as many details as possible is made knownContinue reading
The Concept of New Product Development
Definitions of New Product Development New Product Development is a process which is designed to develop, test and consider the viability of products which are new to the market in order to ensure the growth or survival of the organization. New Product Development can be defined as the process of innovating and inventing new ideas and concepts, with a view to developing a successful new product in the anticipation of customer needs. The new product development can be defined as the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the new product development process. The first involves the idea generation, product design and detail engineering whereas the other involves market research and marketing analysis. Basically, Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategicContinue reading
Introduction to Market Segmentation
Market is composed by the customers and sellers, and different customers may have different needs, characteristics, behavior or buying attitudes. Each customer is a separate entity, they have unique wants. Therefore, sellers may divide a market into different groups of individual markets. Every consumer group is a market segment, each segment are the tendency of buyers with similar wants or needs. They divide the market into distinct groups who have distinct needs, wants, behavior or who might want different products and services. This action is known as marketing segmentation. The modern concept of market segmentation was put forward by Phillip Kotler, who states that market segmentation is the “sub dividing of a market into homogenous subsets of customers, where any subset may be conceivably be selected as a market target to be reached with a distinct marketing mix“. It is a concept in economics and marketing. Marketing segmentation is marketersContinue reading