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Short Notes 1. Stage Gate Approach in New Product Development
Short Notes 1. Stage Gate Approach in New Product Development
Suggested Answer
Short Notes
1. Stage Gate Approach in New Product Development.
Many top companies use the stage gate system to divide the innovation process into stages with a gate or
checkpoint at the end of each.
2. Marketing channels
To reach a target market, the marketers uses 3 kinds of marketing channels
¾ Communication channels deliver and receive message from target buyers and include newspaper,
magazines, radio, tv, billboard and internet.
¾ A distribution channel is used to display, sell, or deliver the physical product or services to the buyer or
user. It includes distributors, wholesalers, retailers and agents.
¾ Service channels is used to carry out transactions with potential buyers.It include warehouses,
transportation companies, banks, and insurance companies that facilitate transactions.
Marketer faces a design challenge in choosing the best mix of communication, distribution, and service channels
for their offering.
3. The Buying Centre
The buying center consists of all those individuals and groups who participate in the purchasing decision‐
making process, who shares some common goals and the risks arising from the decisions. The buying center
includes all members of the organization who play any of the following seven roles in the purchase decision
process.
Initiators‐ are users or others in the organization who request that something be purchased.
Users ‐are those who will use the product or service. In many cases, the users initiate the buying proposal and
help define the product requirements.
Influencers‐ are people who influence the buying decision, often by helping define specifications and
providing information for evaluating alternatives.
Deciders‐ are people who decide on product requirements or on suppliers.
Approvers‐ are people who authorize the proposed actions of deciders or buyers.
Buyers ‐are people who have formal authority to select the supplier and arrange the purchase terms. Buyers
may help shape product specifications, but they play their major role in selecting vendors and negotiating.
Gatekeepers‐ are people who have the power to prevent sellers or information from reaching members of the
buying center.
4. Behavioral Segmentation
It divides buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.
a. Needs and Benefits: Not everyone who buys a product has the same needs or wants the same benefits from it.
Needs‐based or benefit‐based segmentation is a widely used approach because it identifies distinct market
segments with clear marketing implications.
b. Decision Roles: People play five roles in a buying decision: Initiator, Influencer, Decider, Buyer, and User.
c. User and Usage: variables related to various aspects of users or their usage—occasions, user status, usage rate,
buyer‐readiness stage, and loyalty status—are good starting points for constructing market segments.
• Occasions: We can distinguish buyers according to the occasions when they develop a need, purchase or
use a product. For example, air travel is triggered by occasions related to business, vacation, or family.
• User Status: The key to attracting potential users, or even possibly nonusers, is understanding the reasons
they are not using. Included in the potential‐user group are consumers who will become users in
connection with some life stage or life event. Mothers‐to‐be are potential users who will turn into heavy
users.
• Usage Rate Heavy users are often a small slice but account for a high percentage of total consumption
5. Straddle Positioning
Occasionally, a company will be able to straddle two frames of reference with one set of point‐of‐difference and
point‐of‐parity. In these cases, the points‐of‐difference for one category become point of parity for other and vice
versa.
Long Questions
6.TATA SIA joint venture called Vistar has launched low cost Airlines recently in India. What steps the company
should adopt in devloping effective Communications for Vistar?
Low cost airlines concept is not new for Indian Market. Indigo, spicejet etc are some known players in this
segment and TATA Vistar will be a new player in this segment. The nature of low cost airlines is to provide the
basic necessity and basic service that the customer is already paying for .As in this case the target segment
are clear .The company objective is to tap middle and low income families, so the communication plan should
be designed accordingly.
Steps in developing effective Communication
a. Identify target audience: Middle and low income class
b. Determine objectives
• Category need: Perceived discrepancy between a current motivational state and desired motivational
state.
• Brand Awareness: Consumer ability to recognize and recall the brand
• Brand attitude: Helping consumers evaluate the perceived ability of the brand TATA Vistar
• Brand Purchase intention: Moving consumers to decide to purchase the brand TATA Vistar
c. Design communications
• Message Strategy: Themes of common man need at emergency time
• Creative strategy: Bring the expression of a middle class and lower class family
d. Select channels
• Personal Communication Channel
• Non personal( mass) Communication channel
e.Establish budget
• Affordable method
• Percentage‐sale‐ method
• Competitive method
• Objective and task method
f. Decide on media mix
• Advertising: Mass media
• Public Relation and publicity
• Events & Experiences
• Direct and Interactive Marketing
• Personal Selling: Travel Agents, Hotels
• Word of mouth Marketing
7. An established FMCG company in India is planning to introduce water purifier. What channel design decisions
should the Company keep in mind while launching this product?
Answer.
Channel Design decisions
a) Analyzing Customer needs and wants
b) Establishing objectives and constraints
c) Identifying major Channel Alternatives
Types of Intermediaries
Number of intermediaries
Terms and responsibilities of Channel member
d) Evaluating major Channel member Alternatives
Economic criteria
Control and adaptive Criteria
Case Study
8. a. Mc Donald`s followed fundamental `Consistency’ rule in offering products of uniform size, price and quality
in all the market it operated. However, in India the Company went for an entirely different approach. Explain
why McDonald`s went for customization in India
a. Big Market Size
b. India doesn’t really fit their ‘typical kind of market'
c. Cultural Factor
d. To gain acceptance locally
e. Willingness to pay of Indians
f. In response to changing consumer taste
g. Perception of Indian consumer
8. b. Both McDonalds and Dominos customized their menus to India tastes. Explain the difference in their
positioning approaches.
Positioning is the act of designing a company`s offering and image to occupy a distinctive place in the minds of
target customer. Positioning requires that marketers define and communicate similarities and differences between
their brand and its competitors.
Deciding on a positioning requires determining a frame of reference by identifying the target market and relevant
competition, and indentifying the optimal points of parity and points of difference brand associations given that
frame of reference.
Positioning approach of McDonalds
Mc Donald`s tried to position itself as a family restaurant, highlighting its ‘Indian menus’, and trying to increase
awareness about its positioning through campaigns
Positioning approach of Domino in India
Domino made effort to give its product a local flavor. It even offered different products in different regions. Its
target customers are convenience‐minded pizza lovers and focus on delivery speed and good quality.
Difference in positioning of McDonalds and Dominos
Mc Donald`s tried to position itself as a Indian taste while Domino focused of local and regional taste of India one
step ahead than Mc Donald.
Mc Donald`s tried to attract families by saying family restaurant, While Domino target customers are convenience‐
minded pizza lovers.