1.

ILLUSTRATE AND EXPLAIN THE VARIOUS STAGES OF NEW PRODUCT

DEVELOPMENT PROCESS (10 MARKS)

1. Idea generation – brainstorming and coming up with innovative new ideas.

2. Idea evaluation - filtering out any ideas not worth taking forward.

3. Concept definition - considering specifications such as technical feasibility, product design

and market potential.

4. Strategic analysis - ensuring your ideas fit into your business' strategic plans and determining
the demand, the costs and the profit margin.

5. Product development and testing - creating a prototype product or pilot service.

6. Market testing - modifying the product or service according to customer, manufacturer and
support organisations' feedback. This involves deciding the best timing and process for piloting
your new product or service.
 7. Commercialisation – determining the pricing for your product or service and finalising
marketing plans.

8. Product launch – a detailed launch plan can help ensure a smooth introduction to market.

In most cases, a phased approach to the product development process will help you keep
schedule, resources and costs under control.

2. HOW CAN TEST MARKETING BE HELPFUL IN LAUNCHING NEW PRODUCTS

(10)

Test marketing is a tool used by the companies to check the viability of their new product or a
marketing campaign before it is being launched in the market on a large scale.

A test market, in the field of business and marketing, is a geographic region

or demographic group used to gauge the viability of a product or service in the mass market prior
to a wide scale roll-out. The criteria used to judge the acceptability of a test market region or
group include:

1. a population that is demographically similar to the proposed target market; and

2. Relative isolation from densely populated media markets so that advertising to the test
audience can be efficient and economical.
1. Discover manuscript improvements
2. Get product-placement ideas
3. Get more testimonials and endorsements
4. Build buzz
5. Increase the size and involvement of people in your platform
6. Build awareness among prospective buyers in your target markets
7. Predict life-cycle stages, and plan strategies for each
8. Determine if you have the resources to succeed (personal, financial)
9. Increase traffic at your tradeshow booth
10. Test order-fulfillment processes
11. Make promotional campaigns more productive
12. Improve media performances
13. Create a more realistic timeline for putting your promotion plans into action
14. Determine the applicability of content to trends
15. Limit your financial risk
16. Test your overall marketing strategy
17. Create more accurate forecasting
18. Generate new sales opportunities
19. Build strategic partnerships

 Data provided is from actual customer spending

 Reduces the risk of a full-scale launch – if the product fails a test then significant costs
may be saved
 Provides a way to tweak the marketing mix before full launch
 Can create a promotional "buzz" which supports the main launch

OUTLINE AND EXPLAIN THE MAJOR OBJECTIVES OF ADVERTISING (10)

Any paid form of non personal presentation and promotion of ideas, goods, or services by an
identified sponsor

Advertising objectives
A specific communication task to be accomplished with a specific target audience during a
specific period of time

Inform
Build primary demand, e.g. CD producers created awareness
Useful in early product lifecycle

Persuade
To build selective demand – why our brand is best
Comparative advertising
Compare own brand directly or indirectly to one or more other brands

Remind
Remind that product exists; important for mature products

EXPLAIN ANY 3 SALES PROMOTION TOOLS (10)

Consumer promotion tools

1. Sample = A small amount of a product offered to consumers for trial
2. Coupon = Certificate that gives buyers a saving when they purchase a specified product
3. Cash refund offer (rebate) = Offer to refund part of the purchase price of a product to
consumers who send a “proof of purchase” to the manufacturer
4. Price pack (cents-off deal) = Reduced price that is marked by the producer directly on the
label or package
5. Premium = Good offered either free or at low cost as an incentive to buy a product
6. Advertising specialty = Useful article imprinted with an advertiser's name, given as a gift to
consumer (pens, calendars, ...)
7. Patronage reward = Cash or other award for the regular use of a certain company's products
or services
8. Point-of-purchase (POP) promotion = Display and demonstration that takes place at the point
of purchase or sale
9. Contents, sweepstakes, games = Promotional events that give consumers the chance to win
something (cash, trips, goods, etc) by luck or through extra effort

Trade promotion tools

1. Discount = A straight reduction in price on purchases during a stated period of time
2. Allowance = Promotional money paid by manufacturers to retailers in return for an
agreement to feature the manufacturer's product in some way
3. Display allowance
4. Advertising allowance
5. Free goods, push money, specialty advertising items
NB: More sales promotion dollars directed to retailers and wholesalers (68%) than to
consumers (32%)

Business promotion tools (promoting to industrial customers)

– Many of the same tools as for individuals
– Conventions and trade shows
– Finding leads, meeting customers
– Introducing products etc
– Sales contests
– Contest for salespeople or dealers – to improve performance
– Trips, cash prizes, other gifts, performance points exchangeable for something

Distinguish between services from physical products. Explain how tangibility can be
introduced into services (10)

PRODUCTS SERVICES
Tangible Intangible
Result into ownership Doesn’t result in any ownership
Delivery Rendered

Marketing Intelligence
Is seeking information through use of third parties, competitor’s information etc

Differentiated Marketing

Cognitive Dissonance

Discriminatory Pricing
Changing customers different prices for the same product
The product life cycle is derived from on what the organic metaphor that all living things
are born, they grow and inevitably die. Identify and explain the limitations of the product
life cycle? (20)