CHAPTER 9
INTERNAL IDEA SOURCES
Using internal sources, the company
can find new ideas through formal
R&D.
EXTERNAL IDEA SOURCE
Good new product ideas can also be
acquired by businesses from a variety
of outside sources.
IDEA GENERATION
The initial phase in the development of
new products is idea generation, or the
rigorous search for new product
concepts.
CROWDSOURCING
Many companies are increasingly
creating open-innovation or
crowd sourcing programs for fresh
product ideas. Strong new ideas can
come from a variety of sources, both
inside and outside the firm.
IDEA SCREENING
The goal of idea screening is to identify
strong ideas while quickly eliminating
bad ones.
PRODUCT IDEA
is a design for a prospective item that
the business might sell on the market.
PRODUCT CONCEPT
is a thorough explanation of the idea in
language that the general public can
understand.
CONCEPT DEVELOPMENT
It is a methodical process to create an
idea, establish what client market is
interested in purchasing it, and
determine whether buyers appreciate
your idea.
CONCEPT TESTING
Testing new product concepts on
target consumer groups is known as
concept testing.
MARKET STRATEGY DEVELOPMENT
Marketing strategy development
Designing an initial marketing strategy
for a new product based on the
product concept.
BUSINESS ANALYSIS
Business analysis involves a review of
the sales, costs, and profit projections
for a new product.
PRODUCT DEVELOPMENT
Creating a physical product from the
product concept to ensure that the
product idea can be turned into a
viable market offering.
TEST MARKETING
If the product passes both the concept
test and the product test, the next step
is test marketing, the stage at which
the product and its proposed
marketing program are tested in
realistic market settings.
COMMERCIALIZATION
Introducing a new product into the
Market. Test marketing gives
management the information needed
to make a final decision about whether
to launch the new product.
MANAGING NEW PRODUCT DEVELOPMENT
Introducing a new product into the
Market. Test marketing gives
management the information needed
to make a final decision about whether
to launch the new product.
Customer-Centered New Product Development
The client must always come first when
developing new products. When
exploring for and developing new
goods, businesses frequently place an
undue emphasis on technical
research in their R&D labs.
Team-Based New Product Development
Under this approach, company
departments work closely together in
cross-functional teams.
Systematic New Product Development
rather than being fragmented and
chaotic. Otherwise, few new ideas will
surface, and many good ideas will
sputter and die
Product Life-Cycle Strategies
Management wants the new product
to live a long and prosperous life after
its release.
The PLC has five distinct stages:
1. Product development
begins when the company finds and
develops a new product idea.
2. Introduction
is a period of slow sales growth as the
product is introduced in the market.
3. Growth
is a period of rapid market acceptance
and increasing profits.
4. Maturity
is a period of slowdown in sales
growth because the product has
achieved acceptance by most potential
buyers.
5. Decline
 is the period when sales fall off and
profits drop.
FADS
are brief periods of extremely high
sales fueled by customer fervor and
spikes in brand or product recognition.
Product Decisions and Social Responsibility
Marketers should carefully consider
public policy issues and regulations
regarding acquiring or dropping
products
International Product and Services Marketing
International product and services
marketers face special challenges. First,
they must figure out what products
and services to introduce and in which
countries
CARREFOUR
It is the leading retailer in Europe,
Brazil, and Argentina and the largest
foreign retailer in China.
CHAPTER 10
PRICE
The sum of all the values of the
customers
Only element in marketing mix
Two Broad Strategies
1. MARKETING SKIMMING PRICING- set high
initial price
2. MARKETING PENETRATION PRICING- set low
initial price
5 PRODUCT MIX PRICING SITUATION
1. PRODUCT LINE PRICING
Takes into the account cost difference
between products in the line, customer
evaluation of their competitor price
2. OPTIONAL PRDUCT PRICING
Takes into account optional or
accessory products along with the main
product
3. CAPTIVE PRODUCT PRICING
Involves products that must be used
along with the main product
4. BY PRODUCT PRICING
Refers to the products with little or no
value produced as result of the main
product
5. PRODUCT BUNDLE PRICING
Combines several products and offer
bundle at the reduced price
PRICE ADJUSTMENT STRATEGIES
DISCOUNT AND ALLOWANCE PRICING
Reduces prices to reward customer
ALLOWANCES
Trade allowance for turning in an old
item when buying one
SEGMENTED PRICING
When the company sells a product at
two o more prices even though the
difference is not based on cost
CUSTOMER SEGMENTED PRICING
When different customer pay for
different prices for the same product
PRUDOCT FORM SEGMENT PRICING
When different version of product are
priced differently but not according to
different cost
LOCATION PRICING
When the product sold in different
geographic
TIME PRICING
When a firm varies its prices by the
season
PSYCHOLOGICAL PRICING
Occurs when the seller consider the
psychology of prices
REFERENCE PRICE
Prices carry in their minds
PROMOTIONAL PRICING
When prices are temporarily priced
below list
LOSS LEADERS
Product sold below cost to attract
customers in the hope they will buy
SPECIAL EVENT PRICING
Used to attract customer during season
CASH REBATES
Are given to consumers who buy
product within specified time
GEOGRAPHICAL PRICING
Used for customer in different parts
of the country
FREE ON BOARD PRICING
Goods are placed free on board carrier
Who pays the freight from the factory
UNIFORMED DELIVERY PRICING
Company charges the same price plus
freight to all customer
ZONE PRICING
Company set up two or more zone
BASING POINT PRICING
Seller selects given city and charges all
the customer freight cost
FREIGHT ABSORB PRICING
 Seller absorb all or the part of the 3. ADMINISTERED VERTICAL MARKETING SYSTM
actual freight cost Has few dominant channel member

DYNAMIC PRICING FRANCHISE ORGANIZATION

Prices are adjusted dynamically Link several stages in production
INTERNATIONAL PRICING MAJOR ALTERNATIVES
Prices are set in specific in country INTENSIVE DISTRIBUTION- Colgate
PRICE CUTS SELECTIVE DISTRIBUTION- tv
Reduction in selling price EXCLUSIVE DISTRIBUTION- LUXURY ITEM
PRICE INCREASE- increase in selling price
PRICING WITHIN CHANNEL LEVELS
PRICING FIXING
Seller must set price without talking to EXLUSIVE DISTRIBUTION
competitors Seller allows only certain outlets
PREDATORY PRICING EXCLUSIVE DEALING
Selling below cost to punish Sellers requires that the seller will not
competitors handle competitors product
PRICING ACROSS CHANNEL LEVELS EXCLUSIVE TERITORRIAL AGREEMENTS
RETAIL PRICE MAINTENANCE Where producer or seller limit
Manufacturer requires the dealer to territory
charge a specific retail price TYING AGREEMENT
DECEPTIVE PRICING Agreements where the leader must
Seller states r prices or price saving take all
that mislead consumers MARKETING LOGISTICS
Involves planning, implementing and
CHAPTER 11 controlling physical goods
UPSTREAM PARTNERS SUPPLY CHAIN MANAGEMENT
Include raw material supplier Process of managing upstream and
DOWNSTREAM PARTNERS downstream
Include the marketing channels MAJOR LOGISTIC FUNCTION
SUPPLY CHAIN  WAREHOUSING
“MAKE AND SELL” factory capacity  TRANSPORTATION
DEMAND CHAIN  INVENTORY MANAGEMENT
“SENSE AND RESPOND” suggest that  LOGISTIC INFORMATION MANAGEMENT
planning starts with the needs of the WAREHOUSING DECISION
target customers  HOW MANY
INTERMEDIARIES  WHAT TYPE
Offer producer efficiency in making  LOCATION
goods available to target market  DISTRIBUTION CENTER
CHANNEL BEHAVIOR INEVENTORY MANAGEMET
MARKETING CHANNEL  JUST IN TIME SYSTEM
Consist of firm that have partnered  RFID
common good  SMART SHELVES
CHANNEL CONFLICT LOGISTIC INFORMATION MANAGEMENT
Refers to disagreement over goals Is the management flow of the
COVENTIONAL DISTRIBUTION SYSTEM information
Consist of one or more independent
producers
VERTICAL MARKETING SYSTEMS ELOISA DY
Provide channel leadership BSHM
1. CORPORATE VERTICAL MARKETING SYSTEM
Integrate successive stages of
production
2. CONTRACTUAL VERTICAL MARKETNG SYSTEM
Consist of independent firm at
different level