Homework Assignment No. 8 Part 2

Chapter 10 Explain the importance of developing new products and describe the six categories of new products. New products are important to sustain growth and profits and to replace obsolete items. New products can be classified as new-to-the-world products (discontinuous innovations), new product lines, additions to existing product lines, improvements or revisions of existing products, repositioned products, or lower-priced products. To sustain or increase profits, a firm must innovate. 1.1 How many new products can you identify? Visit the supermarket and make a list of at least 15 items with the word “New” on the label. Include on your list anything that looks like a new product. Next to each item on your list, write the category of new product that best describes the item. Share your results with the class. 1.2 New entertainment products aren’t necessarily media products. Form a team of three or four students and brainstorm new non media entertainment products. Try to identify one item for each of the categories of new products discussed in the chapter. 1.1 Following are the 15 items that were identified as “new” products in XYZ super market: 1. ABC Company smart 3D Television – New-to-the-world product 2. Women energy bar with raisins – Revisions of existing product 3. Diet tomato soup – Repositioned product 4. Sanitary wash advanced pro – Improvement in existing product 5. New flavor potato chips – Addition to existing product line 6. Detergent small pack – Lower-priced product 7. New shampoo – New product line 8. New magazine launch – New product line 9. New vacuum cleaner – Addition to existing product line 10. L-shaped antique dresser – Improvement in existing product 11. New tooth paste – Addition to existing product line 12. Non scratch sponge scourers – New product line 13. New cake mix – Addition to existing product line 14. Special organic biscuits – New product line 15. Mini cherry chocolate bread – Addition to existing product line Following are non media entertainment products and their respective product categories: 1. New-to-the-world – Green toys made of recycled plastic and other environmentally friendly materials 2. New product line – A renowned author who is renowned for writing cooking books started publishing travel books (new product line) 3. Addition to existing product line – A manufacturer who provides drums started producing drum-sticks 4. Improvements or revisions of existing product – Small rule changes in Car Racing with addition of a five second penalty for minor offenses 5. Repositioned products – XYZ magazine planned to target students but later repositioned itself as sports magazine to target men 6. Lower priced products – PQR fashion magazine introduced new periodical at a low price so that it can be bought by all market segments Question Designing usable and intriguing products is an integral part of Kodak’s marketing process. Paul Porter, director of corporate design and usability, focuses on creating interesting, functional, and intuitive equipment. To make sure the company is on the right track with product development, Kodak marketers interview customers and visit them in their own homes, observing how families use digital photography. The understanding gained from these interactions helps the company create a wide range of products targeted at different market segments. What kind of new product was EasyShare 1? Answer From watching the video, determine the kind of new product EasyShare-One was categorized under. The six new product categories are as follows: new-to-the-world, new product line, addition to existing product line, improvement/revision of existing product line, repositioned product, and lower-priced product. Choose the categorization that most closely models the product in its conception and introduction into the market. Question: Meet Larry Jones, a former toy designer for the likes of Hasbro, Mattel and Playmates Toys. Displaced when the industry turned to electronic toys, the irrepressible Jones is hard at play designing captivating candy concepts for niche manufacturer Kandy Kastle. He is not a confectioner, nor does he aspire to be one. Instead, Jones tinkers with candy delivery mechanisms and silly, sometimes grotesque names sure to capture the eyes, imaginations, and tummies of youngsters. His products belong to the $250 million, non chocolate segment of the U.S. novelty candy market. It’s the third largest segment of the sweets market, behind chocolate and chewy treats such as gummy candies, licorice, and taffy. The market has been flat in recent years, but several former toy designers and a slew of hobbyist designers are beginning to breathe new life into the industry. Their creations range from the simply fun to the outright goofy, and candy makers pay handsomely in hopes of landing the next big hit. Two of Jones’s latest hits include the Big Barf and the Big Burp. Repulsive though they sound, both are just mouth-shaped, sound-generating dispensers for harmless gumballs. Though items like the Big Barf reek of a style unique to Larry Jones, he is just one of a new breed of novelty candy container designers who are hoping to create the next confection legend that might someday be mentioned in the same breath as the almighty Pez. As action figures, toy trains, and other traditional toys are increasingly overshadowed by their digital counterparts, inventors and their employers are betting that products that combine toys with candy curiosities are positioned to capture the dollars left behind by that fading market. Deirdre Gonzalez, vice president of marketing for Cap Candy, says the reinvigorated novelty The candy market is “a hybrid business between the two industries.” Often priced from $.99 to $1.29, Candy items sold with toy novelties are now attracting dollars that used to be reserved for lowend toy purchases. And the competition is as fierce as children’s tastes are fickle. In addition to Kandy Kastle, companies like Cap Candy and Candy Planet race each other to develop new products, while the likes of Willy Wonka and Jelly Belly battle to promote their lines with tie-ins to blockbuster children's movies. Even independent entrepreneurs are getting in on the act. Two married couples quit their postal service jobs to form BAAT Enterprises (from their names: Bill, Ann, Ann, and Tom) and introduced the Spin Pop, a rotating motorized sucker. A modern take on the Ring Pop, the Spin Pop sold almost 6 million units in under two years. What’s cool with kids is fleeting, though. New products must be developed every month to keep up. Larry Jones, for example, did not rest on the laurels of his gastrointestinal gumball designs. He is also the wiz behind Ear Wax, Big Toe Goo, Tar Pits, Hose Nose, Brain Drain, and glow-inthe-dark Lightning Bugs. “What I’m after is to have the kid have a little bit of magic or a little giggle while eating his candy,” Jones says. Kandy Kastle is relying on him to come up with a host of interesting fare based on the hugely popular Hello Kitty brand, too. Originality is key. The children in this market space, aged 4 to 12 years, are increasingly savvy consumers and they are gaining influence and even buying power. Influence with parents is crucial, of course, but sway with other kids in the peer group is more critical. Rose Downey, marketing manager at Au’Some Candy Company, puts extra emphasis on word-of-mouth endorsements for her company’s novelty products. “We feel that the right way to grasp the kids’ attention is word-of-mouth advertising,” she says. “Kids trust other kids’ judgment,” she continues. “If Child A buys the product and it tastes great and looks cool and is fun, Child B is going to want the product and so on. Trust the kids. They know best when it comes to candy.”4 Based on what you read in the case, what do you think Kandy Kastle’s new-product development strategy is? Why do you think the development of the Hello Kitty product line is important? Answer: A) A growth strategy is an association's arrangement for beating current and future difficulties to understand its objectives for an extension. Instances of growth strategy objectives incorporate expanding pieces of the pie and income, procuring resources, and working on the association's items or administrations. B) One approach to develop is by fostering a current or new item to meet or surpass client assumptions. On the off chance that your clients love your item, they'll stay with you, and enlighten their companions regarding it. It'll make a viral circle, so you'll keep on winning new clients through certain informal references. A growth strategy allows companies to extend their business. Growth can be accomplished by rehearsing like adding new areas, putting resources into client procurement, or extending a product offering. An organization's industry and target market impact which growth systems it will pick. C) Diversification is a risk management strategy that blends a wide assortment of speculations inside a portfolio. An expanded portfolio contains a blend of unmistakable resource types and venture vehicles with sights set on restricting openness to any single resource or hazard. Overall, yield higher long-haul returns and lower the danger of any singular holding or security. D) Diversification allows for more assortment and choices for items and administrations. Whenever done accurately, expansion gives a gigantic lift to mark pictures and friends' productivity. Broadening can be utilized as a safeguard. By broadening items or administrations, an organization can shield itself from contending organizations. Explain the steps in the new-product development process. First, a firm forms a new-product strategy by outlining the characteristics and roles of future products. Then new-product ideas are generated by customers, employees, distributors, competitors, vendors, and internal personnel. Once a product idea has survived initial screening by an appointed screening group, it undergoes business analysis to determine its potential profitability. If a product concept seems viable, it progresses into the development phase, in which the technical and economic feasibility of the manufacturing process is evaluated. The development phase also includes laboratory and use testing of a product for performance and safety. Following initial testing and refinement, most products are introduced in a test market to evaluate consumer response and marketing strategies. Finally, test market successes are propelled into full commercialization. The commercialization process involves starting up production, building inventories, shipping to distributors, training a sales force, announcing the product to the trade, and advertising to consumers. 2.1 List the advantages of simultaneous product development. Advantages of simultaneous product development: • It saves time as several departments in the company work together so that they can contribute to product design as frequently as possible • Due to open interaction between all the departments, any issues which arise in the development process can be resolved easily • Mitigates miscommunication between departments 2.2 You are a marketing manager for Nike. Your department has come up with the idea of manufacturing a baseball bat for use in colleges around the nation. Assuming you are in the business analysis stage, write a brief analysis based on the questions in the “Business Analysis” section of the chapter. Answer:- The business analysis would help me to know that the new business idea of manufacturing a baseball bat would be a good business or not for Nike.For this the business analysis can be done by Using SWOT analysis for this business idea. The SWOT analysis is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning for this project. StrengthsThe strengths for this new business idea are that Nike has a good brand Image in sports equipment. so manufacturing and selling can increase because of Brand image. NIke has a good loyal customer base which are mostly students of colleges and universities so it may benefit the Company in sales. WeaknessesThis is new idea which NIke has no experience so it could be a weakness.The new resources and skills are required for manufacturing Baseball and lack of such can be problematic OpportunitiesThere are many opportunities for this like- Increasing product line as well new market share. chances of making big sale contracts with universities and colleges to purchase Nike baseball in bulk for their students. High chances of profit cause this business idea. ThreatsThe only threats could be Competitors like Adidas, Rebook which can imitate the idea if our business was successful. 3.1 A product that a potential buyer knows about but is not actively seeking is called an unsought product. Is the marketing of unsought products unethical? Discuss your answer in terms of the AMA Statement of Ethics, found at www .marketingpower.com. Unsought products refers to that segment of products which exists in the market, public is also aware of such products but is not actively seeking them. The marketing of such products is not ethical. Marketing is a strategy to place the product in consumers' minds in the right manner; it is not unethical if the information provided is not manipulated or incorrect. Define the term product. A product is anything, desired or not, that a person or organization receives in an exchange. The basic goal of purchasing decisions is to receive the tangible and intangible benefits associated with a product. Tangible aspects include packaging, style, color, size, and features. Intangible qualities include service, the retailer’s image, the manufacturer’s reputation, and the social status associated with a product. An organization’s product offering is the crucial element in any marketing mix. 1.1 Form a team of four or five members. Have the team determine what the tangible and intangible benefits are for a computer, a tube of toothpaste, a beauty salon, and a dentist. Tangible and intangible benefits of a computer: • Few Tangible Benefits: Instant messaging, information sharing, minimized usage of paper, entertainment, stores data • Few Intangible Benefits: Saves time, influences in making decisions, helps business enhance efficiency Questions 1. What type of consumer product is TerraCycle’s plant food: convenience, shopping, specialty, or unsought? Why? 2. Go to www.terracycle.net and look at the types of products the company sells. Describe their product mix. How wide is it? Which basic product lines Does it sell? How long are they? 3. Do you think that product line extension or product line contraction would make more sense for TerraCycle at this stage of the company’s growth? Why? 4. How well do TerraCycle’s bottles perform the four packaging functions discussed in this chapter? Compare TerraCycle’s products to Miracle-Gro’s (www.scotts.com). Do you think TerraCycle’s package design distinguishes their products well enough from those of the industry giant, or are they similar enough to cause customer confusion? 1.The products that are manufactured by the TerraCycle plant food manufactures for the customers can be categorized as the specialty product. Specialty products are commodities that are mostly bought by the customers from the shopping centers. Since the plant products manufactured by the Terra Cycle firm satisfy the desires and preferences of the customers, the products are usually intensively searched by the customers. The end products of the TerraCycle are bought in bulk by the customers since the products are unique and effectively suit the consumers. 2. TerraCycle has tried to make the packaging of its products unique to attract more customers; the package of the products resembles that of the Miracle-Gro organization. The similarity of the package of the end products of the two companies has made it difficult for the customers of the TerraCycle to identify the products. This has caused the company's sales to reduce since some customers confuse and purchase the products of the Miracle-Gro organization. Therefore, TerraCycle should consider changing the package of its products to ensure that the commodities are unique. This will ensure that the loyal customers of the TerraCycle Company purchase the correct products in the marketplaces. 3. TerraCycle manufactures various diverse products that are made readily available to the customers through distributing the products to the marketplaces. Since the company manufactures numerous products, it is better for the company to purchase all the related products together. This is very vital since it reduces the high charges that the company would incur if the manufactured products are manufactured and sold as a single unit. Purchasing the products that are associated as a single unit is cheaper compared to purchasing the product one after the other. Selling of the related products together reduces the money that would be incurred to the transport expenses, and the advertisement fee. The product mix of the TerraCycle is wide enough since it includes almost all the basic commodities. The key product line that TerraCycle concentrates in purchasing its products is the price of the commodities. The products that fall in the same price range are made to the customers in bulk. The price range is used since it is simpler to identify the products that are affordable and are preferred by the customers. 4.The product line concentration makes more sense for the Terracycle Company at the state at which the company is since it reduces the loss that the company might incur. The state of growth of the TerraCycle firm is undergoing a need to save more capital. This is to ensure that the company is capable of using the available cash in advertising its products to its customers. TerraCycle needs to attract more customers by purchasing more of its products. The more the TerraCycle makes profit the more the company will become more competitive in nature. The enormous profitable returns made by the company ensure that the firm develops. Discuss global issues in new-product development. A marketer with global vision seeks to develop products that can easily be adapted to suit local needs. The goal is not simply to develop a standard product that can be sold worldwide. Smart global marketers also look for good product ideas worldwide. 4.1 Visit www.pg.com and look at the brands it offers around the world. What conclusions can you draw about Procter & Gamble’s global new- product development strategy? 4.1. PG Company’s does not sell all its brands globally; depending on the local market needs It introduces new brands. For example, in IND country it sells 12 brands whereas in ASU country it sells 50 brands. Instead of launching all the products globally, PG is conducting market research and customer preferences study before commercializing the product in any country