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(CHAPTER-1)

PRINCIPALE OF MARKETING

MARKETING: It is the delivery of customer satisfaction at a profit.

Or
It is a process of getting the right products to the right people at the right price and at
the right place and time with the right promotion.

SIMPLE MARKETING SYSTEM

COMMUNIKCATION

Product/service
PRODUCER / SELLER CONSUMER
Money

FEEDBACK

SOME BASICS OF MARKETING: consist of 7 PS:

(i) PRODUCT: What are you selling (it might be product or services)

(ii) PRICE: What is your pricing strategy.

(iii) PLACE: How are you distributing your product to get it into the market
place?

(iv) PROMOTION: How are you telling consumers about your product?

(v) POSITIONING: What place do you want your product to hold in the
consumers mind:

(vi) PERSONAL RELATIONSHIPS: How are you building relationships with

your target consumers?

(vii) PEOPLES & PROFITS: Public who can be affected by organization and
to have something values in return of product or service.

REASONS FOR STUDYING MARKETING

(i) It plays an important role in society.

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(ii) It is vital to business.
(iii) It offers outstanding career opportunities.
(iv) It affects your life every day.

(CHAPTER-2)
MARKETING PROCESS
CORE MARKETING CONCEPTS

MARKETING PROCESS:

There are certain factors that can influence the marketing process termed as, actors
and forces in marketing system. They are:

(i) SUPPLIERS: are the firms and persons that provide the resources to
produce goods and services.

(ii) MARKETING INTERMEDIARIES: include various middlemen and

distribution firms as well as marketing services agencies.

(iii) CUSTOMERS: Usually consist of consumer, industrial reseller,

government and international market.

(iv) COMPETITORS: are usually considered those companies also serving a

target market with similar products and services.

CORE MARKETING CONCEPTS:

NEEDS/WANTS/DEMANDS:

PPRODUCTS AND SERVICES: It is anything that can be offered to a market to

satisfy a need or want

VALUE/SATISFACTION AND QUALITY:

Customer valve is the difference between the

values that the customer gains from using a
product and the costs of obtaining the product.

TQM: (total quality management) is an

approach in which all the companys people
are involved in constantly improving the quality
of products, services and marketing process.

EXCHANGE/TRANSACTIONS AND RELATIONSHIPS:

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Exchange: is act of obtaining a desired object from someone by offering

something in return.
Transaction: It is a trade values between two parties.

(CHAPTER-3)
MARKETING FUNCTIONS
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

MARKETS:

A market is the set of actual and potential buyers of a product.

MARKETING FUNCTIONS: There are 8 marketing functions that are performed

in marketing these are:

i. Buying: (raw material for products or final goods for further reselling)
ii. Selling: (products to satisfy customers needs and wants)
iii. Transporting: (moving products from production point to selling point)
iv. Storing: (warehouses) for further distribution of products
v. standardizing and grading (to provide more quality and services for charm)
vi. financing: (provide credit facility for channel members i.e.
wholesalers/retailer
vii. risk taking: for new products
viii. securing marketing information: about consumers, competitors, channel
member for making marketing decision.

MARKETING MANAGEMENT:
It is the art and science of choosing target markets and building profitable
relationships with them.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

It is the process to build and maintain profitable customer relationships by

delivering superior customer satisfaction.

(Winning a new customer is usually 5-10 times more costly than retaining an
existing one which is more profitable the longer you keep them.)

BASIC GOALS OF CRM

i. Provide better customer service

ii. Make call centers more efficient
iii. Help sales staff close deals faster
iv. Simplify marketing and sales process
v. Discover new customers

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vi. Reduces the rate of customer defection

(CHAPTER-4)
EVOLUTION OF MARKETING

MARKETING PHILOSOPHIES:
There are several alternative philosophies that can guide organizations in their
efforts to carry out their marketing goals. Which are?

i. The production concept: Consumer favor products that are available

and highly affordable

ii. The product concept: Consumer favor quality products that are
reasonably priced and therefore little promotional effort is required.

iii. The selling concept: Consumer will not buy product unless
organization makes extra ordinary promotional efforts such as to sell
insurance policies.

iv. The marketing concept: It holds that achieving organizational goals

depends on determining the needs and wants of target markets.

v. The social marketing concept: It holds that the organization should

determine the needs, wants and interests of target market.

(CHAPTER-5)

MARKETING CHALLENGES IN THE 21ST CENTURY.

a. Porters 5 forces model of competition:

(i) Threat of new entrants.

(ii) Bargaining power of buyers
(iii) Threat of substitute
(iv) Bargaining power of suppliers.
(v) Rivalry among competing firm in industry

A. THE IT REVOLUTION:

(i) Technologies for connecting.

Internet connecting with customers.
Internet connecting with others in the company.
Extranets connecting with strategic partners / suppler.

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(ii) Connections with customers.

Through telephone, mail-order, kiosk set.
Internet
Direct channels (Amazon.Com)

(iii) Connections with marketings partners.

Marketing no longer has sole ownership of customer interaction.
Supply chain management.
Strategic partners.

(iv) Connections with the world around us.

Firms are challenged by international competitors in their once safe
domestic market.
Companies are not only exporting but buying more components from
aboard.
Domestically purchased goods and services are hybrids (with components
coming from wanly international sources)

B. RAPID GLOBALISATION:

Faster communication and transportation

Foreign competitors.
Delay taking steps toward internationalizing (Risk)

C. THE CHANGING WORLD ECONOMY:

D. THE CALL FOR MORE ETHICS AND SOCIAL RESPONSIBILITIES:

(i) High prices

(ii) High costs of distribution
(iii) High advertising and promotion coast.
(iv) Excessive middle man gross profit margin
(v) Deceptive practices (factory, whole sale)
(vi) High pressure selling people.
(vii) Unsafe products.

E. THE NEW MARKETING LAND SCOPS. The new marketing landscape is a

dynamic, fast-paced and evolving function of all these changes and opportunities.

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(CHAPTER-6)

STRATEGIC PLANING AND MAKETING PROCESS

1. STRATEGIC PLANNING: The process of developing and maintaining a strategic

fit by the organizations goals and capabilities and its changing marketing opportunities
is called strategic planning.

2. TACTICAL PLANNING: It is concerned with translate the general goals and

plans developed by strategic managers in to objective that are more specific activates.

3. OPERATIONAL PLANNING: It is used to supervise the operations of the

organization.

CHARACTERISTICS OF A STRATEGIC PLAN:

a. It encourages management to think ahead systematically.

b. It forces managers to clarify objectives and policies.
c. It leads to better coordination of company efforts.
d. It provides clearer performance standards for control.

STRATEFGIC PLANING PROCESS:

a. Stating a clear company mission.

b. Setting supporting company objective.
c. Designing a sound business portfolio.
d. Planning and coordinating marketing and other functional strategies.

COMPANYS MISSION:
(1) A MISSION STATEMET:

a. Be realistic
b. Be specific
c. Fit the market environment
d. indicate distinctive competence
e. Be motivating

(2) SETTING COMPANY OBJECTIVES AND GOALS:

This second step in the strategic planning process requires the manager to set
company goals and objectives.

(3). DESIGNING THE BUSINESS PORTFOLIO:

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It is the collection of business and products and make up the company.

(CHAPTER-7)

MARKETING PROCESS

SBUs The strategic business unit is a unit of the company that has a separate
mission and objectives.

DEVELOPING GROWTH STARATEGIES:

(i) Market penetration: Making more sales to present customers without

changing in any way.

(ii) MARKET DEVELOPMENT: A strategy for company growth by identifying and

developing new markets for current company products

(iii) PRODUCT DEVELOPMENT: A strategy for company growth by offering

modified or new products to current markets.

(iv) DIVERSIFICATION: A strategy for company growth by starting up or acquiring

businesses outside the companys current products and markets.

(CHAPTER-8)

MARKETING PROCESS

MARKETING PRoCESS: It is the process of analyzing market opportunities, selecting

target markets, developing the marketing mix, and managing the marketing effort

Q. What are the steps in marketing?

A. (1). ANALYZING MARKETING OPPORTUNITIES: Marketing manager unit

analyses the long-run opportunities in the market to improve the business units
performance.

(2) SELECTING THE TARGET MARKET:

(i) Market segmentation: It is the process of dividing market into distinct

groups of buyers with different needs characteristic or behavior.

(ii) Market targeting: It is the process of evaluating each mark segments

attractiveness and selecting one or more segments to eater.

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(iii) Market positioning: It is arranging for a distinctive and desirable place

relative to competing products in the minds of target consumers.

(3) DEVELPING THE MARKETING MIX:

(i) Marketing Mix: It is the set of controllable marketing

variables that the firm blends to produce the response it wants in
the target market.

(4) MANAGING THE MARKETING EFFORT

a. marketing analysis
b. marketing planning
c. marketing implementation
d. marketing control

i. set specific goals (why do we want to achieve)

ii. measure performance (what is happening)
iii. evaluate performance (why is it happening)
iv. take corrective action (what should we do about it)

OPERATING CONTROL:
It involves checking ongoing performance against the annual plan and take
corrective action when necessary

STRATEGIC CONTROL:
It involves looking at whether the companys basic strategics are well matched to
its opportunities

MARKETING DEPARTMENT ORGANIZATION

i. Functional organization:
Where different marketing active ities are headed by a functional specialist

ii. Geographic organization:

Where sales and marketing people are assigned to specific, countires,
regious or districts

iii. Product Management organization:

Where a product manager develops a complete strategy for a product or
brand.

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iv. MARKET CUSTOMER MANAGEMENT ORGANIZATION:

Where a specific market plan is developed for each specific market /
customer.

v. COMINATION PLANE:
Where large companies many times combine elements of any of the
above.

(CHAPTER-9)

MARKETING ENVIRONMENT

A companys marketing environment consists of the actors and forces outside

marketing the affect marketing managements ability to develop and maintain
successful relation ship with its target customers

MICRO ENVIRONMENT
MACRO ENVIRONMENT

1. MICRO ENVIRONMENT:
i. the company itself (including departments)
ii. suppliers
ii. marketing channel firms
iii. customer markets
iv. competitors
v. publics

THE COMPANYS MICROENVIRONEMNT:

I. The company
II. Suppliers
III. Market intermediaries (resellers)

Physical distribution firms:

It helps the company to stock and move goods from their points of origin
to their destinations

Marketing Service Agencies:

It help the company target and promote its products.

FINANCIAL INTERMEDIARIES:

It help finance transaction and ensure against risks

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2. MACRO ENVIRONMENT

THE COMPANYS MACRO ENVIRONMENT:

a. Demographic environment: is the study of human populations in

terms of size, density, location, age, sex, race, occupation and other statistics

b. Economic Environment: It includes those factors that affect consumer

purchasing power and spending patterns.

c. Natural environments: It involves natural resources that are needed

as inputs by marketers or that are affected by marketing activities

d. Technological environment: It includes forces that create new

technologies creating new product and market opportunities.

e. Political Environment: It includes laws, government agencies, and

pressure groups that influence and limit various organizations and individuals in a
given society.

f. Cultural Environment: It is made up of institutions and other forces

that affect societys basic values, perceptions, preferences and behaviors.

( C H A P T E R - 11 )

Marketing Information System:

Marketing information is a critical element in effective marketing as a
result of the trend
toward global marketing, the transition from buyer needs to buyer
wants, and the transition
from price to non-price competition. All firms operate some form of
marketing information
system.
MIS works in the following way:
A well-designed marketing information system (MIS) begins
and ends with the user.
The MIS next develops information and helps managers to use
it more effectively.
Marketing intelligence supplies marketing executives with
everyday information
about developments in the external marketing environment.

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Finally, the marketing information system distributes
information gathered from internal sources, marketing
intelligence, and marketing research to the right managers at
the right times.
Marketing Intelligence:
Provides the everyday information about environmental variables that
managers need as the
implement and adjust marketing plans.

Marketing Research:
Marketing research links the consumer, customer, and public to the
marketer through an
exchange of information.
f. Why to Conduct Business Research?
Marketing Research is a Systematic & objective process of designing,
gathering, analyzing &
reporting information that is used to solve a specific problem. It Provides
information for
aid in making business related decisions, to Identify opportunities and
generate & refine
actions. It is important for the mangers for many decisions like:
Helps reduce risk inherent in decision-making
Provides an important link to customers
Allows implementation of the business concept
Enables managers to identify & understand stakeholders wants & needs
and to
develop appropriate strategies to meet these needs
Chapter -13

Uses of Marketing research:-

1. Measurement of market potential.

2. Analysis of market share.
3. Determination of market characteristics.
4. Sales analysis.
5. product testing
6. forecasting
7. studies of business trends
8. Studies od competitors products.

Marketing research process:-

1. Problem definition and the research objectives

2. Developing the research plan
3. Implementation
4. Interpretation and reporting of findings

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Objectives of research:-

1. Exploratory research:-
Where the objective is to gather preliminary information that will help to better
define problems and suggest hypotheses for their solution.
2. Descriptive research:-
Where the intent is to describe things such as the market potential for a product or
the demographics and attitudes of customers who buy the product.
3. Casual research:-
is research to test hypotheses about cause-and-effect relationships.

Developing the research plan:-

1. Determining specific information needs
2. Gathering secondary information
3. Planning primary Data collection

Research Approches:-
1. Observational research:-
Where information is gained by observing relevant people, actions, and
situations.
2. Survey research:-
Is the gathering of primary data by asking people questions about their
knowledge, attitudes, preferences, and buying behavior.

3. Experimental research:-
Involves the gathering of primary data by selecting matched groups of
subjects, giving then different treatments, controlling related factors, and
checking for difference in-group responses.

Contact Methods:-
1. Mail questionnaires
2. Telephone interviewing
3. Personal interviewing
4. Online (internet)
5. Computer interviewing

Three decisions of designing a sample:-

a. Who is to be surveyed (what is sampling unit)?
b. How many people should be surveyed(what sample size)?
c. How should the sample be chosen(what sampling procedure)?

Kinds of samples:-
a. Probability samplers sampling error can be measured

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b. Nonprobability samples sampling error cannot be measured.

Consumers:-
All individual and households who buy or acquire goods and services for personal
consumption are termed as consumer behavior

Why to study consumers behavior.:-

Basic objective of studying consumer behavior is that the firm needs to know who buys
their product? How they buy? when and where they buy? Why they buy?

Consumer behavior:-
Its is the process through which the ultimate buyer makes purchase decisions.

Positioning:-
Arranging for a product to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.

Segmentation:-
Dividing a market into distinct groups of buyers on the basis of needs, characteristics, or
behavior whi might require seprate products or marketing mixes.

Product development:-
A strategy for company growth by offering modified or new products to current markets
segments.

Market development:-
A strategy for company growth by identifying and developing new markets segments for
current company products.

Model of consumer behavior:-

1. Marketing and other stimuli

Marketing
Product
Price
Place
Promotion
Other
Economic
Technology
Political
Cultural

2. Buyers Black box

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Buyer characteristics
Buyer decision process

3. Buyer response

product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount

Factors influencing consumer behavior:-

1. Cultural

Culture
Subculture (nationalities, religions, geographic regions)
Social class
2. Social

Reference groups
Family

3. Personal

Age and life-cycle stage

Occupation
Economic situation
Lifestyle
Personality
Self-concept
4. psychological

Motivation
Perception
Learning
Beliefs
Attitudes
5. Buyer

Types of buying behavior:-

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1. Complex buying behavior:-
Consumers undertake complex buying behavior
when they are highly involved in a purchase and
perceive significant differences among brands.
2. Dissonance-Reducing buying behavior:-
It occurs when consumers are highly involved with
an expensive, infrequent or risky purchase, but see
little difference among brands.
3. Habitual buying behavior:-
It occurs under conditions of low consumer
involvement and little significant brand difference.
a. Variety-seeking buying behavior:-
Consumers undertake Variety-seeking buying
behavior in situations characterized by low
consumer involvement but significant perceived
brand differences.

Buyer decision process:-

Need Recognition
Information search
Evaluation of Alternatives
Purchase decision
Post purchase behavior

Stages in the Adoption Process:-

Awareness:- The consumer becomes aware of the new product,

but lacks information about it.
Interest:- The consumer seeks information about the new
product.
Evaluation:- The consumer considers whether trying the new
product makes sense
Trial:- The consumer tries the new product on a small scale
to improve his or her estimate of its value
Adoption:- The consumer decides to make full and regular use
of the new product.

Business market:-
It comprises all the organizations that buy goods ad services for
use in the production of other products and services that are sold,
rented, or supplied to other.

Characteristics of business markets:-

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1. Market structure and demand
2. Nature of the buying unit
3. Types of decisions and the decision process

Business buyer behavior:-

a. Major types of buying situations

Straight rebuyThe buyer recorders something
without any modifications
Modified rebuy--- The buyer wants to modify
product specifications, prices, terms, or suppliers.

b. Participants in the business buying process

Users
Influencers
Buyers
Deciders
Gatekeepers
c. Major influences on business buyers
Business buyers are subject to many
influences when they make their buying
decisions.
Environmental Factors
Organizational Factors

Interpersonal Factors:-
The buying center usually includes many participants who
influence each other.
Individual Factores:-
Each participant in the business buying decision process
brings in personal motives, perceptions, and preferences.

The business buying process:-

a. Problem Recognition
b. General Need Description
c. Product specification
d. Supplier search
e. Proposal solicitation
f. Supplier selection
g. Order-Routine Specification
h. Performance Review

Institutional Markets:-

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The Institutional Markets consists of schools, hospitals, nursing,
homers, prisons, and other institutionsthat provides goods and
services to people in.

Government Markets:-
The Government Markets offers large opportunities for many
companies, both big and small.

New task buying:-

A company buying a product or service.
Influencers:-
Often help define specifications and also provide information for
evaluating alternatives.
Gatekeepers:-
Control the flow of information to others.
Market segmentation:-
Dividing a market into smaller groups.
Market Targeting:-
Evaluating each market segments attractiveness and selecting one
or more of the market segments to enter.

Levels of Market segmentation:-

1. Market segmentation
Identify bases for segmenting the market
Develop segment profiles
2. Market Targeting
Develop measure of segment attractiveness
Select target segments
3. Market Positioning
Develop positioning for target segments
Develop a marketing mix for each segment

a. Mass Marketing:-
The traditional argument for mass marketing is that it
creates the largest potential market, which leads to the
lowest costs, which in turn can translate into either lower
prices or higher margins.
b. Segment Marketing:-
It offers several benefits over mass marketing.
c. Niche Marketing:-
It is a more narrowly defined group, usually identified by
dividing a segment into sub segments.
d. Micro Marketing:-

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It includes all local marketing. It is the practice of tailoring
products and marketing programs to suit the tastes of
specific individual and locations.

Segmenting consumer Markets:-

1. Geographic segmentation
2. Demographic segmentation
Age and Life-cycle stage
Gender segmentation
Income segmentation
3. Psychographics segmentation (Dividing a market into
diferent groups based on social class, lifestyle )
4. Behavioral segmentation (dividing a market into groups
based on consumer knowledge, attitudes etc)

Requirements for Effective Segmentation:-

1. Measurability:-
Is the degree to which the size, purchasing power,
and profiles of a market segment can be measured.
2. Substantiality:-
It refers to the degree to which a market segment is
sufficiently large or profitable.
3. Accessibility:-
It refers to the degree to which a market segment
can be reached and served.
4. Differentiation:-
It refers to the degree to which a market segment
can conceptually be distinguished and has the
ability to respond differently to different marketing
mix elements and programs.
5. Action Ability:-
Its is the degree to which effective programs can be
designed for attracting and serving a given market
segment.

Market Targeting
1. Evaluating Market Segments:-
In this a firm must look at three factors: Segment
size and growth, segment structural attractiveness,
and company objectives and resources.
a. Undifferentiated marketing:-

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Using this strategy, a firm might decide to ignore
market segment differenced and go to the whole
market with one offer.
b. Differentiated Marketing:-
Using this strategy, a firm decides to target several
market segments or niches and designs separate
offers for each.
c. Concentrated Marketing:-
Using this strategy , concentrated marketing, is
especially appealing when company resources are
limited.

d. Choosing a Market-Coverage strategy:-

This strategy is best depend in company resources.
The best strategy also depends on the degree of
product variability.
e. Socially Responsible Target Marketing:-
Smart targeting helps companies to be more
efficient and effective by focusing on the segments
that they can satisfy best and most profitably.
f. Positioning for competitive Advantage:-
Positioning involves implanting the brands unique
benefits and differentiation in customers mind.

2. Choosing a positioning Strategy:-

Some firms find it easy to choose their positioning strategy.

3. Identifying possible competitive Advantages.

4. Choosing the right competitive Advantages.
a. How Many differences to promote?
b. Which differences to promote?

5. Selecting an overall positioning Strategy:-

Customers typically choose products and services that give
them the greatest value. Thus, marketers want to position
their brands on the key benefits that they offer relative to
competing brands.
6. Communicating and delivering the chosen position.
The company must take strong steps to deliver and
communicate the desired position to target consumers.

PRODUCT:-

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A product is anything that can be offered to a market for attention,
acquisition, use, or
consumption and that might satisfy a want or need.
a) Levels of Product and Services

1). The core product is the core, problem solving benefits that
consumers are really
buying when they obtain a product or service
2). The actual product may have as many as five characteristics that
combine to
deliver core product benefits.
They are:
a). Quality level.
b). Features.
c). Design.
d). Brand name.
e). Packaging.

3). The augmented product includes any additional consumer services

and benefits
built around the core and actual products.
Product Classification

I. Consumer Products
Consumer products are those bought by final consumers for personal
consumption.
Marketers usually classify these goods further based on how
consumers go about buying
them. Consumer products include convenience products, shopping
products, specialty products, and
unsought products.

Convenience products are consumer products and services that

the
customer usually buys frequently, immediately, and with a
minimum of
comparison and buying effort. Examples include soap, candy,
newspapers,
and fast food.
Shopping products are less frequently purchased consumer
products and
services that customers compare carefully on suitability, quality,
price, and
style.

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Specialty products are consumer products and services with
unique
characteristics or brand identification for which a significant
group of buyers
is willing to make a special purchase effort. Examples include
specific brands
and types of cars
Unsought products are consumer products that the consumer
either does
not know about or knows about but does not normally think of
buying.

II. Industrial Products

Industrial products are those purchased for further processing or for
use in conducting a
business.
Capital items are industrial products that aid in the buyer's
production or operations,
including installations and accessory equipment. Installations consist
of major purchases
such as buildings (factories, offices) and fixed equipment (generators,
drill presses, large
computer systems, elevators).

Individual product decisions

a) Product Attributes
Developing a product or service involves defining the benefits
that it will offer. These benefits are communicated to and
delivered by product attributes such as quality, features, style
and design.
i. Product Quality
Quality is one of the marketer's major positioning tools.
ii. Product Features
A product can be offered with varying features.
iii. Product Style and Design
Another way to add customer value is through distinctive product
style and design.
b) Branding
Perhaps the most distinctive skill of professional marketers is their ability to
create, maintain,
protect, and enhance brands of their products
and services.

i. Brand:
A brand is a name, sign, symbol, or design, or a combination of
these that identifies the maker or seller of a product or service.

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ii. Brand equity
is the value of a brand, based on the extent to which it has high
brand loyalty, name
awareness, perceived quality, strong brand associations, and
other assets such as patents, trademarks, and channel
relationships.
iii. Selecting The Brands Name:
Selecting a brand name is an important step. The brand name should be
carefully chosen
since a good name can add greatly to a products success. Desirable
qualities of a good
brand name include:
1). It should suggest something about the products benefits and
qualities.
2). It should be easy to pronounce, recognize, and remember.
3). It should be distinctive.
4). It should translate easily into foreign languages.
5). It should be capable of registration and legal protection. Once
chosen, the brand
name must be protected.
iv. Sponsorship options for Branding:
A manufacturer has four sponsorship options:
1). A manufacturers brand (or national brand) is a brand created
and owned by
the producer of a product or service (Examples include IBM and
Kellogg).
2). A private brand (or middleman, distributor, or store brand)
is a brand created
and owned by a reseller of a product or service.
3). A licensed brand (a company sells its output under another
brand name).
4). Co-branding occurs when two companies go together and
manufacture one
product.
Packaging
Packaging involves designing and producing the container or wrapper
for a product.
Labeling
Labels may range from simple tags attached to products to complex
graphics that are part of
the package.
Product Support Services
Customer service is another element of product strategy. A company's
offer to the
marketplace usually includes some services, which can be a minor or
a major part of the total

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offer.
New-product development:
The development of original products, product improvements, product
modifications, and new brands through the firm's own R&D efforts.
Idea generation: The systematic search for new-product ideas.
Idea screening: screening new-product ideas in order to spot good
ideas and drop poor
ones as soon as possible.
Product concept: A detailed version of the new-product idea stated
in meaningful
consumer terms.
Concept testing: Testing new-product concepts with a group of
target consumers to find
out if the concepts have strong consumer appeal.
Business analysis: A review of the sales, costs, and profit projections
for a new product to
find out whether these factors satisfy the company's objectives.

Consumer Adoption Process

a) Stages in the Adoption Process
1. Awareness. In this stage the consumer is aware of the new product
but lacks
further information about it.
2. Interest. The consumer is motivated to seek information about the
new product.
3. Evaluation. The consumer determines whether or not to try the
new product.
4. Trial. The consumer tries the new product on a small scale to test
its efficacy in
meeting his or her needs. Trial can be imagined use of the product in
some cases.
5. Adoption. The consumer decides to make use of the product on a
regular basis.
b) Individual differences in the adoption of innovations
1. Innovators. Innovators help get the product exposure but are not
often perceived
by the majority of potential buyers as typical consumers.
2. Early Adopters. This group serves as opinion leaders to the rest of
the market.
3. Early Majority. Some 34% of the market that is the "typical
consumer" but likely
to adopt innovations a little sooner.
4. Late Majority. This group is skeptical and adopts innovations only
after most of
the market has accepted the product.

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5. Laggards. This group is suspicious of change and adopts only after
the product is
no longer considered an innovation.
C. Product Life-Cycle Strategies
After launching the new product, management wants the product to enjoy a
long and happy
life. Although it does not expect the product to sell forever, the company
wants to earn a
decent profit to cover all the effort
a) Product development begins when the company finds and
develops a new-product
idea.
b) Introduction is a period of slow sales growth as the product is
introduced in the
market.
c) Growth is a period of rapid market acceptance and increasing
profits.
d) Maturity is a period of slowdown in sales growth because the
product has achieved
acceptance by most potential buyers.
e) Decline is the period when sales fall off and profits drop.

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