Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND MANAGING THE PRODUCT

They thoroughly fIlled a sensory space in terms of texture, flavor,

and appearance with 25-20 products.

A questionraire was developed that required quantitat ive ratings

(such as 100% scale

of product attributes that were unique

to some products. There were questions abou t hardness, chewiness,

crispness, flavor intensity, degree of fruit flavor, sweetness, tartness,

color, and many more . Overall liking for each product was also

measured.

How well each product and brand performed-the overall liking

score for each product-was not an objective of the study. The point

was to discover the most generalized drivers of consumer acceptability

in the confectionary ca tegory. Products were ranked by their per form -

ance and key

properties. Close s t udy of the data revealed

that these consumers were: not the least bit influenced by brand .

Overal l taste was the dominant factor. Second , a new chocolate prod-

uct held the most promise . Of all flavors explored, chocolate capti-

vated consume rs most. In fact, the ideal product is chocolate-filled

chocolates

chocolate dipping sauce.

Sources: Jeff Braun , "Overcoming the Odd s. " Marketing News, March 29,

1999. pp . 15-16: David Fishben, "Sweet Success: Category Appraisal is

Proven Source of New Ideas," Marketing News . March 29, 1999, pp. 15-16;

"On Your Mark ," Entrepreneur, April 1999, pp. 161-162; Lau-

rie Freeman, "Brach's Fruit Snacks Shapes," Advertising Age. June 28 , 1999,

pp. 5-7.

There are two common techniques for screening new product ideas; both involve the

comparison of a potential product idea against

of acceptable new products. The fi rst

technique is a si.nple checklist. For example, new product ideas can be rated on a scale rang-

ing from very good

poor, in respect to

such as: value added, sales volume, patent

protection,

on present products, and so forth. Unfortunately, it is quite difficult for raters

to define what is fair or poor. Also, it does not address the issue of the time and e;;pense

associated with each idea, nor does it instruct with regard to the scores. A second technique

goes beyond the firs t: the criteria are assigned importance weights and then the products are

rated on a point scale measuring product compatibility. These scores are then multiplied by

their respective weights and added to yield a total score for the new product idea. Table 7.1

provides an example of both these techniques for screening new product ideas.

Step 3: Business Analysis

After the

product ideas survive their initial screen, very few viable proposals will

remain. Before the development of prototypes can be decided upon, however, a further eval-

uation will be conducted to gather additional information on these remaining ideas in order

to justify the

costs required. The focus of the business analysis is primarily on

profits, but other considerations such as social responsibilities may also be involved.

The first step in the business analysis is to examine the projected demand. This would

include two major

of revenue: the sales of the product and the sales or license of

the technology developed for or generated as a by-product of the

product.

PRODUCT PLANNING AND STRATEGY FORMULATION

177

TABLE 7. 1

Sc reening Product Ideas

Rating

Very Good

Fair

Poor

Unweighted

Weighted

Weight

(5 )

(4)

(3)

(2 )

(1)

Value

Value

Customer utilities

- amusement

.'1

X

5

.5

- comfort

.'1

X

3

.3

- convenience

:<

4

.8

- satisfaction

.3

X

4

1.2

- easy to use

.1

X

3

.3

Ability to create

effective sales

appeals

.3

X

4

1.2

Price

1

X

2

2

Product quality

.2

X

3

.6

Product profitability

.2

X

3

.6

Attractiveness of

product to customers

.1

4

.4

Ability to produce

in

large volumes

.3

X

5

1.5

Ability of new product

in helping sale of

other products

.1

X

.1

Requires low

capital investment

.3

:.(

4

1.2

Product can be

promoted

existing advertising

.2

X

3

.6

Product can be

produced in

existing facilities

.3

X

4

1.2

Product can be

distributed through

existing channels

.3

X

3

.9

Strength of

.2

X

3

.6

Patent situation

.1

X

Total Score

60

12.4

A complete cost

is also necessary as part of the business analysis.

is

ficult to anticipate all the costs that will be involved in product development, but the fo l-

lowing cost items are typical:

• Expected

including both technical and marketing

• Expected set-up costs (production, equipment, dislribution)

• Operating costs that account for possible economies of scale and learning curves

• Marketing costs,

and

• Management

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