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Fundamentals of Marketing

Chris Banman Fall 2010 471.21 Providence College. Fundamentals of Marketing. Chapter 10. Product Management & New Product Development. Product Life Cycles . 1. Market Introduction 2. Market Growth 3. Market Maturity 4. Sales Decline. Market Introduction. Sales low Cost High

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Fundamentals of Marketing

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  1. Chris Banman Fall 2010 471.21 Providence College Fundamentals of Marketing

  2. Chapter 10 Product Management &New Product Development

  3. Product Life Cycles • 1. Market Introduction • 2. Market Growth • 3. Market Maturity • 4. Sales Decline

  4. Market Introduction • Sales low • Cost High • Invest $ = future profits? • Bombardier, 1942 • Examples?

  5. Market Growth • Fast growth in sales • Competitors enter market • Some copy, some improve product • Consumer price sensitive increase • Bombardier listed in 1969 • Competitor analysis essential • Examples?

  6. Market Maturity • Sales level off • Competition stiff • Promotional cost increase + competitor price decrease= profit decrease • Differentiation (Ski-Doo - reverse gear) • High price sensitivity • Video game market

  7. Sales decline • New products replace old • Vigorous price competition • Strong brands may remain • Sony Walkman • Examples?

  8. Adoption Process • Innovators • Early Adopters • Early Majority • Late Majority • Laggards or nonadopters

  9. Fashion versus Fad Fashion Fad • Currently accepted or popular style • Short life cycles • in one season, out the next • Example – tie width • Idea that is fashionable only to certain groups • Short lived • Example - Christmas toys • Other examples?

  10. The Adoption Curve

  11. Innovators • 3-5% • 1st to adopt • Risktakers • Mobile • Research • Example – text messaging

  12. Early Adopters • 10-15% • Respected by peers • Often opinion leaders • Word-of-mouth promotion • Internet valuable tool • Examples?

  13. Early Majority • 34% • Avoid risk • Contact with mass media • Contact with salespeople • Examples?

  14. Late Majority • 34% • Cautious and “set in their ways” • Typically older • Rely on strong social pressure from own peer group • Little use of marketing sources

  15. Laggards or nonadopters • 5-16% • Prefer old ways • Very suspicious • Older, less educated • Status quo • Main source of information = other laggards

  16. Ethical Issues • New product delay • Planned Obsolescence • Inventory • Replacement parts • Minor variations

  17. New Product Development

  18. Key Terms • product life cycle • market introduction • market growth • market maturity • sales decline • fashion • fad • adoption curve • innovators • early adopters • early majority • laggards • nonadopters • new product • product liability • concept testing • test marketing • product managers • brand managers

  19. Case Discussion Paper Products Inc. • Topics • Key issues • Root causes • Alternatives • Recommendation • Implementation

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