Marketing Fundamentals Business & Marketing Coursework

Marketing Fundamentals
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Marketing Fundamentals
Question 1: Discuss the new product development (NPD) process, and identify the two main pricing strategies that can be applied to new products
New Product Development (NPD) process
The changing marketplace requires organizations to innovate and provide new products for their clients to maintain a competitive edge. Consequently, organizations must regularly create products that continually meet clients' demands and needs to ensure that they maintain loyalty. However, making a product that resonates with clients requires gruesome research and development to ensure that it can eventually sell and capture a significant portion of the market. Thus, new products must be profitable for the company, in the long run, to be deemed successful.
Firstly, the NPD process requires the generation of new ideas and concepts about a probable product. This involves a systematic approach that enables the organizations to generate several designs, both internally and externally, through intensive research of the market and the industry (Luchs, Swan, & Griffin, 2015). Therefore, these contributions can emanate from employees or other stakeholders in the organization or market research regarding competitors and customers. Once the ideas are in place, the screening can begin to determine the best and viable choices that the organization can go ahead with to the next step. Products with the highest probability of being profitable are analyzed and shortlisted while others are dropped to ensure that only the best prevail.
After that, the product's conceptualization begins where a detailed version of the product is created with the consumer in mind. The concept creates a stable version of the product that can be further analyzed and refined to form the final product (Luchs, Swan, & Griffin, 2015). At this stage, the concept is also tested rigorously to analyze how clients may react to it. This involves consumer testing to check its appeal and values to the clients. The knowledge from this testing enables further refinement of the product.
Once conceptualization is finalized, the next step involves the creation of a marketing strategy for the product. The marketing strategy includes elements critical for the introduction of the product to the market. These elements include the target market description, market share, and product profit goals over the initial years (Luchs, Swan, & Griffin, 2015). Additionally, it also includes the budgets for marketing in addition to the projected sales and profits of the product.
The business analysis follows to determine the attractiveness of the product and its value to the business in the long run. A product aligned to the organization’s objectives can thus get the go-ahead to move to product development. At this development stage, prototypes are developed to provide a physical version of the product concept. A completed prototype can then undergo testing to ensure its functionality and safety before introduction to clients. Test marketing can then be undertaken to real market settings whereby views and opinions can be collected to further integrate into the final product (Luchs, Swan, & Griffin, 2015). The company also gets a glimpse into the viability of the marketing strategy, including aspects such as packaging, advertisements, and distribution.
Finally, once the product passes the testing phase, the organization can commence full commercialization of the product into the market. At this point, the organization invests heavily in mass-producing the product while factoring in the marketing strategy to maximize visibility (Luchs, Swan, & Griffin, 2015). The first years play an essential role in the product perception to customers hence, effort must be put on an effective marketing strategy at the commercialization stage. Therefore, successful products offer higher customer value, thus prompting an increase in sales and revenue for the organization.
Pricing strategy for new products
Price skimming can be used for new products released into the market whereby the initial price is set to be high, after which it is reduced over time (Faith & Agwu, 2018). This strategy enables the company to reap the highest revenues from each market segment, where clients are willing to purchase the product. Ultimately, an organization that uses this type of pricing strategy may make fewer sales but earns a more substantial revenue in the long run. On the other hand, another pricing strategy for new products is the market penetration pricing, whereby the initial price for products is low to penetrate a broader market base (Faith & Agwu, 2018). In this case, the organization sacrifices profits for market share hence increases the number of clients willing to purchase the products. Furthermore, increased sales enable the company to increase production at a lower cost, hence further reducing the product's overall price in the long run.
Question 2: Using the model of the consumer decision-making process, discuss the differences in the process for buying a routine problem-solving product vs. buying an extended problem-solving product
Consumer decision-making process
The consumer decision process involves several factors in which consumers evaluate a product before deciding whether to purchase it. Firstly, a consumer must first identify a problem or a need, after which he/she tries to find a solution that can satisfy that particular need. Requirements may be triggered internally in the body, including stimuli such as hunger or thirst, while externally, advertisements of products may trigger the needs. After that, a consumer searches for the products available in the market to satisfy his/her needs, where options are identified. Once the available options have been identified, the consumer thus moves to evaluate the options using a set criterion based on factors such as price, reviews, and ratings from which a determination can be...