Month: August 2020

The product life cycle is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.

In today’s competitive market, it’s like a war to make good space on the retailer’s shelf. All this indicates that product visibility should be improved; its look should be innovative, premium and eye-catching. So the consumer attracts towards it and raises his hand to pick it up.

By keeping in mind that the brand value correlates with the consumer perception of that particular brand. As Tom Peter said “Perception is reality”.

Brand can be successfully revamped by adapting current styles, while celebrating its history. Correct positioning and appropriate application of marketing mix will enhance the brand value.

Investing capital, time and human resource on relaunching and rebranding exercise, if done thoroughly, is never fruitless; actually it’s a big bang for your marketing strategy and for the business.

7 Advantages of Product relaunch & rebranding

1) Consumer Awareness: By relaunching a product in the market, consumer will be curious and excited to know that what is NEW. It will create awareness and consumer will be informed about the characteristics of the products and the marketing campaign through different mode of channels will be a reason to highlight it.

2) 2nd chance to make a good impression: After completing the product life cycle or a 1st product launch failed, the consumer Product Company is more focused to improve the product quality, design and formulation to compete in the market and to create good brand image and give an impression of a premium product.

3) Acquire more market share: Product is coming with new features and relaunch campaign will give awareness to the consumer. All this effort will help to acquire more market share with the improved product, and will be a boost for revenue generation.

4) Clear the confusion of brand image: A clear product positioning can solve the problem of brand image. Brand identity is very important factor to be unique in the market and to target the audience. Brand image can be develop through specific and targeted marketing campaign by holding an authentic product theme.

5) Mid to Premium Market: One of the interesting stages is transition from one market to another market segment, already having a certain middle level customer, plus now with the premium look and improved formulation, product is shifting to premium market to gain more revenue.

6) Brand Extension: Products relaunch and rebranding usually extend the life cycle of the brand itself. It’s an old brand name with new features, it helps to improve the brand image and consumer acceptance, and extend the brand life.

7) Consumer benefit: To compete in to the market, the companies improve their products by visibility and by characteristics. So ultimately consumer will get the premium product. As consumer not only pays for the product, they value the overall experience of the product.

Brand development is maintaining the consistency in terms of quality, value and trust that consumer finds in the company. Brand is a perception on consumers’ mind. Today market is flooded with competition and none of them is lagging behind in delivering the promises that they make to their respective consumers.

Importance of Brand Development

Brand development is a continuous process which helps a brand grow in the market. There has be a constant plan to develop a brand further, be contemporary and yet be useful to a customer. Brand development has following 4 phases:

1. Brand strategy

How to take your brand into the market? Making brand communications more effective. Brand development can undertaken by enhancing communication strategies for a brand.

2. Brand Identity

Brand identity communicates the company’s vision and mission via Brand. From beginning to end, making brand more memorable.

3. Graphic design

Graphical designs, color schemes, logos etc. differentiates a brand from the competitor and shape consumers’ perception positively, and helps in brand development.

4. Brand management

Just like a stock portfolio, managing the investment done by the company in the brand. Hence, brand management is an effective way of managing the entire life of a brand.

Effectiveness of brand development is also measured by a tool which is known as brand development index (BDI).

Brand Development Model

A Brand Development Model is a diagnostic tool that integrates many proven metrics into a framework that guides strategy. Marketers need to consider six stages of development for a brand, each equating to a different marketing priority, starting with creating basic awareness and concluding with building customer loyalty. The following identifies these stages, recommended metrics, and strategy implications for brand management.

Stage 1: A Brand should be Recognizable

Half the battle in building trust is for buyers to recognize the brand, or say “Yah, I’ve heard of them”. The standard measure for this stage is aided awareness. A weakness in this stage implies a need to get the name out, and can be addressed through advertising and publicity to boost name recognition. It may be hard to imagine a large company like a Fortune 500 with such an issue, but some of Rockbridge’s clients operate in niche markets that are defined by lifecycle, such as higher education services or mortgages, and have low name recognition among first time buyers.

Stage 2: A Brand should be Memorable

Once a brand has recognition, the next logical step is to become salient or “top of mind”, so that buyers may consider it as part of their evoked set of purchase options. The best measures for this stage include unaided awareness and top-of-mind awareness (mentioned first) within a product or service category, and perceived level of familiarity. The implication for brands with weakness in this stage is to educate the market about the brand, such as the type of products or services the brand offers.

Stage 3: A Brand should be viewed with Favor

In addition to awareness, a brand should be viewed as meeting the needs of potential buyers and be respected by influencers. This includes a basic trust of the brand as well as belief in its value proposition. A classic measure for gauging this stage of development is an excellence rating (e.g., a scale ranging from poor to outstanding), but the inclusion of “best in class” status and brand momentum metrics provides additional context and variation for tracking. Brands lacking in this area are advised to build trust and respect in messaging. The message may be tangentially related to the value proposition, emphasizing features such as community involvement or concern for the environment, or it may directly establish credibility for the brand in its ability to meet needs, such as stressing its track record or reliability.

Stage 4: A Brand should be Distinctive

When prospective buyers are ready to act, they will choose a brand that fulfills a promise they desire, but this credibility is not sufficient alone to drive choice. The brand promise must be distinctive and unique, or the brand identity will be vague and the brand will become commoditized. Consumers perceive brands at a functional and emotional level. The functional has to do with various promises, such as offering value, having high quality, or being relevant to like minded customers. The emotional delves into aspects of brand personality, such as being edgy, playful, masculine or serious, attributes that can be developed from projective qualitative techniques (e.g., if this brand were a person, what kind of car would they drive?). A solid and tested approach to measurement in these areas is to quantify image by rating the brand and its competitors on a series of carefully selected image attributes. A chief goal for marketers is to position their brand through communications that stresses attributes that drive purchase intent and are unique to the brand. Working with perceptual maps that provide a visual “war map” and with quadrant maps that reveal strengths and weaknesses, marketers can craft and test a message strategy. Over time, the progress in execution of the strategy can be assessed by tracking changes in the image dimensions that are core to strategy.

Stage 5: A Brand should be Preferred

Deep awareness and a clear and distinct value proposition should translate into preference among prospective buyers. Many solid metrics can be used, but two key ones are preference from a set of choices and a measure of behavioral intent qualified with a time frame or context (if you were to buy one today…). If preference is low even if consumers believe in a unique value proposition, the logical strategy is to encourage trial in order to shift purchase inclinations. Many products and services involve habitual buying patterns – for example, a traveler may like one hotel brand but routinely book a competitor, so a special promotion may disrupt the pattern and change preference.

Stage 6: The Market should be Consuming the Brand and be Satisfied

It should be obvious that the best communications strategy can not overcome the fact that a product is inferior or service is poor, while an excellent product may build its own momentum through referrals. The short term outcome of low satisfaction is that repeat purchasing will drop and the brand will have detractors. The long term impact of satisfaction is that the reality of the product or service will drive the perception. Thus, brand equity measurement is not complete without questions about consumption, satisfaction, and willingness to recommend. If the brand suffers in this area, don’t blame the agency. Work needs to be done to improve product or service quality.

To sum it up, there are many facets to brand equity, including awareness, attitude, image, preference and satisfaction. All of these areas need to be considered in order to craft the appropriate marketing strategy for developing a brand. Some brands may merely need to raise awareness of their name, others may need to work on building confidence, while still others may need to work on differentiating themselves from competition.

A solid system for measuring and diagnosing brand equity includes a wide range of measures, including usage and satisfaction. Experienced researchers know what measures to use and how to weave them into a survey to minimize bias. Working with such information, savvy marketers know how to craft a message strategy and direct resources to develop a brand over time.

A brand is a name given to a product and/or service such that it takes on an identity by itself.In today’s marketplace teeming with thousands of products and services, all of which are being rapidly commoditized, a brand stands out from the clutter and attracts attention.

A brand name can create and stand for loyalty, trust, faith, premium ness or mass-market appeal, depending on how the brand is marketed, advertised and promoted.

A brand differentiates a product from similar other products and enables it to charge a higher premium, in return for a clear identity and greater faith in its function. A brand is also likely to survive longer than just an undifferentiated product.

A brand is akin to a living being: it has an identity and personality, name, culture, vision, emotion and intelligence. All these are conferred by the owner of the brand and needs to be continuously looked at to keep the brand relevant to the target it intends to sell to.

Brand as Undefinable

1. Brands mean different things to different people at different times.

A single brand means something unique to each person be it a current consumer, potential consumer, employee, recruit, or just within the world at large. Brands are dynamic. They can play a different role depending on who they interact with and when. Some people connect with certain aspects of a brand, while others connect meaningfully with another. And often times, a person’s relationship with a brand can really develop increasing trust, loyalty, meaning, and engagement. Smart and successful brands work on reaching all the different audiences who matter to their business and aim to further their brand relationships with each individual.

2. Brands are amorphous.

At Emotive Brand, we often think of brands as nebulous and infinite. A brand can be the sum of brand experiences or interactions, but those experiences and interactions have infinite possibilities. Every touchpoint matters. Each moment counts. Although we work on creating structure for brands in the form of brand architecture, that architecture always accommodates for growth and change so the brand can develop, expand, respond, and shift with the times.

3. Brands are about feelings, and feelings are complicated.

When you ask people why they love certain brands, it’s often hard for them to pin down. They might provide a list of rational and logical reasons, but in the end, it often comes down to a feeling. How does that brand really make them feel? And why do they come back for more of that feeling? Why does that feeling mean something to them? Successful brands today are always emotionally infused. They hold great emotional meaning for people and that’s what makes that brand loved and respected.

4. Highly recognizable, well-known brands are often used to define what a brand is.

More often than not, the question of defining what a brand is is answered with a list of popular, well-known, established brands. Think Nike, Apple, Google, etc. Although these examples can reveal a lot about what a brand is, just thinking of the definition in terms of these big names isn’t enough. Consider all types of brands big and small, global and local, new and old. Maybe even consider what businesses lack a brand and what makes them different from businesses who have built a brand they rely on. There’s a lot to learn from all the brands we interact with every day. Each brand is meaningful because of something different, and this is often what differentiates a brand and makes it powerful to the people who matter to it.

5. Defining the impact a brand can have is often easier than defining what a brand is.

When we talk about defining what a brand is, we often talk about what makes a brand impactful for a business: stronger ROI, an aligned leadership, a more engaged workplace, etc. And when we discuss impact whether it’s from a brand refresh, a new positioning, a great campaign, or just further brand engagement that’s where we see the brand really working. That’s where we see it living and doing its job. Take the impact of an engaged workplace. Here, we see the brand in action creating specific meaning and value tailored for employees and recruits of the right fit that increases innovation, productivity, creativity, loyalty.

Establishing A Brand

To create a brand, a truly great brand is one of the most powerful ways a business can differentiate it business, products or services from its competitors. Not only will a strong brand make customers sit up and take notice but it will allow your business to charge a premium over its competitor, build customer loyalty, drive sales and accelerate product differentiation in the market.

Your brand isn’t just an add-on to be considered as and when. It should be right at the centre of your business, affecting everything you do and simultaneously reflecting the sum of everything you do. It is, in essence, both the cause and effect of all your actions.

A brand is not just a logo, it’s the collective emotional response to the logo and other elements. Your branding is all geared towards generating that response.

Branding

A brand is a promise of a particular experience that has been created through the sum of various elements including the logo and tagline, the brand personality, promise, messaging and the visual elements.

The process of branding is building that brand, all the way from designing the logo, doing research into the name, working through the attributes, doing the focus group work branding is part of the business you are building.  Much like a Method actor lives and breathes his or her character, so too should a business live and breathe its brand if it wants to convince customers. Creating a brand, like an individual personality, is based on a set of behaviours and characteristics with the strength and consistency of these impacting on its effectiveness.

Advantages of branding

Branding is one of the most effective ways to separate your business from the rest of the market and build a loyal customer base but it also has many other benefits at the very least helping you to establish and grow your business among many other benefits.

Your business direction

Without the sense of purpose a brand gives you, how do you know if the direction you’re heading in is the right one for your business, or if the decisions you’re making are in keeping with the ideals of your business and customers? The decisions you make and the directions you choose can reinforce or completely undermine what your company stands for.

Nike’s co-founder, Philip Knight, once put it like this: “We wanted Nike to be the world’s best sports and fitness company. Once you say that, you have a focus. You don’t end up making wing tips or sponsoring the next Rolling Stones world tour.”

Your business growth

Every business needs to innovate its approach, products and services to grow. But a brand provides the DNA for that growth, rather than inhibiting it. Your brand is the seed that grows the plant of your growing business. The plant may have different aspects to it like products and services that change with the times. But they’re still underpinned by the DNA in that seed that is your brand. Your core values will always be visible, as will the consistent customer experience you provide. Growth without a brand in mind can see your customers desert you in their droves.

Your customer base

Your brand is the focus that keeps you building a solid, loyal customer base. Because when you consider your brand in everything you do, you’re essentially asking yourself the question: “How will this product [or service] impact on our customers’ lives? How will it make them feel differently than competitor products on the market?” These considerations are fundamental to the success of your business, which is why branding must be considered from the word go.

Your business reputation

Your brand gives you the ability to stand out from the crowd, particularly in competitive markets. How well you deliver on your brand promises and strengthen your brand through every area of your business can help make or break your business reputation. And there are few things more valuable to both maintaining existing customers and attracting new ones than a good, solid reputation.

Your customer communications

Every possible contact your business has with a new or existing customer should enforce your brand values. That doesn’t mean you need to be shoving what you stand for down your customers’ throats every time you answer the phone. It just means the way you interact with customers should be thought through and in keeping with your vision and purpose.

Every time you communicate with a customer or prospect, your brand should be felt whether this is through your advertising and promotional activities or customer-facing communications. Your brand is your DNA so make sure it works its way upwards through every layer of your organization.

What to consider when creating a brand

Coming up with a name and a logo at a minimum requires a huge amount of effort and research, the whole process of creating a brand is even more complex and time-consuming. So in order to help here’s a list of the things you should be aware of and consider when creating and building your brand.

A brand should reflect your core values

Everything you do, or what anyone working with you does, will reflect the brand. If you solve problems fast, save people money, do what you say you will listen to your customers, etc., all of this will be translated in their minds as what your business represents. When I work with any start-up, the last thing on my mind is building the brand. First, I want to know what they do differently and make sure that every form of communication and interaction with the outside world is consistent tone, messages, look and feel of the website, fact sheets, logo, etc. This is a pain and can be tricky but does not cost a fortune to do and is, in essence, how you build your brand.

Ultimately if you wish your business to mean/represent one thing and the feedback you get from the outside world is different, you have what is termed ‘brand dissonance’. In plain terms, listen up and change what needs to be changed! The devil is in the detail here, but it’s a question of making sure everything you are working on is consistent and comes across in the way you want. The next issue is to get those around you to do likewise; another challenge for another day.

In essence, your brand represents both who you are as an individual and what your business is as an enterprise. To start with, there is no difference between the two, but as your business grows this will come to mean different things, which in turn presents other issues. But irrespective of what you think about branding, it is ultimately a measure of your success; do things well, and its valuation will grow and with it.

The desired feeling you wish to communicate

What feeling is your product or service going to give the consumer? What is the desire or need it will fulfil? It might be the desire for freedom, safety, confidence or success, or something completely different. Understanding your audience is key their age, sex, ethnicity, income, education level and locale. What motivates them to buy? How do they think?

Once you’ve identified the purpose, define it as succinctly as you can as it will form the basis of your branding efforts. Consider this commonly used core purpose or mission: “We strive to meet or exceed expectations through exceptional service and a dedication to quality”. The problem with this is that it’s too ambiguous, it could belong to any number of businesses and so doesn’t differentiate the company from its competitors. It doesn’t tap into the hearts and minds of customers. So strive to identify exactly what does and make sure it’s something inspiring, specific and believable.

From this, you will be able to define your values which set out how you get your customers to that ‘place’ you’re taking them in their minds. This is not about your own personal values, this is your company’s values which underpin the purpose you’ve defined. They should reflect the vision, culture, and goals of the company and clarify what you stand for and why you do business the way you do. Core values focus on the “why”, more than the “how”. Why are these qualities the key to success? Leave room for these values to develop into new and exciting interpretations of possibilities later down the line, allowing your company to adjust and adapt in a changing world.

The more work you do in this area, the less you will need to spend on your branding and graphic design in the long run, as you’ll be able to approach your chosen branding or graphic design professionals with a clear outline of your core purpose and values. It costs you more in the long run if you don’t know what your brand is and can’t share it.

Create a brand message that is clear, compelling and consistent

Imagine you don’t know a thing about your company. Now tell yourself the key message you want customers to hear. Do you get a clear picture in your mind of the benefit to you as the customer? If not, why not? Have another look at your proposition and whittle it down to what distinguishes you. Is it price? Quality? Innovation? Or something else.

Use the ‘so what?’ Test to decide whether or not your USP is compelling. Read your USP to yourself. Does it warrant the response ‘so what?’ If so decide what you’re trying to say about the benefit you deliver and repeat the ‘so what?’ test until you have a truly compelling USP.

Once you’ve nailed it, be consistent, both in communication and in practice. You don’t have to be the best, just the most consistent. Few would argue that a Mr. Whippy is the best ice-cream in the world for example. But we know what it is, how it will look and taste and we can see at a glance which ice-cream vans stock it – and it’s been the same as long as we can remember. And these are the factors that sometimes make us want one, even though it’s not necessarily our most favourite ice-cream in the world! Consistency helps build trust and loyalty which are invaluable to your brand.

Understanding your customers

To create a brand that is successful requires you to understand the values of your target audience and focus your offering on these customers. Trying to be all things to all people will only dilute and confuse the strength and message of your brand.

Effective brand positioning and brand promise

The brand positioning is how the brand is perceived in the context of competitive alternatives. Brand positioning needs to remain consistent throughout all your marketing efforts, or customers will become confused. The brand promise addresses customers’ expectations about a product or service. Examples of brand promises include Coke’s, “To inspire moments of optimism and uplift” and Google’s, “To provide access to the world’s information in one click”.

Keeping your brand real

If you want people to buy into your brand, make it believable. Instead of claiming perfection, claim something more unique, justifiable and in keeping with your brand. Again, think of your company as a person. What kind of person goes around claiming perfection? More than likely someone you wouldn’t necessarily want to associate with or believe.

Creating brand elements (Logo, name…)

Creating a brand is about more than just a catchy name it is about creating a whole identity for your business and the products or services it sells. Once you’ve answered some or all of questions above and have some clarity of what you want your brand to me its time to start creating some branding elements, not least a name, logo and visual identity.

Brand name

When choosing your name, it’s a good idea to bear in mind what a useful tool it is in getting across to customers the benefit of using your business instead of your competitors’. After all, it’s the first thing your customers are going to see, and they’ll base split second judgements on it. Which is why it’s so important that it’s memorable and gives the right first impression. The perfect recipe for success is a good name combined with good branding.

One method which can be useful for inspiring trustworthiness is to link your business’ name to the area in which you operate customers associate such firms with strong local roots and a friendly approach. Humour or a play on words can help your business stand out, but the overriding aim is to make sure that whatever you choose is snappy, original and instantly informs the customer what the business does.

You’ll also need to bear in mind that your business name will dictate which Web domain you can register and your trademark if applicable.

Brand logo

Next, you need an eye-catching logo to be used alongside the brand indeed in some cases instead of the brand. Successful logos include the Nike ‘swoosh’, the London Underground symbol and Mcdonald’s golden arches. You know when brand identity is working when consumers can recognise your brand from the logo only they just know it.

Most successful businesses will tell you that logos matter a lot. In the early days of your new business especially, perception is everything. So investing a little money to encourage the perception that you’re professionals is pretty high up the agenda for the vast majority of new businesses.

You’ll want to work toward something smart, not just something pretty. What I mean by that is you need to begin with a thought: What is the emotional response (worked out in step one) that you want your product to elicit? What else can you think of that will help people understand not just what you do but how you’re different from your competitors?

Brand indentity & visual identity

Finally, you need to create a strong identity for your business which runs through everything you do. To do this, you need to firmly establish what your company stands for. Do you want to be seen as a funky cutting-edge high fashion business, for example, or would you rather be seen as solid, dependable and reliable? What is the core idea of the company and the message you want to project? You can come up with the most fantastic name and logo, but if you have no vision or proposition for the company, then it’s just not going to work.

Creating brand assets and marketing materials

If your website, stationery, etc. exude and reinforce your values, your brand will be strengthened. But if they don’t, your brand and your business could be seriously damaged. For example, your product could genuinely be of a high quality. You may have sourced the very best components available. But if you’ve got a naff, clip-art logo and poor quality stationery, that undermine your promises of quality, you’re fighting a losing battle with customers. You can tell them your product is superior until you’re blue in the face. If they do not see that message reflected consistently in every area of your business, they’ll head to a supplier they’re more sure of instead.

Protecting your brand

Branding isn’t a one-off event your brand needs to be continually protected. Take out trademarks to safeguard your brand name, logo and tagline. You can also use trademarks to protect phrases and groups of words that you use as part of your brand. You can apply for trademarks online via the Intellectual Property Office website. Protect designs associated with your business by registering them under UK Design Protection, again through the Intellectual Property Office. Make sure you continually monitor your brand identity to ensure that it remains relevant. Remember that brands can be tweaked and refreshed along the way.

1. Jury of Executive Opinion:

This method of sales forecasting is the oldest. One or more of the executives, who are experienced and have good knowledge of the market factors make out the expected sales. The executives are responsible while forecasting sales figures through estimates and experiences. All the factors-internal and external are taken into account. This is a type of committee approach. This method is simple as experiences and judgement are pooled together in taking a sales forecast figure. If there are many executives, their estimates are averaged in drawing the sales forecast.

Merits:

(a) This method is simple and quick.

(b) Detailed data are not needed.

(c) There is economy.

Demerits:

(a) It is not based on factual data.

(b) It is difficult to draw a final decision.

(c) More or less, the method rests on guess-work, and may lead to wrong forecasts.

(d) It is difficult to break down the forecasts into products, markets, etc.

2. Sales Force Opinion:

Under this method, salesmen, or intermediaries are required to make out an estimate sales in their respective territories for a given period. Salesmen are in close touch with the consumers and possess good knowledge about the future demand trend. Thus all the sales force estimates are processed, integrated, modified, and a sales volume estimate formed for the whole market, for the given period.

Merits:

(a) Specialized knowledge is utilized.

(b) Salesmen are confident and responsible to meet the quota fixed.

(c) This method facilitates to break down in terms of products, territories, customers, salesmen etc.

Demerits:

(a) Success depends upon the competency of salesmen.

(b) A broad outlook is absent.

(c) The estimation may be unattainable or may to too low for the forecasts as the salesmen may be optimistic or pessimistic.

3. Test Marketing Result:

Under the market test method, products are introduced in a limited geographical area and the result is studied. Taking this result as a base, sales forecast is made. This test is conducted as a sample on pre-test basis in order to understand the market response.

Merits:

(a) The system is reliable as forecast is based on actual result.

(b) Management can understand the defects and take steps to rectify.

(c) It is good for introducing new products, in a new territory etc.

Demerits:

(a) All the markets are not homogeneous. But study is made on the basis of a part of a market.

(b) It is a time-consuming process.

(c) It is costly.

4. Consumers’ Buying Plan:

Consumers, as a source of information, are approached to know their likely purchases during the period under a given set of conditions. This method is suitable when there are few customers. This type of forecasting is generally adopted for industrial goods. It is suitable for industries, which produce costly goods to a limited number of buyers- wholesalers, retailers, potential consumers etc. A survey is conducted on face to face basis or survey method. It is because changes are constant while buyer behaviour and buying decisions change frequently.

Merits:

(a) First hand information is possible.

(b) User’s intention is known.

Demerits:

(a) Customer’s expectation cannot be measured exactly.

(b) It is difficult to identify actual buyers.

(c) It is good when users are few, but not practicable when consumers are many.

(d) Long run forecasting is not possible.

(e) The system is costly.

(f) Buyers may change their buying decisions.

5. Market Factor Analysis:

A company’s sales may depend on the behaviour of certain market factors. The principal factors which affect the sales may be determined. By studying the behaviours of the factors, forecasting should be made. Correlation is the statistical analysis which analyses the degree of extent to which two variables fluctuate with reference to each other.

The word ‘relationship’ is of importance and indicates that there is some connection between the variables under observation. In the same way, regression analysis is a statistical device, which helps us to estimate or predict the unknown values of one variable from the known values of another variable.

For instance, you publish a text book on “Banking”, affiliated to different universities. The permitted intake capacity of each and the medium through which the students are taught are known. Is it a compulsory or an optional subject? By getting all these details and also by considering the sales activities of promotional work, you may be able to declare the probable copies to be printed.

The key to the successful use of this method lies in the selection of the appropriate market factors. Minimizing the number of market factors is also important. Thus the demand decision makers have to consider price, competitions, advertising, disposal income, buying habits, consumption habits, consumer price index, change in population etc.

Merits:

(a) It is a sound method.

(b) Market factor is analysed in detail.

Demerits:

(a) It is costly.

(b) It is time-consuming.

(c) It is a short run process.

6. Expert Opinion:

Many types of consultancy agencies have entered into the field of sales. The consultancy agency has specialized experts in the respective field. This includes dealers, trade associations etc. They may conduct market researches and possess ready-made statistical data. Firms may make use of the opinions of such experts. These opinions may be carefully analysed by the company and a sound forecasting is made.

Merits:

(a) Forecasting is quick and inexpensive.

(b) It will be more accurate.

(c) Specialized knowledge is utilized.

Demerits:

(a) It may not be reliable.

(b) The success of forecasting depends upon the competency of experts.

(c) A broad outlook may be lacking.

7. Econometric Model Building:

This is a mathematical approach of study and is an ideal way to forecast sales. This method is more useful for marketing durable goods. It is in the form of equations, which represent a set of relationships among different demand determining market factors. By analyzing the market factors (independent variable) and sales (dependent variable), sales are forecast. This system does not entirely depend upon correlation analysis. It has great scope, but adoption of this method depends upon availability of complete information. The market factors which are more accurate, quick and less costly may be selected for a sound forecasting.

8. Past Sales (Historical method):

Personal judgement of sales forecasting can be beneficially supplemented by the use of statistical and quantitative methods. Past sales are a good basis and on this basis future sales can be formulated and forecast. According to Kirkpatrick, today’s sales activity flows into tomorrow’s sales activities; that is last year’s sales extend into this year’s sales. This approach is adding or deducting a set of percentage to the sales of previous year(s). For new industries and for new products, this method is not suitable.

(a) Simple Sales Percentage:

Under this method, sales forecast is made by adding simply a flat percentage of sales so as to forecast sales as given below:

Next year sales = Present year sales + This year sales/Last year sales

or = Present year sales + 10 or 5% of present sale

(b) Time Series Analysis:

A time series analysis is a statistical method of studying historical data. It involves the isolation of long time trend, cyclical changes, seasonal variations and irregular fluctuations. Past sales figures are taken as a base, analysed and adjusted to future trends. The past records and reports enable us to interpret the information and forecast future trends and trade cycle too.

Merits:

(a) No guess-work creeps in.

(b) The method is simple and inexpensive.

(c) This is an objective method.

Demerits:

(a) ‘Market is dynamic’ is not considered.

(b) No provision is made for upswings and downswings in sales activities.

9. Statistical Methods:

Statistical methods are considered to be superior techniques of sales forecasting, because their reliability is higher than that of other techniques.

They are:

(i) Trend Method

(ii) Graphical Method

(iii) Time-series Method:

(a) Freehand method

(b) Semi-average method

(c) Moving average method

(d) Method of least square

(iv) Correlation method

(v) Regression method.

NB:

The above statistical methods can easily be studies with the help of any statistics book.

Apart from the above, the following factors may also be considered:

1. Availability of raw materials
2. Plant capacity
3. Government policies
4. Buying habits of consumers
5. Fashion changes
6. Distribution system
7. Financial capacity
8. Market competition
9. National income movement
10. Sales promotions.

Creating an effective strategy for your marketing efforts doesn’t happen all at once, and neither is it a problem only the marketing department has to deal with. Once you implement the marketing strategy, the entire company will have to deal with the consequences. An important part of the marketing strategy is the forecasting process. Perhaps the most important forecast in this respect is the sales forecast, which estimates how much will be sold by the company within a given time period. The rest of the company should be prepared to meet the demands of the sales forecast.

When it comes to preparing forecasts, of utmost importance is accuracy. If you overestimate how much consumers will demand of your product, then you could end up spending an exorbitant amount of money, on such things as manufacturing and distribution, only to be unable to recoup it, when the actual sales start to flow in. When you overestimate demand, you might overextend yourself financially and find that your revenue is incapable of paying your vendors, suppliers, and other business creditors. Sometimes, you might have to lay off your employees.

Performing an underestimation of demand levels can also be disastrous for your company. When you introduce a new product into the market, you have to market it in order to generate demand for the product. In case you are incapable of delivering just the right amount of product as demanded by the market, then your market share is in danger of being snatched away from you by your competitors. If your competitors’ products can match or exceed yours in quality, then you might never be able to recover your market share.

Your marketing department has to do a lot more than simply generate sales forecasts. Their forecasts have to be a little more elaborate because there will be many factors that will determine how much your company will be able to sell. These factors, such the reaction of your competitors, the cost of the products, and others should be considered to determine how much you are likely to sell. As the factors change over time, you will also have to change your forecasts. A sales forecast is therefore really a special forecast that is the composite of a variety of estimates and it has to be dynamic enough to change.

Usually, the first step to take is to determine something called market potential. This is an estimate of the total sales expected across the industry for a given product category within a certain time frame. It could be a month, a quarter, a year, and so on. The key idea here is the market potential is an estimate of what the market can take in total, from all the companies within it, so it includes both you and your competitors.

Once you have a good idea of what the market potential is, you can estimate the sales potential. This is an estimate of the maximum revenue you are likely to generate from the sale of a product. Alternatively, you can estimate it as the maximum number of units of the product that your company can hope to sell in a given market over a given time period. The sales potential is typically represented in percentage terms, where it is a percentage of the market potential. It is also the same as the estimate of the markets total market share in a given time period. Any method that forecasts sales potential is therefore also a market share forecasting method.

Companies will typically sell less than their sales potential. After all, not everyone that is expected to buy a product will end up buying that product. Some will postpone their purchases while others will never make it. Others yet will buy the product from your competitors while others still will prefer some kind of substitute. As you make a budget, it is a good idea to compare the revenue forecasts against both the costs of the product and the market potential.

Different Forecasting Methods

A forecast is really nothing more than a guess of what is likely to happen. This kind of guess, however, is neither arbitrary nor frivolous. It is the product of an elaborate process. There are lots of different processes by which you can make a forecast and most forecasts are arrived at by blending several of these processes.

Survey and Judgement Forecasting Techniques

The most important thing to understand before forecasting is that a forecast is really just a judgment made by someone. Some techniques rely more on judgment than others, however, and they are generally known as judgment techniques. These techniques include customer surveys, expert opinions, customer intention survey, and estimates by salespeople.

Channel and Customer Surveys: In some kinds of markets, such as business to business markets, research companies tend to ask customers how much they are likely to spend on given products in a given time period. The answers are used to make a forecast. The research companies will then sell the research to companies. Sometimes the companies will conduct their own surveys to produce their own forecasts. These surveys are generally better at determining the market potential than the sales potential. They are, therefore, market potential forecasting methods. After all, a consumer probably knows what they’ll buy, but isn’t always so sure of which brand they’ll buy from.

Sales Force Composite: This is a type of forecast based on information gathered from the sales force of a company. Salespeople usually have a good intuition of how much of a product can reasonably sell in a given time period. They’re close to the customer and therefore know firsthand what is realistically possible. It’s usually harder for salespeople to estimate sales of a new product, however, unless they have sold such products before. This method of forecasting is therefore not suitable to new products. It is typically best used for existing products and near-term estimates.

Executive Opinion: This is pretty much the best guess of the company executives. It is usually the starting point of many forecasts. It can be made even more thorough and accurate by basing the bonuses of executives on the amount of sales they make. They will, therefore, have an incentive to generate well-thought-out opinions on the sales potential of a product. Nonetheless, executive opinion should always be backed by quantitative techniques and research.

Expert Opinion: This is just like executive opinion, only the expert is a third party from outside the company. Just like executive opinion, it should also be backed by research and quantitative methods.

Time Series Forecasting Techniques

Time series techniques observe patterns in sales. One of these techniques, trend analysis, can be used to measure the rate of growth of sales in the past and extrapolate it to the future. A past growth of 3 percent in sales year over year might be a good basis to estimate future growth at 3 percent, as well. Time series analysis is most useful in a stable market. A market that either fluctuates or frequently gets disrupted will not lend itself very well to this method.

Correlates Techniques

There are a variety of highly sophisticated forecasting models that can be used to forecast sales. One of these is correlational analysis, which is a special form of trend analysis. It bases sales forecasts on the trend patterns of related variables. For example, furniture making companies frequently base their future furniture sales on the rate at which new houses are being built.

Response Models

Sometimes a company will base its forecasts based on past responses of customers to marketing techniques. They can then estimate when customers are price sensitive, how they respond to offers, and so on.

Market Tests

This isn’t as much a forecasting method as it is an experiment. The company launches a new product in a small market in order to gain knowledge of how the larger market would respond to the product based on the reaction of the smaller market. Such an experiment will typically show how the marketing plan can influence sales. That is why it is called a response model. Once data has been gained from the limited market, it can easily be extrapolated to the larger market.

The importance of market forecasting cannot be understated. With a good idea of what to expect from the market, your company will be better able to anticipate and meet its needs.

Different companies call the process of forecasting the need for future goods or services different things. Some refer to the process as sales forecasting, while others call it demand forecasting or product forecasting. No matter what terms are used, market demand, market potential and sales forecasting are inextricably tied together by virtue of the end result knowing what, how much and when consumers want to purchase goods or services.

Market Demand

Demand reflects the willingness of a consumer to purchase a good or service. Market demand reflects the willingness of all consumers within a given market to purchase a good or service. Companies spend millions of dollars on software and experts to help them predict or forecast market demand. Companies forecast market demand because it fluctuates and has an unstable nature. If every company knew exactly how many people would buy a given product or service, the need to forecast market demand would evaporate.

Market Potential

One company selling widgets in a certain market has a certain percentage of that market’s total sales volume. The maximum number of widgets sold by every company that sells widgets in that same market comprises the market potential for widgets in that market. Market potential refers to the maximum sales volume of any given product or service in a given market before the product or service reaches market saturation.

Sales Forecasting

Sales forecasting refers to the process by which a company attempts to predict future market demand of a product or service. Companies typically use historical sales data to predict future market demand. Problems can occur with blindly using historical sales data as a forecast input because at times it does not parallel actual market demand.

Demand Vs. Sales

For example, a furniture company makes a very popular dining room set but has constant production issues in manufacturing. Because of these issues, it cannot keep up with demand for the product. At the end of the year, the historical sales data show the company sold 5,000 of the dining room sets between September and December, but the historical sales data misses a vital piece of the demand equation: It doesn’t show the 2,500 dining room sets people came into the store to buy but couldn’t because the company could not produce the goods in time. The additional 2,500 potential sales make the actual market demand 7,500 units (5,000 sold + 2,500 missed sales). If the dining room continued to sell at its current rate and the company only used the 5,000 units as an input to forecast the future market demand, the forecast would fall short during the same time period next year because it does not reflect the actual market demand of 7,500 units. The result leads to loss sales and revenue.

Considerations

Despite being called “sales forecasting,” the goal remains forecasting future market demand. This becomes more difficult when trying to forecast new goods or services and the market potential for these new products. Many different forecast methods exist for determining market potential, but as with all forecasts the result is inherently wrong, the Don Rice Company notes. Whether forecasting market demand or market potential, using clean, accurate and relevant data–human and system-generated–gets the forecasting process off to a good start.

Creating an effective strategy for your marketing efforts doesn’t happen all at once, and neither is it a problem only the marketing department has to deal with. Once you implement the marketing strategy, the entire company will have to deal with the consequences. An important part of the marketing strategy is the forecasting process. Perhaps the most important forecast in this respect is the sales forecast, which estimates how much will be sold by the company within a given time period. The rest of the company should be prepared to meet the demands of the sales forecast.

When it comes to preparing forecasts, of utmost importance is accuracy. If you overestimate how much consumers will demand of your product, then you could end up spending an exorbitant amount of money, on such things as manufacturing and distribution, only to be unable to recoup it, when the actual sales start to flow in. When you overestimate demand, you might overextend yourself financially and find that your revenue is incapable of paying your vendors, suppliers, and other business creditors. Sometimes, you might have to lay off your employees.

Performing an underestimation of demand levels can also be disastrous for your company. When you introduce a new product into the market, you have to market it in order to generate demand for the product. In case you are incapable of delivering just the right amount of product as demanded by the market, then your market share is in danger of being snatched away from you by your competitors. If your competitors’ products can match or exceed yours in quality, then you might never be able to recover your market share.

Your marketing department has to do a lot more than simply generate sales forecasts. Their forecasts have to be a little more elaborate because there will be many factors that will determine how much your company will be able to sell. These factors, such the reaction of your competitors, the cost of the products, and others should be considered to determine how much you are likely to sell. As the factors change over time, you will also have to change your forecasts. A sales forecast is therefore really a special forecast that is the composite of a variety of estimates and it has to be dynamic enough to change.

Usually, the first step to take is to determine something called market potential. This is an estimate of the total sales expected across the industry for a given product category within a certain time frame. It could be a month, a quarter, a year, and so on. The key idea here is the market potential is an estimate of what the market can take in total, from all the companies within it, so it includes both you and your competitors.

Once you have a good idea of what the market potential is, you can estimate the sales potential. This is an estimate of the maximum revenue you are likely to generate from the sale of a product. Alternatively, you can estimate it as the maximum number of units of the product that your company can hope to sell in a given market over a given time period. The sales potential is typically represented in percentage terms, where it is a percentage of the market potential. It is also the same as the estimate of the markets total market share in a given time period. Any method that forecasts sales potential is therefore also a market share forecasting method.

Companies will typically sell less than their sales potential. After all, not everyone that is expected to buy a product will end up buying that product. Some will postpone their purchases while others will never make it. Others yet will buy the product from your competitors while others still will prefer some kind of substitute. As you make a budget, it is a good idea to compare the revenue forecasts against both the costs of the product and the market potential.

International Marketplace

A market is a structure that allows people and businesses to exchange goods and services. For example, the United States is a market. China is a market. Together, the U.S., Canada, and Mexico are a market that is governed by NAFTA, the North American Free Trade Agreement.

Now, let’s define an international market.

International market is not defined as one geographic location, but allows the trade of goods and services anywhere in the world. For example, Apple is a U.S. company. It purchases supplies from several countries, and then has its products manufactured in Taiwan. Once the product has been assembled, it is transported to the U.S., Europe, Australia, and Asia.

Entering the international marketplace is a huge opportunity for a company to meet the needs of an international market, while possibly increasing sales exponentially. Of course, there are advantages and disadvantages, as with any marketing strategy. But the international market is definitely an excellent opportunity for any marketer.

Creating the international marketing plan

A marketing plan is the full beginning-to-end strategy used to bring a product to market, and get it in the hands of the consumer. It requires planning and excellent organizational skills. The marketer wants to understand the consumer insight, and meet those needs with the product and marketing plan.

Small businesses will obviously have a smaller plan than a large corporation, and it’s important the marketer doesn’t over-do it. Small businesses should have a marketing plan that is around 15 pages or less.

Before the plan can be written, the following information should be available:

• The company’s latest financial statements, as well as sales figures broken down by product and location
• A list of each product or service the company offers, including the markets they target
• A table that breaks down the organization, especially if it is a large company
• A written statement from the marketing team detailing their understanding of the marketplace
• Statements from each employee involved in the marketing process that detail what they think must be included in the new marketing plan

When beginning, the marketer will want to focus on three items:

1. Completion date

The marketer must set a date for when the plan should be completed. It can be a long process, involving many people and departments. So it is key the marketer has a goal end-date.

2. Who is responsible?

Each member of the marketing team should have a defined role, which they should clearly understand and be prepared for. They must be responsible for their part; otherwise the plan will never come together.

3. The budget

A marketing plan can cost a lot of money, so establish a budget and stick to it. You don’t want to end up with no money, and have to finish the marketing plan without funds.

Entry into the International Market

In order to enter into an international market, a company must have a mode of entry. There are many ways to enter the international market, but we will detail the top methods here.

1. Licensing

Licensing consists of three types of licensing contracts.

Licensing is when a company requires a fee for the use of its brand. Franchising is when the company (the franchiser) provides branding expertise to the franchisee. Examples include McDonald’s, Subway, and Dunkin’ Donuts.

Turnkey contracts are major corporate agreements to build large plants. They usually include the training of employees.

2. International Agents

Agents are often used as a way for a company to enter the international market. Agents are people or organizations that are contracted by a business to market on their behalf in a certain country. Agents don’t own any of the products they simply earn a commission on any products sold.

Agents usually represent more than on company at a time. They are inexpensive, but can be difficult to manage. If a company intends to go international, it should make sure the agent contract is revocable. It can be difficult for the marketer to work in the international market, especially in the beginning, when it is new. So setting goals and targets can be difficult at first.

Using an agent can be an easy solution for a company new to the international market, but be aware that the agent can represent a competitor at the same time. So be aware there might be conflicts of interest. They can also be costly to recruit and train, and with a international market, there can be language and cultural issues.

Distributors are another option, and they are similar to agents, except they do take ownership of the product. Ownership gives them incentive to move the product quicker, and attempt to make a profit from it. Otherwise, they have the same pros and cons as an agent.

3. Strategic Alliances

This term describes a series of different types of professional relationships that can work as an intermediary between the company and the international marketplace. Sometimes, there can be a strategic alliance between competitors.

Here are some examples of strategic alliances:

• Shared manufacturing – An example would be two car companies sharing the same manufacturer.
• Research and Development – This could happen when two companies decide to share R&D facilities.
• Distribution alliances
• Marketing alliances

These types of alliances are non-equity, so each company remains independent.

4. Joint Ventures

Joint ventures are usually equity relationships, with a new company being formed to handle the international split. There are several reasons why a company would set up a joint venture to help them enter the international market. Some of these reasons are:

• Access to new technology
• Just to gain entry into a foreign market
• To gain access to new distribution channels, manufacturing, or R&D

5. Overseas Manufacturers

If a company is large enough, owning an overseas manufacturing plant might be the best choice. Investing in the plant, machinery, and labor can also be cheaper, if currency rates are working in the company’s favor. This is referred to as Foreign Direct Investment (FDI).

This can be a newly built plant, or the company could acquire a current business that has acceptable facilities.

Benefits of planning in international markets

Many marketing experts have argued that a well-developed planning process is fundamental for the achievement of a coherent approach when attacking international markets. The principal benefits of planning in international markets are:

• International market Planning encourages proactivity rather than reactivity so that the company is able to steer its own destiny rather than simply react to events. Firms need to gain competitive advantage by moving into new markets or developing more aggressive strategies in old markets.
• It encourages a systematic process of analysis of all the factors involved in decisions, rather than simply those uppermost in the decision-maker’s mind at a particular moment.
• Firms are forced to state objectives and policies clearly and precisely so that they are not misinterpreted by individual managers who might be quite remote from the point at which decisions are made.
• As the management task becomes more complex in dealing with many different markets it is essential that managers become more focused in their thinking.
• As the environment becomes increasingly complex and unstable, planning prepares the company for reacting quickly and decisively in a coordinated and effective way.
• It helps the company to coordinate strategies in different markets for the benefit of the company as a whole, so that it can out-perform the competition
• As ease of communication and mobility increases, customers must be able to find familiar product or service ‘offers’ in each market.
• Planning facilitates the development of common performance and quality standards which can be used for company-wide control.
• The participation of managers in the international market planning process increases ownership and loyalty and also allows easier intra-company transfer and career development. This is particularly important where there are major cultural differences.
• A better understanding of the requirements of other functions and subsidiaries in different countries reduces internal company conflict and encourages the selection of strategies which will be beneficial for the whole company.
• International market Planning necessitates the development of company-wide standardized information transfer systems so that the accessibility and value of information is improved.
• Short-term action and control measures and long-term strategies can be integrated through effective market planning.

The extent to which individual companies realize these benefits in practice, however, is dependent on a number of largely internal and controllable factors such as the nature and structure of the company, the stage of evolution of the organization and the managerial philosophy, all of which have a major impact on the culture of the firm. MNEs (multi-national enterprises) are making fundamental decisions about the way that they will operate in future.

Positioning strategies can be conceived and developed in a variety of ways. It can be derived from the object attributes, competition, application, the types of consumers involved, or the characteristics of the product class. All these attributes represent a different approach in developing positioning strategies, even though all of them have the common objective of projecting a favorable image in the minds of the consumers or audience.

There are seven approaches to positioning   strategies:

1. Using Product characteristics or Customer Benefits as a positioning strategy

This strategy basically focuses upon the characteristics of the product or customer benefits. For example if I say Imported items it basically tell or illustrate a variety of product characteristics such as durability, economy or reliability etc. Lets take an example of motorbikes some are emphasizing on fuel economy, some on power, looks and others stress on their durability. Hero Cycles Ltd. positions first, emphasizing durability and style for its cycle.

At time even you would have noticed that a product is positioned along two or more product characteristics at the same time. You would have seen this in the case of toothpaste market, most toothpaste insists on ‘freshness’ and ‘cavity fighter’ as the product characteristics. It is always tempting to try to position along several product characteristics, as it is frustrating to have some good characteristics that are not communicated.

Strategy of positioning

2. Pricing as a positioning strategy

Quality Approach or Positioning by Price-Quality: Lets take an example and understand this approach just suppose you have to go and buy a pair ofjeans, as soon as you enter in the shop you will find different price rage jeans in the showroom say price ranging from 350 rupees to 2000 rupees. As soon as look at the jeans of 350 Rupees you say that it is not good in quality.

Why? Basically because of perception, as most of us perceive that if a product is expensive will be a quality product where as product that is cheap is lower in quality. If we look at this Price – quality approach it is important and is largely used in product positioning. In many product categories, there are brands that deliberately attempt to offer more in terms of service, features or performance. They charge more, partly to cover higher costs and partly to let the consumers believe that the product is, certainly of higher quality.

3. Positioning strategy based on Use or Application

Lets understand this with the help of an example like Nescafe Coffee for many years positioned it self as a winter product and advertised mainly in winter but the introduction of cold coffee has developed a positioning strategy for the summer months also.

Basically this type of positioning-by-use represents a second or third position for the brand, such type of positioning is done deliberately to expand the brand’s market. If you are introducing new uses of the product that will automatically expand the brand’s market.

4. Positioning strategy based on Product Process

Another positioning approach is to associate the product with its users or a class of users. Makes of casual clothing like jeans have introduced ‘designer labels’ to develop a fashion image. In this case the expectation is that the model or personality will influence the product’s image by reflecting the characteristics and image of the model or personality communicated as a product user.

Lets not forget that Johnson and Johnson repositioned its shampoo from one used for babies to one used by people who wash their hair frequently and therefore need a mild people who wash their hair frequently and therefore need a mild shampoo. This repositioning resulted in a market share.

5. Positioning strategy based on Product Class

In some product class we have to make sure critical positioning decisions For example, freeze dried coffee needed to positions itself with respect to regular and instant coffee and similarly in case of dried milk makers came out with instant breakfast positioned as a breakfast substitute and virtually identical product positioned as a dietary meal substitute.

6. Positioning strategy based on Cultural Symbols

In today’s world many advertisers are using deeply entrenched cultural symbols to differentiate their brands from that of competitors. The essential task is to identify something that is very meaningful to people that other competitors are not using and associate this brand with that symbol.

Air India uses maharaja as its logo, by this they are trying to show that we welcome guest and give them royal treatment with lot of respect and it also highlights Indian tradition. Using and popularizing trademarks generally follow this type of positioning.

7. Positioning strategy based on Competitors

In this type of positioning strategies, an implicit or explicit frame of reference is one or more competitors. In some cases, reference competitors can be the dominant aspect of the positioning strategies of the firm, the firm either uses the same of similar positioning strategies as used by the competitors or the advertiser uses a new strategy taking the competitors’ strategy as the base.

A good example of this would be Colgate and Pepsodent. Colgate when entered into the market focused on to family protection but when Pepsodent entered into the market with focus on 24 hour protection and basically for kids, Colgate changed its focus from family protection to kids teeth protection which was a positioning strategy adopted because of competition.

Product development strategy is the process of bringing a new innovation to consumers from concept to testing through distribution. When existing business revenue platforms have plateaued, it is time to look at new growth strategies. New product development strategies look at improving existing products to invigorate an existing market or create new products that the market seeks.

The steps involved in product development are similar in each type of strategy.

1. Improve Existing Products

Improving existing products is an efficient method for product development. It is not as expensive as creating a new product because a lot of the time and resources were already devoted to creating the original product. Businesses then take feedback from consumers and find ways to improve upon products. .

The technology industry is well known for this. Think about the latest version of your smartphone or desktop operating system; the foundation was created in a previous version. Sometimes there are 10 previous versions, each building on the one before.

2. Across all Industries

However, improving existing products is not limited to any one industry. Exercise equipment rolls out new models. Even pen manufactures find ways to improve ink flow and reduce smudging, making the product better. The goal of improving a product is to take an already successful product that consumers love and use, and then improve the product to maintain, or increase, the competitive advantage.

3. Create New Products

Innovative new products are risky because you don’t know how consumers will respond to something new. This is why developing the product properly is imperative. New products enter into the market all the time. Large corporations are constantly developing new products.

The evolution of home deodorizers started with candles and air fresheners to plug-in wall diffusers. Each was a new product intended to improve upon older, less effective methods.

4. Bringing New Products to Market

Crowdfunding, infomercials and television shows such as Shark Tank encourage inventors to bring innovations to market. One such product was a bee box with a spigot that enabled honey to be collected more easily. New products require that the maker identify a need and then develop a solution to make life easier, safer or more enjoyable.

5. The Steps in Product Development

Whether you’re improving an existing product or innovating a completely new product, follow a process to ensure you are creating a product that consumers will buy and use. Identify the need. If this is an existing product that needs improvement, there may have been an oft-reported problem with the product. Creating a new product often results from hearing common complaints about a similar issue.

For example, tablets were created because people enjoyed the convenience of smartphones but wanted a larger yet portable platform to work on.

6. Develop Prototypes Based on Research

Survey the market and develop a prototype based on the collected data. Find out what people like and don’t like about an existing product. Determine if any patterns exist for consumers that are showing a trending problem.

For example, vacuums have become more nimble with articulating joints, because consumers reported that they did not like heavy vacuums that were difficult to maneuver. Once prototypes exist, develop a financial plan for scaling production and establishing the target market with reasonable sales estimates.

7. Test the Market and Adjust

Test the product in the market with smaller runs. Keenly observe sales and actively seek feedback from real consumers on the real product. Adjustments might be required before going into mass production and commercialization.

Developing a product strategy is the toughest and the most difficult job that has to done by the marketer. Creating an efficient marketing strategy for a new or even existing product is done by every marketer and consists of different steps which are as follows:  

• Establishing the objective that the product should acquire
• Selecting the strategic alternatives for the achievement of the objective
• Selecting the customers who should be targeted
• Identifying the competitor target
• Deciding on the core strategy for the product
• Description of the marketing mix i.e product, price, place ,promotion
• Deciding for the supporting functional programs

Establishing the objective: For deciding the objective of the product , it should be taken care that it should have the following characteristics:

• They can be quantified based on the performance.
• The should be more of challenging and practical.
• They should focus more on increasing the revenue for the firm in terms of share of market
• They should increase the profitability of the firm

Positioning strategy for the firm: In order to develop the product strategy the firm also needs to focus on the positioning strategy. Some factors that affect the positioning of the firm are:

• The product
• Firm behind it
• Competitors
• Customers

Positioning: Choice of customer targets

The choice of selecting customers for effective positioning is based on some important considerations:

• Size of the segment selected
• Resources available
• Various opportunities for obtaining the competitive advantage

Positioning: Core Strategy

The core strategy defines the unique or distinctive advantage that has to be delivered to target customers in terms of price of the product and the values or offerings from the product.

Positioning Methods

The type of the product has a major impact on the positioning techniques. Different types of product are positioned in different way. According to this products are classified into different types:

• Daily use product
• Impulse product
• Speciality items
• Industrial products

The technique in which the product needs to be positioned is also classified on the basis of following considerations:

• On the basis of benefits delivered
• On the type of usage
• For a particular user category
• On the basis of the price
• On the basis of the quality
• On the basis of product specification
• On the basis of lifestyle of the user
• On the basis of reference groups