Some Criteria for Determining Perceptions of Quality

(4) Product Development Upon evaluation, if all expectations are met, consider further research and testing, produce a finished product and market test it Development report must spell out in detail Results of the studies by the engineering department Required plan design Production facilities design Tooling requirements Marketing test plan Fully developed marketing mix Financial program survey Estimated release date Test Marketing The main goal is to evaluate and adjust, if necessary, the marketing strategy to be used in the marketing mix Developers can use interaction with buyers as a foundation for future product development Throughout the process, findings are being analyzed and forecasts of volume developed Upon completion of the test market, prepare a final marketing plan in preparation for launch

(5)

Field Test Market In a field test market, the product is introduced into the market on a limited basis. A select market (geographic) is chosen and the product is tested in that market to see how the customers react to the product. Laboratory Test Market Targeted customers are invited into the laboratory and are shown the product (taste, use, etc.), are shown promotions/advertisements for the product, etc. and are then asked their opinion on everything from product features to product pricing to product image. Two questions to be asked 1.

2.

Do I test market? If Yes to #1, do I field test or laboratory test?

Answers depend on: Cost Competition Do my competitors get an advantages from my test marketing?

Commercialization The firm commits to introducing the product into the marketplace

Heavy emphasis is placed on organizational structure and management talent needed to implement the marketing strategy Follow-up to eliminate bugs in the design, production costs, quality control, and inventory requirements Procedures and responsibility for evaluating the success of the new product by comparison with projections are also finalized

Time to Market Defined as the elapsed time between product definition and marketplace product availability Well documented that companies that reach the market first with a new product enjoy both profit and market share advantages Increasingly, companies are bypassing time-consuming regional test markets, when feasible, in favor of national launches Measurements of New Product Performance

Causes of New Product Failure #3 PP- Faulty estimates of market potential and other marketing research mistakes #3 PP- Faulty estimates of production or marketing costs #3 PP- No competitive point of difference, unexpected reactions from competitors, or both #3 PP and #4 PD - Poor quality of product #4 PD Poor positioning #4 PD Poor perceived price/quality (value) relationship #4 PD Nondelivery of promised benefits of product #4 PD Improper channels of distribution selected #4 PD Too little marketing support Rapid change in the market (economy) after product introduction (or during the new product development process)

Research Considerations What is the anticipated market demand over time? Are the potential applications for the product restricted? Can the item be patented? Are there any antitrust problems? Can the product be sold through present channels and the current sales force? What number of new salespersons will be needed? What additional sales training will be required?

At different volume levels, what will be the unit manufacturing costs? What is the most appropriate package to use in terms of color, material, design, and so forth? What is the estimated return on investment? What is the appropriate pricing strategy?