Q.1 Explain the various stages involved in new product development.
A.1 New product development process:
stage 1 - Idea generation:
New product idea can be generated either from the internal sources orexternal sources. The internal sources include employees of the organization and data collected from themarket. The external source includes customers, competitors and supply chain members. For example,Ingersoll Rand welcomes new ideas from the General public.
Stage 2-Idea screening:
Organization may have various ideas but it should find out which of these ideascanbe translated into concepts. In an interview to Times of India, Mr.Ratan Tata, chairman TATA groupdiscussed how his idea saw many changes from the basic version. He told that he wanted to develop carwith scooter engine, plastic doors etc… But when he unveiled the car, there were many changes in theproduct. This shows that initial idea will be changed on the basis of market requirements.
Stage 3 - Concept development:
the main feature or the specific desire that it caters to or the basicappeal of the product is created or designed in the concept development.Concepts used for Tata Nano car are -
Concept I: Low-end ‘rural car,’ probably without doors or windows and with plastic curtains that rolleddown, a four-wheel version of the auto-rickshaw
Concept II: A car made by engineering plastics and new materials, and using new technology likeaerospace adhesives instead of welding.
Concept III: Indigenous, in-house car which meets all the environment standards
Stage 4 - Concept testing:
At this stage concept is tested with the group of target customers. If anychanges are required in the concept or the message it will be done during this stage. Also theeffectiveness is tested on a minor scale. If the concept meets the specific requirements, then it willbeaccepted.
Stage 5 Marketing strategy development:
The marketing strategy development involves three parts. Thefirst part focuses on target market, sales, market share and profit goals.TATA’s initial business planconsisted sales of 2 lakhs cars per annum. The second part involves product price, distribution andmarketing budget strategies. TATA’s fixed Rs 1 lakhs as the car price, and finding self employedpersonswho work like agent to distribute the cars. The final part contains marketing mix strategy and profitgoals.
Stage 6 - Business analysis:
it is the analysis of sales, costs and profits estimated for a new product andto find out whether these align with the company mission and objectives
stage 7 - Product development:
during this stage, product is made to undergo further improvements,new features or improvised versions are added to the product. There is also scope for innovation andusing the latest technology into the product.
Q.2 Discuss the importance of SWOT analysis to develop effective marketing mix.
A.2 A tool used by organisations to help the firm establish its Strengths, Weaknesses, Opportunities and Threats (SWOT). A SWOT analysis is used as a framework to help the firm develop its overall corporate, marketing, or product strategies.
Note:Strengths and Weaknesses are internal factors which are controllable by the organisation. Opportunities & threats are external factors which are uncontrollable by the organisation.
Strength examples could include:
· A strong brand name.
· Market share.
· Good reputation.
· Expertise and skill.
Q.3 Briefly explain the major external and uncontrollable factors that influence an organization decision making, performance and strategies.
A. 3 Company’s Macro Environment :-
The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces.
Q.4 Discuss the potential benefits associated with MIS.
A. 4 1) Helps to recognise market trends: MIS helps managers to recognise market trends, in respect of price, designs of products, fashions, etc. timely information of the market trend enables the firm to follow the right course of action.
2) Facilitates marketing planning and control: effective marketing planning is required in terms of product planning, pricing, promotion and distribution. such planning will be possible only if the company is possessing adequate and relevant information. this is also possible through MIS.
3) Quick supply of information: today a firm has to take quick decisions. for this purpose it requires fast flow of information which is facilitated by a properly designed MIS.
4) Improves quality of decision making: a properly designed MIS supplies reliable and relevant information. with the help of computers and other data processing equipment, the marketing managers can make the right decisions at the right time.
Q.5 Describe five interdependent levels of basic human needs (motivators) as propounded by Abraham Maslow.
A. 5 There are five different levels in Maslow’s hierarchy of needs:
1) Physiological Needs
These include the most basic needs that are vital to survival, such as the need for water, air, food, and sleep. Maslow believed that these needs are the most basic and instinctive needs in the hierarchy because all needs become secondary until these physiological needs are met.
2) Security Needs
These include needs for safety and security. Security needs are important for survival, but they are not as demanding as the physiological needs. Examples of security needs include a desire for steady employment, health insurance, safe neighborhoods, and shelter from the environment.
3) Social Needs
These include needs for belonging, love, and affection. Maslow considered these needs to be less basic than physiological and security needs. Relationships such as friendships, romantic attachments, and families help fulfill this need for companionship and acceptance, as does involvement in social, community, or religious groups.
4) Esteem Needs
After the first three needs have been satisfied, esteem needs becomes increasingly important. These include the need for things that reflect on self-esteem, personal worth, social recognition, and accomplishment.
5) Self-actualizing Needs
This is the highest level of Maslow’s hierarchy of needs. Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested fulfilling their potential.
Q.6 List the important differences between Consumer market and business markets.
A. 6 1. Organizational consumers purchase capital equipment, raw materials, semifinished goods, and other products for use in further production or operations or for resale to others, whereas final consumers usually acquire the finished items for personal, family, or household use.
2. Organizational consumers are likely to require exact product specifications. Final consumers more often buy on the basis of description, style, and color.
3. Organizational consumers often use multiple-buying responsibility, in which two or more employees formally participate in complex or expensive purchase decisions. Final consumers employ it less frequently and less formally.
4. Derived demand occurs for organizational consumers because the quantity of items they purchase is often based on the anticipated demand of their final consumers for specific finished goods and services; therefore, organizational consumers are less sensitive to price changes. As long as final consumers are willing to pay higher prices, organizational consumers will not object to price increases.
5. Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels of organizational consumers.
6. There are fewer organizational consumers than final consumers.
7. Business market consumers tend to be geographically concentrated.
9. Distribution channels are shorter.
10. As with final consumers, there are many distinctions among organizational consumers around the world and sellers must understand and respond to them.
11. Companies doing business in foreign markets must know how to deal with organizational consumers in those markets.
12. Nations’ cultures have a large impact on the way their organizational consumers negotiate and reach decisions.
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