Price, Distribution, Promotion, Products

What to produce, who to produce for, and how much to produce

Tangible goods to intangible services

Function, form, attributes, conditions, additional benefits, services, future development

Core benefits, benefits and services

A product mix is ​​a set of products that a seller sells to buyers, including all product lines and product items.

The product portfolio includes the following concepts: product items are specific products of different varieties, specifications, and qualities in the product category. Each specific variety listed in the enterprise product catalog is a product item. A product line is a collection of many product items. The reason why these product items form a product line is because these product items have similar functions, the same users, the same distribution channels, and connected consumption.

Product portfolio specifically refers to the combination of all product lines and product items produced and operated by the enterprise, that is, the width, depth, length and relevance of the product portfolio. The width of the product portfolio is the number of product lines produced and operated by the company.

For example, Procter & Gamble produces detergents, toothpaste, soap, diapers and paper towels and has 5 product lines, indicating a product portfolio width of 5. The length of the product portfolio is the sum of product items in all product lines of the enterprise. Product portfolio depth refers to the number of varieties of each product in the product line. For example, Procter & Gamble has three toothpaste product lines, one of which is Crest toothpaste. Crest toothpaste has three specifications and two formulas. The depth of Crest toothpaste is 6. Product relatedness is the degree to which product lines are related to each other in terms of end use, production conditions, distribution channels, and other aspects. The four dimensions of product portfolio provide a basis for companies to formulate product strategies.

The basic method for enterprises to carry out product mix is ​​the four dimensions of product mix, that is, increasing or decreasing the width, length, depth of product lines or the relevance of product lines. In order to make the enterprise's product portfolio reach the optimal state, that is, the qualitative combination and quantitative ratio of various product items can not only meet the needs of the market, but also maximize the company's profits, certain evaluation methods need to be used for selection. Evaluating and selecting the best product portfolio is not an easy task, and there are many options for criteria for evaluation.

From a marketing perspective, analysis is conducted based on several major indicators such as product sales growth rate, profit margin, and market share. Commonly used methods include ABC analysis, Boston Consulting Group method, General Electric Company method, product profitability evaluation method and critical income evaluation method.

The meaning of new products in the marketing sense is very broad. In addition to new products resulting from major discoveries in science and technology in a certain field, it also includes: in terms of production and sales, as long as the product changes in function or form, and If the original product is different, or even if the product enters a new market from the original market, it can be regarded as a new product; on the consumer side, it means that it can enter the market and provide new benefits or new utility to consumers and be consumed. products approved by the manufacturer. According to the product research and development process, new products can be divided into brand-new products, imitation new products, improved new products, series-forming new products, cost-reducing new products and repositioning new products.

Brand-new products refer to products that apply new principles, new technologies, and new materials, and have new structures and new functions. This new product is the first to be developed in the world and can create a whole new market. It accounts for about 10% of new products.

Improved new products refer to improvements on the basis of original old products, so that the products have new characteristics and new breakthroughs in structure, function, quality, color, style and packaging. The improved new products have a more reasonable structure. , with more complete functions and better quality, it can better meet the changing needs of consumers. It accounts for about 26% of new products.

Imitation new products are products produced by an enterprise that imitate products already on the domestic and foreign markets, and are called new products of the enterprise. Imitative new products account for about 20% of new products.

Forming a series of new products refers to developing new varieties, colors, specifications, etc. in the original product categories, thereby forming a series with the company's original products and expanding the product's target market. New products of this type account for about 26% of new products.

Cost-reduced new products are new products that provide the same performance at a lower cost. They mainly refer to new products that companies use new technologies to improve production processes or improve production efficiency to reduce the cost of the original product but keep the original functions unchanged. . The proportion of this new product is about 11%.

Repositioned new products refer to a company's old products that enter a new market and are called new products in that market. Such new products account for about 7% of all new products.

The types of new product development strategies are combined according to the dimensions of the new product strategy. The three dimensions of the product's competitive field, the goals of new product development, and the measures to achieve the goals constitute the new product strategy. Various new product development strategies are formed by combining various dimensions and various elements of the dimensions. Several typical new product development strategies are as follows:

Venture or entrepreneurial strategy. Risk-taking strategy is a high-risk new product strategy. It is usually implemented when a company faces huge market pressure. Companies often mobilize all their resources to develop new products in the hope that the greater the risk, the greater the reward. The product competition area of ​​this strategy is the combination of product end use and technology. Enterprises hope to have greater development in technology or even a technological breakthrough; the goal of new product development is to quickly increase market share and become the leader of the new product market. Leader; innovation hopes to be the first, or even an artistic breakthrough in the first; taking the first entry into the market as a launch opportunity; the source of innovative technology adopts independent development, joint development or technology introduction. Enterprises that implement this new product strategy must have leading technology, huge financial strength, and strong marketing and operation capabilities. Small and medium-sized enterprises are obviously not suitable for using this new product development strategy.

Aggressive strategy. The aggressive new product strategy is composed of the following elements: the competitive field lies in the final use and technology of the product, the goal of new product development is to enable the company to develop faster by increasing the market share of new products; the degree of innovation is high, The frequency is relatively fast; most new products enter the market first; the development method is usually independent development; new product development is carried out with certain corporate resources and will not affect the company's existing production status. New product creativity can come from the improvement of existing product uses, functions, processes, marketing strategies, etc. Improved new products, cost-reduced new products, series-forming new products, and repositioned new products can all be options. The development of new products with greater technological innovation is not ruled out. This new product strategy is relatively low risk.

Keep up with strategy. The follow-up strategy means that the company closely follows the powerful competitors in the industry and quickly imitates the new products that the competitors have successfully launched to maintain the survival and development of the company. Many small and medium-sized enterprises often adopt this new product development strategy at the beginning of their development. The characteristics of this strategy are: the strategic competition area of ​​the product is the product or the end use of the product selected by the competitor, and the company cannot and does not need to choose; the goal of the company's new product development is to maintain or increase market share; imitation of new products The degree of product innovation is not high; the timing of product entry into the market is flexible; development methods are mostly independent development or commissioned development; research and development costs that closely follow the strategy are small, but marketing risks are relatively high. The key to implementing this new product strategy is to promptly, comprehensively, quickly and accurately obtain competitors' information about new product development, which is the prerequisite for the success of the imitation new product development strategy; secondly, imitate improvements to competitors' new products. It will make its new products more competitive; strong marketing operations are the guarantee of this strategy.

Maintaining position or defensive strategy. To maintain or maintain the company's existing market position, companies with this strategic goal will choose the defensive strategy of new product development. The product competition area of ​​this strategy is new products on the market; the goal of new product development is to maintain or appropriately expand market share to maintain the survival of the enterprise; the imitative new product development model is mostly adopted; independent development is the main focus, but also Adopt technology introduction method; the timing of product entering the market is usually delayed; the frequency of new product development is not high; small and medium-sized enterprises in mature industries or sunset industries often adopt this strategy.

Innovation requires passion and avoids pure rationality; it requires decentralization and negates centralization; it requires more incentives and tolerance and abandons restrictions and punishments; it requires competition and avoids following rules. The characteristics of innovation determine that new product development organizations have outstanding characteristics compared with general management organizations. New product development organizations have a high degree of flexibility. New product development organizations must have simple interpersonal relationships, efficient and fast information transmission systems, Higher management power, sufficient decision-making autonomy, etc. The general principle is to enable new product development to proceed quickly and efficiently.

The characteristics of new product development organizations make new product development organizations take various forms. Generally common new product development organizations include five forms: new product committee, new product department, product manager, new product manager, project team, and project team.

New Products Committee. The new product development committee is one of the specialized new product development organizational forms. The committee is usually composed of the top management of the enterprise plus representatives of each major functional department. It is a high-level staff and management organization for new product development. Its advantage is that it can bring together the ideas and opinions of various departments, strengthen information communication, and make decision-making more democratic and scientific. The disadvantage is that the powers and responsibilities among committee members are unclear, and it is easy to pass the blame to each other. When the goals of each functional department are inconsistent with the overall goals of the enterprise, it is difficult to unify opinions. The new product development committee has a matrix organizational structure and can be divided into three types: decision-making type, coordination type and special type. The main functions of the decision-making new product committee are to formulate new product development strategies, allocate internal and external resources required for new product development, and evaluate and select new product development projects. Usually the top leader of the business takes the lead. The main function of the coordinating new product committee is to coordinate various functional departments in new product development activities. The Special Committee is a think tank for new product development and provides suggestions and countermeasures to problems and difficulties that arise during the development of new products. For example, technical obstacles, evaluation issues in concept screening, design issues, process issues, problems that arise during the commercialization process, etc. are composed of various experts and key figures from functional departments.

New Products Department. Large companies have permanent new product departments, also called product planning departments, technology centers or research institutes, etc. Special personnel are assigned from several functional departments to form a fixed and independent development organization to focus on handling various issues in the new product development process, such as proposing development goals and formulating market research plans, screening new product ideas, organizing and implementing control and coordination, etc. The head of the department has real authority and has close ties with top management. It is the most appropriate supplementary management organization to the new product committee. Its advantages are centralized power, centralized suggestions, and independent opinions. It helps the enterprise make decisions and maintain the stability of new product development work and the planning of management. The disadvantage is that it is difficult to coordinate conflicts between various functional departments.

Product Manager. Many companies regard new product development as an important function of product managers. However, the focus of the product manager's work is often to invest more time and energy in the products or product lines he manages, and he cannot do his best in the development of new products.

New Product Manager. In this organizational form, the company sets up several new product managers under the product manager according to the number of new product projects implemented. A new product manager is responsible for one or a group of new product projects. New product managers are responsible for everything from new product planning to new product launch into the market. This organizational form is mainly suitable for companies with larger scales, rich resources, and many new product projects, which mainly rely on new products to compete.

project team. Project teams are increasingly becoming one of the strongest horizontal linkage mechanisms. A team is a long-term task group, often used with project teams. When coordination of departmental activities is required over an extended period of time, setting up a cross-department team is a wise choice. For example, Boeing uses approximately 250 teams to design and produce its new 777 aircraft. Some teams are set up around aircraft components, such as wings, cabs, and engines, and corresponding teams are also formed to serve special customers.

Project team. Some companies will set up temporary project teams for irregular new product development. This is an organization composed of people from different functional departments. It is a matrix organizational form. It usually reports directly to the top management of the company. job and has the authority to set policy for new products. It works for an indefinite period until the task is completed. Different development projects have different members, but members often have strong innovative and pioneering spirits. The project manager is responsible for the entire new product development, but does not have formal authority over salary increases, promotions, hiring and firing of project team members. Formal authority rests with functional department managers. Project managers need excellent interpersonal skills to achieve collaboration through expertise and lobbying. They span departments and must be able to organize people.

A complete new product development process goes through 8 stages: idea generation, idea screening, concept development and testing, marketing planning, business analysis, product entity development, test marketing, and commercialization.

(1) Generation of new product ideas. New product ideation is the primary stage of new product development. Ideation is creative thinking, the process of envisioning or creating ideas for new products. The lack of good new product ideas has become a bottleneck in new product development in many industries. A good new product idea is the key to successful new product development. Companies can often look for sources of new product ideas both internally and externally. Internal personnel of the company include: research and development personnel, marketing personnel, senior managers and other department personnel. The degree of direct contact between these personnel and products varies, but what they have in common is that they are all familiar with one or more aspects of the company's business. They have more understanding and attention to the products provided by the company than outsiders, so they can often come up with ideas for improvement or innovative products based on the advantages and disadvantages of the products. External sources of ideas that companies can look for include: customers, middlemen, competitors, researchers and inventors outside the company, consulting companies, marketing research companies, etc.

(2) Idea screening. New product idea screening is a filtering process that uses appropriate evaluation systems and scientific evaluation methods to analyze and compare various ideas and select the most promising ideas. In this process, we strive to eliminate new product ideas that have the largest losses and those that are bound to make losses, and select new product ideas with high potential profits. The main approach to ideation screening is to build a series of evaluation models. Evaluation models generally include: evaluation factors, evaluation levels, weights and evaluators. Determining reasonable evaluation factors and assigning appropriate weights to each factor are the keys to whether the evaluation model is scientific.

(3) Development and testing of new product concepts. New product ideas are ideas for some possible new products that corporate innovators hope to provide to the market. New product ideas only point out the direction for new product development. New product ideas must be transformed into new product concepts to truly guide the development of new products. A new product concept is a detailed description of a company's product idea from a consumer's perspective. That is, the new product idea is made concrete, and the performance, specific use, shape, advantages, appearance, price, name, and benefits provided to consumers are described, so that consumers can clearly identify the characteristics of the new product at a glance. Because consumers are not buying new product ideas; The process of new product concept formation is to transform rough product ideas into detailed product concepts. Any product idea can be transformed into several product concepts. The formation of new product concepts comes from the answers to questions raised about new product ideas. Generally, different new product concepts can be formed by answering the following three questions. That is, who uses the product? What are the main benefits provided by this product? What occasions is this product suitable for?

(4) Formulate a marketing strategic plan. Formulating a marketing strategy plan for a new product concept that has been formed is an important stage in the new product development process. The plan will be continuously refined in subsequent development phases. The marketing strategic plan includes three parts: The first part describes the size, structure and consumer behavior of the target market, the positioning of new products in the target market, market share, and sales and profit targets in previous years. The second part is to plan the new product's price strategy, distribution strategy and first-year marketing budget. The third part describes expected long-term sales and profit targets and the marketing mix for different periods.

(5) Business analysis. The main content of business analysis is to conduct financial analysis of new product concepts, that is, estimate sales volume, costs and profits, and determine whether it meets the company's goal of opening new products.

(6) Product entity development. New product entity development mainly solves the problem of whether product ideas can be transformed into technically and commercially feasible products. It is completed through the design, trial production, testing and qualification of new product entities. According to a survey by the National Science Foundation, the investment and time required for the product physical development stage in the new product development process account for 30% of the total development costs and 40% of the total time respectively, and the technical requirements are very high, making it the most challenging a stage.

(7) Test marketing of new products. The purpose of the new product market test is the last test before the new product is officially launched, and the evaluator of this test is the monetary vote of consumers. Through market trials, companies can truly understand the market prospects of the new product by launching the new product into a small target market in a representative area for testing. Market trial marketing is a comprehensive inspection of new products. It can provide a comprehensive and systematic decision-making basis for whether new products are fully launched. It also provides inspiration for the improvement of new products and the perfection of marketing strategies. Many new products are improved after trial marketing. Be successful. The primary issue in market test marketing of new products is to decide whether to test market them. Not all new products must go through test sales. The decision can be made based on the characteristics of the new product and the analysis of the pros and cons of the new product during the test market. If you decide to test market, the next step is to select the test market. The selected test market should be as close as possible to the target market where the new product will eventually enter in terms of advertising, distribution, competition and product use. The third step is the selection of test marketing techniques. Commonly used consumer product test marketing techniques include: sales wave testing, simulation testing, controlled test marketing and test market test marketing. Common test marketing methods for industrial products are product usage tests or the introduction of new products through trade exhibitions. Controlling the test marketing process of new products is the fourth step. Controlling the promotional publicity effect, test marketing costs, test marketing plan goals and test marketing time are the key points that test marketers must grasp. The last step is the collection and analysis of test marketing information. For example, consumers' trial rate and repurchase rate, competitors' response to new products, consumers' response to new product performance, packaging, price, distribution channels, promotion occurrence, etc.

(8) Commercialization. In marketing operations during the commercialization stage of new products, companies should make careful decisions in the following aspects: when to launch new products. There are three timing options for competitors' products. That is, first entry, parallel entry and late entry; where to launch new products; how to launch new products. Enterprises must formulate detailed marketing plans for new product launches, including marketing mix strategies, marketing budgets, organization and control of marketing activities, etc.

The new product adoption process is any process by which potential consumers recognize, try out, and adopt or reject a new product. There are five stages to develop from potential consumers to adopters: awareness, interest, evaluation, trial, and formal adoption. Marketers should carefully study the different characteristics of each stage and adopt corresponding marketing strategies to guide consumers to complete the intermediate stages of the adoption process as quickly as possible. There are five types of adopters of new products: innovators, early adopters, early majority, late majority and laggards. The main reason for the speed of new product promotion depends on the target market consumers and the characteristics of the new product. The different value orientations of the five types of adopters lead to their different attitudes towards new products, which plays an important role in the speed of adoption and promotion of new products. The relative advantages, compatibility, complexity, trialability and dissemination of new products will significantly affect the adoption and promotion of new products.

The whole process of a product from being put into the market to finally exiting the market is called the product life cycle. This process generally goes through four stages: the product introduction period, the growth period, the maturity period and the decline period. At different stages of the product life cycle, the market share, sales, and profits of the product are different. During the introduction period, product sales grew slowly and profits were mostly negative. When sales grow rapidly and profits turn from negative to positive and then rise rapidly, the product enters the growth stage. After rapid growth, sales volume has gradually stabilized and profit growth has stagnated, indicating that the product has reached maturity. In the later stages of maturity, product sales slowly decline and profits begin to decline. When sales volume declines at an accelerated pace and profits decline rapidly, the product enters a period of decline.

Product life cycle forms can be divided into typical and atypical. A typical product life cycle goes through the introduction period, growth period, maturity period and decline period, showing an S-shaped curve. Atypical forms include "circulation-recirculation" type, "fan type", "non-circulation type", etc. Studying the product life cycle is of great significance to corporate marketing activities.

The introduction period is the initial sales period when a new product is officially launched for the first time. Only a few innovators and early adopters purchase the product, sales volume is small, promotion expenses and manufacturing costs are high, and competition is not too fierce. The guiding ideology of corporate marketing strategies at this stage is to direct sales efforts to the most likely buyers, that is, innovators and early adopters of new products, so that these two types of leading consumers can accelerate the diffusion of new products. , shorten the introduction period. The specific marketing strategies that can be selected are: fast skimming strategy, that is, high price and high intensity promotion; slow skimming strategy, that is, high price and low intensity promotion; fast penetration strategy, that is, low price and high intensity promotion; slow penetration strategy, that is, low price and low intensity promotion. The performance of products in the growth stage is basically stable, most consumers are familiar with the product, sales volume is growing rapidly, competitors continue to enter, and market competition intensifies. In order to maintain their market growth rate, companies can adopt the following strategies: improve and perfect products; seek new market segments; change the focus of advertising; timely price reductions, etc. The marketing strategy in the mature period should be proactive in order to extend the maturity period of the product as much as possible. The specific strategies are: market improvement strategy, which is to expand the sales volume of the product by developing new uses for the product and finding new users; product improvement strategy, which is to expand the sales volume of the product through Improve product quality, increase product functionality, improve product styles and packaging, and provide new services to attract consumers. For products in decline, companies can choose the following marketing strategies: maintenance strategy; transfer strategy; shrinkage strategy; abandonment strategy.

Whether a product uses a brand is the primary question to be answered in brand decision-making. Brands have many benefits for enterprises, but the costs and responsibilities of establishing a brand cannot be ignored. Therefore, not all products must use brands. For example, raw material products that are difficult to distinguish on the market, real estate, small commodities sold locally, or products that consumers do not decide to buy based on the product brand do not need to use the brand. Second, if a company decides to use a brand, it will face the decision of using its own brand or someone else's brand, such as using a licensed brand or an intermediary brand. For enterprises with strong strength, excellent production technology and excellent management level, they generally use their own brands. The advantages and disadvantages of using other companies' brands are very prominent, and decisions must be made in conjunction with the company's development strategy. Third, use one brand or multiple brands. For the selection of different product lines or different product brands under the same product line, there are four strategies: individual brand strategy, that is, the company uses different brands on different product lines; single brand strategy, all the company's products use the same brand; Similar unified brand strategy, that is, using the same brand for products in the same product line, and different brands for different product lines; parallel strategy of corporate name and individual brands, using different brands on different products, but each brand is preceded by the corporate name The name.

Brand extension is when a company applies an influential brand to products that are different from the original product. Brand extension can not only greatly reduce advertising and other promotional costs, but also make new products more easily accepted by consumers. If this strategy is used properly, it will help the development of the company. But the risk of brand extension is greater. For example, IBM and Bondi in the United States have experienced failures in brand extension. Improper brand extension will also affect the image of the original brand.

similar packaging

grade packaging

Matching packaging

gift packaging