Essay About New-Product Development Process And Test Marketing

Accounting – Idea Generation
Chapter 9: Name and describe the major steps in the new-product development process.  (AACSB: Communication)Idea Generation is the systematic search for new-product ideas.Idea Screening is screening new-product ideas to spot good ideas and drop poor ones as soon as possibleConcept Development and Testing is product concept and concept testing. Product concept is a detailed version of the new-product idea stated in meaningful consumer terms. Concept testing is the testing of the new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.Marketing Strategy development is designing an initial marketing strategy for a new product based on the product conceptBusiness Analysis is a review of the sales, cost, and profit projections for a new product to find out whether these factors satisfy the company’s objectivesProduct Development is developing the product concept into a physical product to ensure that the product idea can be turned into a work able market offeringTest Marketing is the stage of new-product development in which the product and its proposed marketing program are tested in realistic market settingCommercialization is introducing a new product into the marketWhat is test marketing?  Explain why companies may or may not test market products and discuss alternatives to full test markets.  (AACSB: Communication)Test marketing is the stage at which the product and its proposed marketing program are introduced into realistic market settings. Test marketing gives the marketer experience with marketing a product before going to the great expense of full introduction. It lets the company test the product and its entire marketing program—targeting and positioning strategy, advertising, distribution, pricing, branding and packaging, and budget levels. The amount of test marketing needed varies with each new product. Test marketing costs can be high, and it takes time that may allow competitors to gain advantages. When the costs of developing and introducing the product are low, or when management is already confident about the new product, the company may do little or no test marketing. However, a company may do a lot of test marketing when introducing a new product requires a big investment, when the risks are high, or when management is not sure of the product or its marketing program. As an alternative to extensive and costly standard test markets, companies can use controlled test markets or simulated test markets. In controlled test markets, such as Symphony IRI’s Behavior Scan, new products and tactics are tested among controlled panels of shoppers and stores. By combining information on each test consumer’s purchases with consumer demographic and TV viewing information, Behavior Scan can provide store-by-store, week by-week reports on the sales of tested products and the impact of in-store and in-home marketing efforts. Using simulated test markets, researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments. Both controlled test markets and simulated test markets reduce the costs of test marketing and speed up the process.