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CLEP Principles of Marketing Study Notes

The screening stage is where most new product ideas

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The screening stage is where most new product ideas are eliminated--it usually involves just going through a checklist and checking the company's overall ability to produce and market the product. 3. Business Analysis - product idea is evaluated to determine its potential contribution to the firm's sales, costs, and profits. More in-depth, and looks into the products commercial feasibility--how strong are the competitors, what kind of demand and profit potential is there, etc. 4. Product Development - where ideas are first produced in tangible form. Idea or concept is converted into a prototype , or working model. It is near the end of this stage that marketers begin to make decisions regarding branding, packaging, pricing, and promotion for use in the next stage--the test marketing phase. 5. Test Marketing and Commercialization – (test marketing) where the company makes a limited introduction of a product in geographic areas chosen to represent the intended market. It tests actual customer reaction to the product, as well as allows the firm to experiment with variations in advertising, price, and packaging. (commercialization) - where plans for full-scale manufacturing and marketing are settled and implemented. Occurs if the Test Marketing stage had the desired results. This stage corresponds to the Introductory stage of the Product Life Cycle for the product. Sample launching - of the entire marketing mix occurs in the Test Marketing phase of the new-product development process, and is the final step before Commercialization. (Sometimes, commercialization is listed as a sixth step instead of being combined with test marketing .)
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Price fixing - an illegal practice involving an agreement between competitors regarding price. Price fixing is illegal, and practically any agreement regarding price between competitors is considered price fixing. The biggest form of price fixing involves one or more competitors agreeing to set a specific price for a certain product or service. This is different from price discrimination ( exists when sales of identical goods or services are transacted at different prices from the same provider )--many forms of price discrimination are legal, depending on the basis for the discrimination. Focus groups - small groups of consumers who are brought together under the direction of a moderator while researchers record their observations, comments, and reactions. Used to collect consumer feedback on new product development, pricing, branding and other issues. Participants are typically paid for their time. Internet focus group -uniquely attractive when the subject is evaluating Web sites or Internet software . Allow for the discussion of specialized subjects as each participant has his or her computer to view technical diagrams and descriptions. As with traditional focus groups, Internet focus groups, feature a moderator who is in control of the session, using a predetermined set of questions.
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