CU-BSC.TTM-SEM-IV-B2B Marketing

4.3 Analysing the interest of the buyer 2. Retention of the customers: The major reason for understanding the interest and likes of the consumer is to retain the customer, avoiding them to prefer other products. It is one of the most crucial processes in marketing as everyday people come up with different products with different features. So, only when the customer is happy with the product and the approach, they experience from the brand can they stick with it for a longer term. It also leads them to purchase again and again. In order to retain the customer, the marketer must ensure they get excitement and satisfaction on the approach. Figure 4.4 Retaining the Customer 3. Relevant marketing campaign: Understanding the buying behaviour helps the marketers to create effective marketing campaigns that are relevant to different groups respectively. If it is done with random trends or only with some random common factor the campaign might not attract the maximum crowd. Only when the marketers understand the motivation of the buyers on the product, they 51 CU IDOL SELF LEARNING MATERIAL (SLM)

will be able to design an approach accordingly. Even the promotional activities, discounts, logos can be constructed with the understanding of customer’s interest. Figure 4.5 Marketing Campaign 4. Forecasting marketing trends: On studying the consumer behaviour pattern, the obvious change of trends can be understood. So that the marketers will also be able to predict the future trend in the market and the behaviour pattern of the consumer. On understanding the trends, the marketers will be able to act accordingly from introducing a product or adding any additional features or to approach the market for renewal or to repurchase. Without understanding the trend, the organization might build an irrelevant product which is not suitable for the market. Figure 4.6 Marketing trends 5. Competition: This is one of the most important factors for the marketers to study consumer behaviour. With the help of the study on the consumer’s behaviour, an organization will be able to understand their strength and also their competitors’ strengths. It also gives answers like ● How many are buying from the competitor? ● Why are they preferring competitors? ● Do competitors have any additional features? 52 CU IDOL SELF LEARNING MATERIAL (SLM)

● What are all the factors that competitors work on to create interest? On understanding the above factors, it helps the organization to concentrate on the areas where they need to act on and improve, and attract the consumer towards them. Figure 4.7 Competitors 6. New product development: It is studies that every time a new product is introduced to the market, it fails with the rate of 30% to 90% depending upon the industry. Though the organizations work on several factors to make the product successful the understanding of the buying behavior will help them to be more successful as the behavior pattern is exactly nearer to the desire of the customers. Figure 4.8 Product Development 7. Sustain in the market: It is necessary for an organization to compete with the trends in respect of the technology, improvement, interest, etc., the trend of the consumers will also change, which is why this subject is known to be ever changing behaviour of consumers. That too in the 21st century there are a lot of options and opportunities for the consumers to switch products easily when they keep on comparing things, so to stand strong and defend the competitors understanding the behaviour of the consumer is very much needed. 53 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 4.9 Sustain in Market 8. Customer service: Customer service has become one of the major concerns of the consumers, as they require additional benefits from the companies, they purchase the product or service from. Moreover, it helps the customer to have a personal relationship with the brand knowing the actual behaviour of the company and vice versa. 4.10Customer Service 4.3 NATURE OF BUSINESS BUYING 4.3.1 Business Buyers Business buyers are not similar to that of the consumer buyers, usually the decision-making process involves more individuals, and usually many organizations would have a team called procurement team or purchasing agent for making a purchase, who makes the efforts on moving through the organization’s process for deciding and for negotiation. 54 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 4.11 Business Buyer Every organization has its own rules or procedure to purchase or to decide which is termed as policies, process and system to make sure that the right people have oversight and decide. There are more levels to consider, review and approval which are required for expensive purchase. For B2B business it is necessary for anyone to know the process or the procedure followed in the organization for making the purchase. ● People involved in buying process ● The criteria to evaluate the product ● The decision-making people ● The psychological factor ● Their strength as group ● The final decision depends on which person As discussed earlier, the nature of the deciding process is completely different so every time the marketer reaches any other organization all of the above factors must be read. 4.3.2 Stages in buying behaviour Throughout the subject, it is very clear that Business to Business consumer is completely different from Business to Consumer’s consumer. Here the buying behaviour process of Business consumers is different from consumer buying behaviour. This is because the concept of the business market is involved in it with certain demands and characteristics. Though each organization follows different procedure there are certain common factor that business buyers concentrate more on they are, Business market: This is a basic factor that had to be understood by both the seller and the consumer in B2B. This helps them to understand the real time trend and improvements happening in their particular market and decide what is in the demand and what suits better to grow their business. This factor is very basic and also similar to consumer demand. 55 CU IDOL SELF LEARNING MATERIAL (SLM)

Buying situation: There are three types of situations in buying situation, they are- ● Straight Repurchase: Here the previously purchased order made by the business gets to be repurchased again without any modification. ● Modified Repurchase: Here, there happened to create the need to have modifications from previous orders made which will be more on product specification, price or items etc. This involves more participants in the decision-making process. ● New Purchase: Usually it is something when the business buys a product or the services for the first time. 4.3.3 Participants of Business Buying Process As learnt, that business buying process involves multiple individuals in the organization, here we can study about who are all involved with what kind of attitude they approach a product or service from the sellers. This might also be different on the basis of characteristics of the product or service or the organization. ● Initiators: This is someone who recognizes or researches the need of any product or service requirement in an organization to enhance their business or work flow. ● Users: They are the one, who is going to adapt the product or the services as per the requirement for the functioning of the operation in a smooth manner. ● Influencers: It has different levels and also the decisions that are made from influencers might be different from person to person or post to post. Influencers are someone who influences the decision of making a purchase in respect to the product or from where the product can be consumed, and price analysis. ● Deciders: Usually the people at the top of the hierarchy or someone who have the expertise on products decides if they could buy the product or services, ● Approvers: The one who approves the decision made by the deciders to purchase the product or the services. ● Buyers: They check the feasibility, or any buffer in the service, they are the one who actually purchases from other businesses. 56 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 4.12 Business Buying Process 4.3.4 Steps involved in Business Buying Process The process of buying in business usually involves the following 8 stages. In which the category of straight or modified repurchase may skip some of the stages. Figure 4.13 Buying Process 57 ● Problem Recognition ● Description of General Need CU IDOL SELF LEARNING MATERIAL (SLM)

● Specification of the Product ● Search of the Suppliers ● Proposal Solicitation ● Selection of Suppliers ● Order Routine Specification ● PerformanceReview Problem recognition: This is the first stage of the process, here a certain problem is involved. This stage can be done on purpose or just by realization or by market research. And they realize the problem can be solved with a product or service that has to be purchased. To realize the problem, the external or internal environment stands as responsible. Description of general need: Once the need is identified, the detailed description will be made as a document to make the organization understand why that is important. It also shows the characteristics and the demand quantity. The work involves the complexity depending upon the need, it can be simple or complex. Here the significance of price, reliability, durability and other features are considered. Specification of the product: Here a detailed list is prepared for the specification, technically which has been the result of value analysis conducted by the specific team in an organization. Here they carefully study the cost reduction production process. Especially for standardizing or redesigning the product or a service. Search of the suppliers: This is the stage where the organization starts looking out for the suppliers and analyses them due purchase the best. With the help of supplier directories or the internet or contacting other organizations, a list is being prepared by the organization. Usually, organizations spend more time searching for suppliers. Proposal solicitation: Here the suppliers are asked to work on the quote and submit the proposals. Organization likes to hear the proposal in different manner which are like presentations, via salesperson, catalogue, reviews etc. This helps the organization to understand better about the product. Selection of suppliers: This is the stage where among the list of suppliers, one supplier will be finalized. This happened after considering and verifying all the suppliers. Following is some of the main attributes for selecting the potential suppliers. 58 CU IDOL SELF LEARNING MATERIAL (SLM)

● Quality of Product ● Delivery Time ● Ethical corporate behaviour ● Reasonable price ● Honest communication ● Past performance and reputation ● Repair & Service etc., Order routine specification: The specifications for order routine are being prepared at this stage. That is the detailed documentation of the supplier selected, delivery time, quantity required, price and repair, service and etc., Performance review: This is the final stage of the purchase process where the supplier's performance is reviewed by the organization. Here the organization contacts the customer as well as the users of the product or service that has to be purchased. The basic of reviewing the profile is with the product performance and also the customer services they provide. This helps to move the decision further. 4.4 INTERPERSONAL DYNAMICS OF ORGANIZATIONAL BUYING BEHAVIOR This is an area where the organization has to work on to understand the problem that might arise. Interpersonal dynamics is something between the people of the organization will get affected due to the choice the centre makes. Apart from the stages and steps involved in purchasing panther there are some other shadow factors involved. Since in buying process in business there are more people involved with multiple exposure, so the process of making decision with collective ideas are very difficult as the majority of the decision-making situation involves the following types ● Joint decision making ● Interaction Patter ○ Vertical Involvement ○ Lateral Involvement ○ Extensity ○ Connectedness 59 CU IDOL SELF LEARNING MATERIAL (SLM)

● Purchase situation influence ● Organization Influence. Psychological Factors influencing Individual Decision Making ● Difference in Roles ● Difference in information exposure ● Risk in Vendor selection Strategies to overcome the above factors ● Gather as many information as possible ● Use more analysis ● Work on risk case studies When the result is given as proof the difference in opinions might get eliminated. 4.5 SUMMARY ● The B2B market has a unique pattern of buying behaviour and also decision making is more complex and dynamics that are very important to understand. ● Differentiating the consumer of any business is very much necessary, this helps to make a target group of the consumer with similar behaviour. ● The major reason for understanding the interest and likes of the consumer is to retain the customer, avoiding them to prefer other products. ● Understanding the buying behaviour helps the marketers to create effective marketing campaigns that are relevant to different groups respectively. ● On studying the consumer behaviour pattern, the obvious change of trends can be understood. 4.6 KEYWORD ● Buying Behaviour:Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services, and how the consumer's emotions, attitudes and preferences affect buying behaviour. ● Business buyers: A business buyer is one who engages in the purchase or acquisition of a part or the entire business organization. ... They are responsible for the buying raw materials done for the company which are used for business processes and for making the final products. 60 CU IDOL SELF LEARNING MATERIAL (SLM)

● Customer service: Customer service is the provision of service to customers before, during, and after a purchase. The perception of success of such interactions is dependent on employees \"who can adjust themselves to the personality of the guest\". ● Decision Makers: Decision-makers are people within a company who have the power to make strategic decisions like acquisitions, expansion, or investment. 4.7LEARNING ACTIVITY 1. Visit a mall/ shop and try to observe and understand the buying behaviour stages and write an assignment on it. ___________________________________________________________________________ ___________________________________________________________________________ 2. Why does some marketing campaigns does not work for specific group of customers and suggest some alternatives. ___________________________________________________________________________ ___________________________________________________________________________ 3. Have a Group Discussion on how Healthy competition can make a company sustain in the market. ___________________________________________________________________________ ___________________________________________________________________________ 4. Discuss how pre conceived notions of the participants affect the Business Buying Process. ___________________________________________________________________________ ___________________________________________________________________________ 5. Give a B2B problem recognition to your friend and listen to how he would solve it. ___________________________________________________________________________ ___________________________________________________________________________ 4.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is Buyingbehaviour? 61 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Who are business buyers? 3. Who are all the participants of the Buying Process? 4. What are the process involved in buying behaviour? 5. What are the three types of situations in Buying? Long Questions 1. Why is understanding of Buying behaviour important? 2. Explain the stages in Buying Behaviour 3. What are all the steps involved in the Buying process? 4. Explain the participants involved in buying process. 5. What are various types in Decision Making Situation? 6. What steps could be taken for increasing Customer Retention and Customer Loyalty for a company? B. Multiple Choice Questions 1. _________ helps the customer to have a personal relationship with the brand knowing the actual behaviour of the company and vice versa. a. Sales b. Customer Service c. Marketing d. Research 2. ______________ helps to make a target group of the consumer with similar behaviour a. Research b. Customer Service c. Buying Behaviour d. Targeting 3. Every organization has ________ rules or procedure to purchase or to decide a. Same b. Different c. Multiple d. No 4. _____________ is a basic factor that had to be understood by both the seller and the consumer in B2B. a. Business market b. Buying situation 62 CU IDOL SELF LEARNING MATERIAL (SLM)

c. Behaviour Pattern d. Trends 5. _____________ is an area where the organization has to work on to understand the problem that might arise. a. Marketing b. Interpersonal dynamics c. Sales d. Customer Service Answers 1-b, 2-a, 3-c, 4-a, 5-b 4.9 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481-486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 63 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-5 NEW PRODUCT DEVELOPMENT STRUCTURE 5.0 Learning Objectives 5.1 New Product Development 5.2 Developing Product Strategy 5.3 Strategic Innovation and New Product Development 5.4 Summary 5.5 Keywords 5.6 Learning Activity 5.7 Unit End Questions 5.8 References 5.0 LEARNING OBJECTIVES After studying this unit, you should be able to ● Understand how a new product is developed ● Evaluate the marketing strategy of new product ● Determine the factors influencing new products. 5.1 NEW PRODUCT DEVELOPMENT In today's world the “wants and needs” are changing then and there as a new product gets into the market which is more feasible, technology and ease compared to the previous product used. The process involved in creating a new product is not that easy as it needs to convince the consumer that it is something better than what they have been using and why to shift product. New product development is the process of bringing an original product idea to market. New product development (NPD) covers the complete process of bringing a new product to market, renewing a product that is already in existence or bringing a product in a new market. The chief aspect of New Product Development is designing of product, along with various business considerations. New product development can be explained as the transformation of a market opportunity into a product available for sale. New Product Development generally follows the product development process. For the process to gel there need to be proper coordination among the internal teams of the organisation as every team has their own contribution. Starting from the research and marketing team, finance and purchasing team, sales and marketing, operation team and other departments. 64 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.1 Product Development Process Generally new product is classified into 4 categories they are; ● Major Innovation: These products are completely new to the market. Here the risk factor is high as the potential customer will have less knowledge on it. ● Product Improvement: This focuses the existing customers to give them a better and improved product experience. ● Product Additions: These products claim for new features, benefits, that will be an add on with the existing product. ● Repositioned Products: This is to attract different types of customers. Here the product is the same, but they are marketed in different ways. 5.2 DEVELOPING PRODUCT STRATEGY Product development strategy is one of the main forms of corporate strategy, and basically all product strategies focus on new product development strategy. It sets the direction for new products by establishing goals and through funding decisions. The aim of product development strategy is to gain competitive advantage by placing product offerings in the best possible position to drive business goals such as sales growth, revenue, or profits. 65 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.2 Product Strategy New product development strategy is the means to reduce the risk in sourcing a product concept, to increase the opportunity to fit between products and demand in the market, to complete a product line, and to improve the sales of products that are existing by improving it (with an emphasis on novelty). Although market research and marketing strategy are necessary in most cases, there are other inputs to business strategy to convert it to a fully formed product strategy - such as brand, platforms, technology, etc. Product development strategy enables product organizations to create a stream of innovative offerings that disrupt the competition and delight customers. Product development involves the entire process of introducing a product to the market. The process can include ● Identifying a product concept, ● Seeking market feedback about the idea, ● Creating a prototype, ● Preparing marketing and sales campaigns, ● Building the product and releasing it to customers, and ● Making adjustments based on market feedback. 66 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.3 Product Development Product development strategies are not something which is like a template, it differs by company, industry, and other external and internal factors. There is no one-size-fits-all approach that works every time or even in similar circumstances. But there are some common factors that will help for successful product development strategies. The Design Thinking Approach: 1. Empathize with users 2. Define the problem 3. Brainstorm potential solutions 4. Build a prototype 5. Test your solution 67 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.4 Design thinking Design thinking is a design methodology used to solve human-related problems. Contrary to what you might think, it is not about making a brand or a product look trendy in the eyes of the audience. Instead, it is a systematic approach to problem-solving that allows marketers to come up with new and exciting ideas that speak to customers. Design thinking goes beyond the traditional business models and focuses on customer empathy and real-world experiments. Design thinking empowers marketers to generate quality marketing strategies that will be successful by getting the right content in front of the right sets of eyes. So, whether you are marketing a local business or specific services, it is important to explore and create ideas that better cater to the consumers’ requirements and desires. Importance of Design Thinking for Marketers Let us see what are the traits that marketing professionals exhibit in their profession and how design thinking comes into play to enhance their productivity and efficiency. The User-Perspective While talking about user-perspective, we simply assume that going ahead with the knowledge of what the users want would suffice to serve them well. It is important to comprehend that users might not always be aware of their own needs due to the limited knowledge of possibilities and viability. In situations like these, traditional research methods like surveys and focus groups stand ineffective. The key to customer success is to step into their shoes to come up with the best possible solution while keeping in mind the technology insights to make those solutions possible. 68 CU IDOL SELF LEARNING MATERIAL (SLM)

When it comes to Design Thinking, empathy is the key. The approach is to think and feel the way consumers do, to understand their pain points. Then, consider these pain points along with their scope and magnitude to develop solutions. The Iterative approach Always being in ‘constant beta’ marketers could easily adapt to the concepts and methodology of design thinking. Traditionally, market research was the basis to validate ideas and propose best-fit solutions. Today, with Design Thinking, the way forward is for various stakeholders to be involved in designing ideas, rather than just validating them with the existing research. The problem is defined and solutions are arrived at jointly through collaboration. All this is achieved by incremental and iterative prototyping which involves converting ideas and concepts to products, services, or solutions. The final results are then again tested, iterated, and refined. Collaboration and Teamwork Effective marketing depends on collaborative teamwork. Even in traditional methods of marketing, brainstorming, which is a group initiative, has always played a key role. Design Thinking expands the scope of collective effort and tends to involve professionals across verticals to drive marketing initiatives. Collaboration is a key principle under Design Thinking. It is a process-oriented approach towards problem-solving and is based on interactions as opposed to just cooperation, which is more goal-oriented. In Design Thinking, the concept of sole innovator is a myth. Apply Design Thinking in Marketing The role of CMOs is shifting from just business growth to business innovation. It takes conviction and courage to make bold decisions for disruptive innovation and Design Thinking helps marketing leaders to drive successful innovations to deliver real customer value. When applying Design Thinking to marketing processes, it is necessary to blur the lines between product teams, marketing, sales, and digital technology, along with using the right tools with the right mindset. When the goals are clear, and the process is led by Design Thinking, then the marketing initiatives are bound to be successful and drive significant business innovations. This is how marketers can apply Design Thinking to their operations: Formulate the Problem Statement Traditionally, the focus of marketers has been towards developing new product features to acquire and retain customers. In this process, most of the time the focus shifts off the problem we are trying to solve with that product. Design Thinking addresses this issue with the concept of ‘empathy’. This essentially requires marketers to ditch the old methods of 69 CU IDOL SELF LEARNING MATERIAL (SLM)

consumer survey and focus groups, and rather directly engage with customers and frontline teams. Here are some of the ways to understand consumer pain-points and define problem statements to be solved for ultimate customer value: The human-first approach: Leverage Design Thinking tools such as buyer personas, customer journey maps, and empathy mapping to understand consumer pain points. Once the challenges and opportunities are identified, prioritise resources and budgets to drive valuable customer experience. Channel the internal creativity Creativity is crucial in Design Thinking. Building these capabilities in-house brings in the required agility to devise possible and creative solutions to human problems. It also helps in exploring the possibilities in emerging technologies and data. Build a cross-functional team for ideation and inspiration: Assembling a team from diverse backgrounds and experience is a key principle of Design Thinking. A typical team will only come up with typical solutions to the problem at hand. On the other hand, a team with a mix of different perspectives, expertise, and approach will produce extraordinary results. Don’t shy away from experimentation Design Thinking preaches the concept that ideas are free and hence the goal of marketers should be to break these ideas to find problems, iterate and improve. A substantial amount of time is saved while ideation and teams can quickly move ahead into the test phase. Once a substantial number of iterations are performed, teams can go to market with pilots, beta offerings and soft launches. Be ready for the feedback: Allowing the consumers to interact with your offering or solution is the best way to garner accurate feedback. Based on the expertise of each individual member of the cross-functional team, they will interpret the feedback and insights differently. This will open up further scope to improve your offering based on different perspectives, and this is the key factor in providing the best customer experience. 5.2.1 Stages of Product Development Product development includes all factors of creating innovation, thinking of a concept to deliver the product to customers. On making some modification to an existing product to create new interest, there are some stages to verify the success potential of the changes for generating business. The seven stages of product development are: 70 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.5 Product Development 1. Idea development: It involves streamlining and brainstorming for new products or services and the ways to make existing products more relevant. 2. Editing and selection: At this stage, the product development management group would determine which ideas have the most potential to do well in the market. It helps to eliminate the irrelevant ideas for the market. 3. Prototype creation: 71 CU IDOL SELF LEARNING MATERIAL (SLM)

After the idea has been selected, the company can create a prototype or draft version of its proposed product. This prototype can be used to determine if the product functions as intended and appeals to your target audience. 4. Analysis: At the analysis stage of product development, the company studies market research and evaluates the possible problems with the product. 5. Product creation: After incorporating notes from the analysis into the prototype, the finished product can be created. 6. Market testing: Before releasing the product to a wider audience, products are often released to a smaller market or focus group. The market testing phase includes evaluating customer feedback and the effectiveness of the product's marketing. 7. Commercialization: The final stage of product development occurs when adjustments are made based on market testing and the product is released to the full market. 5.3 STRATEGIC INNOVATION AND NEW PRODUCT DEVELOPMENT Strategic innovation is an organization's process of reinventing or redesigning its corporate strategy to drive business growth, generate value for the company and its customers, and create competitive advantage. This type of innovation is essential for organizations to adapt to the speed of technology change. Companies employing strategic innovation do not necessarily need to make changes to the goods and services they sell to their customers, nor to the technologies that support these products, to be successful. Strategic innovation often refers to innovation projects that occur at the executive level. Strategic innovation considerations Innovating corporate strategies could include the following considerations: what services or products need to be reinvented or developed; what markets to compete in; what business models to develop; how to optimize business processes; how to expand the customer base; how to position the company's brand in relation to target customers; how to make the supply chain and value chain more efficient; and go-to-market strategy. Executing strategic innovation processes 72 CU IDOL SELF LEARNING MATERIAL (SLM)

Although strategic innovation initiatives are led by senior leaders, they need to foster a culture of innovation that encourages collaboration across business teams and functions. Despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy. A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviours aimed at achieving a specific competitive goal. Good strategies promote alignment among diverse groups within an organization, clarify objectives and priorities, and help focus efforts around them. Companies regularly define their overall business strategy (their scope and positioning) and specify how various functions—such as marketing, operations, finance, and R&D—will support it. But during my more than two decades studying and consulting for companies in a broad range of industries, I have found that firms rarely articulate strategies to align their innovation efforts with their business strategies. Without an innovation strategy, innovation improvement efforts can easily become a grab bag of much-touted best practices: dividing R&D into decentralized autonomous teams, spawning internal entrepreneurial ventures, setting up corporate venture-capital arms, pursuing external alliances, embracing open innovation and crowdsourcing, collaborating with customers, and implementing rapid prototyping, to name just a few. There is nothing wrong with any of those practices per se. The problem is that an organization’s capacity for innovation stems from an innovation system: a coherent set of interdependent processes and structures that dictates how the company searches for novel problems and solutions, synthesizes ideas into a business concept and product designs, and selects which projects get funded. Individual best practices involve trade-offs. And adopting a specific practice generally requires a host of complementary changes to the rest of the organization’s innovation system. A company without an innovation strategy won’t be able to make trade- off decisions and choose all the elements of the innovation system. 73 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 5.6 Innovation Aping someone else’s system is not the answer. There is no one system that fits all companies equally well or works under all circumstances. There is nothing wrong, of course, with learning from others, but it is a mistake to believe that what works for, say, Apple (today’s favourite innovator) is going to work for your organization. An explicit innovation strategy helps you design a system to match your specific competitive needs. Finally, without an innovation strategy, different parts of an organization can easily wind up pursuing conflicting priorities—even if there’s a clear business strategy. Sales representatives hear daily about the pressing needs of the biggest customers. Marketing may see opportunities to leverage the brand through complementary products or to expand market share through new distribution channels. Business unit heads are focused on their target markets and their particular P&L pressures. R&D scientists and engineers tend to see opportunities in new technologies. Diverse perspectives are critical to successful innovation. But without a strategy to integrate and align those perspectives around common priorities, the power of diversity is blunted or, worse, becomes self-defeating. Innovation in New Product Development: According to Business Dictionary, “product innovation” is defined as “the development and market introduction of a new, redesigned, or substantially improved good or service.” It’s not only about developing something new and original; it’s also about taking what’s already there and making it much better. In other words, not everyone has to be the first to invent driverless cars, but someone has to be the first to make them better. Importance Product innovation is a challenge no matter what industry you’re in. The road is fraught with detours and roadblocks. The crash-and-burn stories are legendary. And the fear of failure can haunt even the most intrepid of enterprises. 74 CU IDOL SELF LEARNING MATERIAL (SLM)

And that’s just the development side. On the demand side, the proliferation of more consumer choice than ever before spurred by a multitude of digital channels is resulting in constantly changing customer expectations. This, in turn, is fuelling a demand for greater personalization, or the ability to market, advertise to, and even develop products or services that suit individual consumer preferences. These shifts and pressures continue to throw companies off their game — driving uncertainty and reactivity rather than deep understanding and responsiveness. But somewhere on the horizon, there is a true customer need for which there is also an actual solution. Finding that customer need and then developing the best solution for it can be a substantial boon to your business in a number of important ways. And of course, how you innovate — your mindset, processes, and methodologies — makes a huge difference not only in accelerating time to profitability of your new or revamped product or service, but in the long-term adoption of it in the market. To summarize, in a complicated, fast-moving world where brands no longer dominate the conversation and consumers now hold enormous sway, innovation matters because it’s the common language you and your customers still speak. Connecting innovation to business success Before we get to your customers, let’s first accept that there are, of course, purely business- focused reasons to innovate. When you invest in innovation and product development, you see benefits across your entire organization — impacting everyone from executives to sales and marketing to customer service and beyond. In a recent Inc.com article, the author laid out four reasons to pursue innovation as a driver of business success: ● Expansion. Successful innovation begets more innovation, which by nature enables your business to scale and grow. ● Competition. The unique solutions you develop help differentiate your business among the competition, giving a boost to your own revenue while nudging the entire industry in a positive direction. ● Customer retention. Innovation helps ensure that what you sell doesn’t become irrelevant or stop meeting the needs of your customers. ● Talent acquisition. Top-tier employees want to work for businesses that are at the innovative forefront of their industries. That’s where the action, the learning, and the opportunities are. 75 CU IDOL SELF LEARNING MATERIAL (SLM)

But while no company has ever said that it didn’t want to succeed, it can still sound a little alarming to hang so much promise on product innovation, especially if what you’re selling is doing well (so far) and you’ve carved out a nice niche for your business in the marketplace. Here’s the good news and the bad news: The good news is that you might…might…be able to skate by for a while without needing to fundamentally change up your offerings. The bad news is that the chances of that happening are fairly slim. As Thomas Ripsam and Louis Bouquet say in “10 Principles of Customer Strategy”: “Because technological breakthroughs are now common in nearly every industry, customers expect big changes to be a regular occurrence.” They go on to say, “The most successful companies continually experiment with innovations that make life better for customers. Customers appreciate companies that can do this effectively, time after time.” Putting it into context, incorporating product innovation into your overall business plan helps ensure that you won’t fall too far behind the competition, or, worse, fizzle out completely. You won’t be alone in this. McKinsey found that 80% of business executives are afraid that their business models are at risk for disruption, and 84% believe innovation is important to their growth strategy. Part and parcel of this is innovation in product development. Whether you’re with an SMB or a large, established company, whether your industry is tech, consumer packaged goods (CPG), food and beverage, or any other retail vertical, there are two fundamental mindsets to adopt when you set out to innovate: the first is an entrepreneurial, “fail fast” mentality; and the second is maintaining a customer-centric approach at all times. These mindsets integrate with and complement each other. Both are served by today’s market research methodologies, big data analysis, and tools and technologies such as artificial intelligence (AI) and machine learning. And both have the same goal: to help you form the most complete and detailed picture of your target audience(s) and to determine the product concept(s) that have the most potential for profitability. Let’s take a closer look. The entrepreneurial mentality Entrepreneurs understand that product innovation is a continual process of incremental testing and refinements to figure out what works and what doesn’t, and that failure along the way actually leads to knowledge, breakthroughs, and growth. That being said, they also like to remove much of the risk and uncertainty around new ideas by arriving at the most viable product concepts faster — or getting on the right track earlier on. How do you do this? 76 CU IDOL SELF LEARNING MATERIAL (SLM)

The practice of front-end development used to apply to software development, but now it’s widely used by many industries to identify, validate, and prioritize opportunities before you build or redesign anything. In simple terms, it’s how you determine the customer need, or needs, that you’d like to solve and the best ways in which to solve it. Instead of throwing the proverbial spaghetti on the wall to see what sticks, you take a stepped approach: 1. Gather ideas based on customer studies and research using approaches such as online methodologies, focus groups, in-depth interviews, etc. 2. Develop product concepts that fit consumers’ needs and preferences. At the same time, conduct a competitive analysis to make sure the concepts resonate within the larger competitive landscape. 3. Validate and prioritize concepts through concept testing as a way to compare and move forward with the ones that perform at the top. 4. Assess the market by using a customer segmentation process to form a picture of your target customer, and determine the concept(s) that may be the most profitable. 5. Refine the concept by developing a prototype to put into a formal product development process and incorporate user testing to iterate further. Each step leans heavily on customer feedback and user testing, making space for multiple iterations and incremental innovation. If something isn’t working at this stage, there’s less of a worry that it will make it into development, only to have you find out later when it’s still sitting on the shelves that it was a mistake. The beauty of front-end development is that it can be combined with agile methodologies to: ● bring more transparency to the product development process ● increase the speed of product development ● allow initial ideas and concepts to flex and change (fail fast) based on customer feedback and other factors ● reduce the wasted effort and resources that are so often a by-product of the old waterfall approach to product development A customer-centric approach Keeping customers at the centre of product innovation sounds like a no-brainer, right? Taking a customer-centric approach allows you to solve customers’ very real pain points by uncovering and incorporating their preferences, habits, and buying behaviours into every stage of the product development process. 77 CU IDOL SELF LEARNING MATERIAL (SLM)

But although customer preferences and behaviours have always played a role to one degree or another in new product innovation, organizations haven’t always been guaranteed success with this approach. While conducting customer surveys to capture customer likes and dislikes or using demographics like household income, age, gender, and geographic location does help you gain an important measure of insight into your audience, what you’re often missing is the deeper, more granular insight into your customers’ personalities — the underlying traits and characteristics that make them tick. Being able to see your customers in a more holistic way, and from that, understanding how best to reach them, is how you can really drive successful product innovation. Today, through the wonders of big data analysis, we have better ways than ever to segment and target the customers with the greatest likelihood of adopting a product and influencing others to use it. For example, you can conduct a customer survey as you normally would and then connect the results to a scan of big data points that includes things like the respondents’ social media activity, media consumption, and personal interests and hobbies. With qualitative, quantitative, and personality data, you can form a holistic view of your customers. This level of granular customer information enables you to segment and sub-segment to get to the most viable audience to target with product innovation. Furthermore, it helps you market and advertise to that segment — over the right channels, during the right times, and with the right packaging and product placement — to increase their awareness of your new product. In this way, you product has the highest chance of landing and — this is key — truly resonating with your audience in the market. You decrease the possibility that some of your customers will buy your new or revamped product or service initially, but then ignore it over time. And because you developed, packaged, and marketed to the right segment(s) at the outset, you increase the likelihood that: ● your customers’ needs and desires will be met ● those customers will broadcast their delight farther into their spheres of influence, thus widening the network of potential buyers ● your product or service will have a greater chance of profitability and long-term adoption Taking steps toward new product innovation As you embark on new product innovation, remember that an entrepreneurial mentality and a customer-centric approach are not an either/or proposition. Rather, they work together to achieve results. 78 CU IDOL SELF LEARNING MATERIAL (SLM)

During front-end development, you can integrate customer surveys and big data analysis at the ideation and concepting phases to help you identify who you want to innovate and develop for, and continue these methodologies into concept validation and market assessment to further segment and target the right audiences. Effectively, you are blending entrepreneurial efforts on the product side with market research efforts on the customer side. But before you do anything, understand first what your goals are with product innovation. The market is always in flux, and the speed of change and disruption is only increasing. With consumers holding more of the cards, it’s imperative to accept that product innovation is not a nice-to-have, but an essential component of a successful business in today’s world. Case Study: Flow of Tourism in India The land to travel a heaven of tourism delights a civilization to tour through bounded by the majestic Himalayan range in the north and edged by an endless stretch of golden beaches. India is a vivid kaleidoscope of landscapes, magnificent historical sites and royal cities, misty mountains, retreats, colourful people, rich culture and festivals. Modern India is the home alike to the tribal with his anachronistic lifestyle and to the sophisticated exist amicable with the microchip. Its ancient monuments are the backdrops for the world’s largest democracy. Teaming with over a billion people who voice over a million concerns in fifteen hundred different language, India is where people live with variety thrive on diversity and are too familiar with largeness to let it boggle them. Mud huts and mansions faces off across the city street. Lurid luxury and limp living are inhabitants of the same lane. India’s widespread diversity has always attracted both foreigners as well as its own citizen a like to explore its mirth and gaiety that it has to offer the world. Every nook and cranny of the country offers exquisite as well as exclusive tourism resource which echoes heritage as well as tradition of that particular area. There is hardly any country in the world which offers such wide variety of tourism. Tourism in India is the largest service industry; with a contribution of 5.9% to the national GDP in 2011and this creates 8.78% of the total employment in India. In 1997, India received 2.37 million foreign tourists but as we reached to 2011, there is a phenomenal growth in foreign tourist arrivals to India i.e. 6.29 million. Our foreign exchange earnings from tourism in 1997 was only USD 2889 million and by 2011 we have a foreign exchange earning of USD 16564 million tourism business and that is expected to increase to US$375.5 billion by 2018 at a 9.4% annual growth rate. Tourism is one economic sector in India that has the potential to grow at a high rate and ensure consequential development of the infrastructure at the destinations. As per the statistics of UNWTO, in 2011, there were over 983 million international tourist arrivals worldwide, representing a growth of 4.6% when compared to 940 million in 2010. International tourism 79 CU IDOL SELF LEARNING MATERIAL (SLM)

receipts (the travel item of the balance of payments) grew to US$1.03 trillion (€740 billion) in 2011, corresponding to an increase in real terms of 3.8% from 2010. Question for discussion: 1. Write about the flow of Tourism in India. 2. Write about the richness of Tourism in India. 3. Write about the types of Tourism possible in India through the case study 5.4 SUMMARY ● New product development is the process of bringing an original product idea to market. ● Product development strategy is one of the main forms of corporate strategy, and basically all product strategies focus on new product development strategy. ● Product development includes all factors of creating innovation, thinking of a concept to deliver the product to customers. ● Product development strategies are not something which is like a template, it differs by company, industry, and other external and internal factors. ● Product development strategy is one of the main forms of corporate strategy, and basically all product strategies focus on new product development strategy. ● New product development strategy is the means to reduce the risk in sourcing a product concept, to increase the opportunity to fit between products and demand in the market, to complete a product line, and to improve the sales of products that are existing by improving it (with an emphasis on novelty). ● Effective marketing depends on collaborative teamwork. Even in traditional methods of marketing, brainstorming, which is a group initiative, has always played a key role ● The role of CMOs is shifting from just business growth to business innovation. It takes conviction and courage to make bold decisions for disruptive innovation and Design Thinking helps marketing leaders to drive successful innovations to deliver real customer value. ● Creativity is crucial in Design Thinking. Building these capabilities in-house brings in the required agility to devise possible and creative solutions to human problems. ● Design Thinking preaches the concept that ideas are free and hence the goal of marketers should be to break these ideas to find problems, iterate and improve. 5.5 KEYWORD ● Product: In marketing, a product is an object or system made available for consumer use; it is anything that can be offered to a market to satisfy the desire or need of a customer. 80 CU IDOL SELF LEARNING MATERIAL (SLM)

● Services: A service is a transaction in which no physical goods are transferred from the seller to the buyer. The benefits of such a service are held to be demonstrated by the buyer's willingness to make the exchange. ● New Product: products that your business has never made or sold before but have been taken to market by others. product innovations created and brought to the market for the first time. They may be completely original products, or existing products that you have modified and improved. ● Strategy: Strategy is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. ● Talent acquisition is the process of attracting, finding and hiring skilled human labor for organizational needs in order to meet labor requirements. ● Strategic InnovationBy breaking the rules of the game and thinking of new ways to compete, a company can strategically redefine its business and catch its bigger competitors off guard. The trick is not to play the game better than the competition but to develop and play an altogether different game. ● CommercializationCommercialization is the process of bringing new products or services to market. The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service. ● Collaboration The best way to define collaboration would be to outline it as the process of two or more people or organizations working together to complete a task or achieve a goal. It is also defined as two or more people working together to achieve shared goals. ● Research & Development Research and development (R&D) includes activities that companies undertake to innovate and introduce new products and services. It is often the first stage in the development process. 5.6 LEARNING ACTIVITY 1. What are the factors that alter the design thinking process in Marketing. ___________________________________________________________________________ ___________________________________________________________________________ 2. With the help of diagram on a chart, explain in detail about the stages of product development. 81 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 3. Discuss the importance of solving problems with customer centric approach. ___________________________________________________________________________ ___________________________________________________________________________ 4. Have a Brain Storming session in classroom to suggest some innovative ideas to loss making companies. ___________________________________________________________________________ ___________________________________________________________________________ 5. Form groups of User Perspective approach and iterative approach to weigh pros and cons of each of them. ___________________________________________________________________________ ___________________________________________________________________________ 5.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is new product development? 2. Classify New product development? 3. What is product development strategy? 4. What is idea development? 5. What is strategic innovation? Long Questions 1. What are the steps involved in product development? 2. Explain the steps involved in product development strategy. 3. Explain design thinking approach. 4. Explain the strategies in new product development. 5. What is the importance of strategic innovation? B. Multiple Choice Questions 1. ______ sets the direction for new products by establishing goals and through funding decisions. 82 CU IDOL SELF LEARNING MATERIAL (SLM)

a. New Product development b. Product development strategy c. Marketing d. Planning 2. _________ Strategy is one of the main forms of corporate strategy. a. New Product development b. Product development strategy c. Marketing d. Planning 3. Which of the following is not a specific stage of Product Development? a. Idea Screening b. Business Analysis c. Customer Feedback d. Product Testing 4. What was the most daunting task of many companies despite huge investments of Time and Money? a. Innovation b. New Product Development c. Marketing d. Knowing Customer Behaviour 5. Which of the following is not a part of Business Strategy? a. R &D b. Operations c. Finance d. Sales 83 CU IDOL SELF LEARNING MATERIAL (SLM)

Answers 1-a, 2-b, 3-c, 4-a, 5-d 5.8 REFERENCES Reference Books ● Saxena R, Marketing Management, Tata McGraw Hill ● Transforming B2B Marketing to Meet the Needs of the Modern Buyer, by Carlos Hidalgo ● Matthyssens, Paul &Kirca, Ahmet & Pace, Stefano. (2008). Business-to-business marketing and globalization: Two of a kind. International Marketing Review. 25. 481-486. 10.1108/02651330810904044. Websites ● https://www.businessnewsdaily.com/5000-what-is-b2b.html ● https://www.investopedia.com/terms/b/btob.asp ● https://blog.hubspot.com/marketing/b2b-marketing 84 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-6 LIFE CYCLE OF PRODUCT STRUCTURE 6.0 Learning Objectives 6.1 Introduction 6.2 Life cycle of Product 6.2.1 Stages of Product Life Cycle 6.2.2 Identifying the Product’s Stage 6.2.3 Importance of product life cycle 6.3 Various Model of PLC 6.4 Summary 6.5 Keywords 6.6 Learning Activity 6.7 Unit End Questions 6.8 References 6.0 LEARNING OBJECTIVES After studying this unit, you should be able to ● Analyze the cycle of a product in the market ● Identify the stages of existing product ● Describe the purpose of PLC 6.1 INTRODUCTION: Thinking about our daily life, we would have encountered lots of changes among the things we use. Starting from the furnishers to vehicles we use, eventually we will not be having the same product for so long as we change as once a better option poops in. So the study of such conditions of a product is what the product life cycle is all about. On understanding the product life cycle, we tend to understand the products value and its advantages and disadvantages, trends of the product and customer behaviours and etc., 85 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.1 Product Life Cycle 6.2 LIFE CYCLE OF PRODUCT The product life cycle is the journey of a product from when the product is in development to after it has been removed from the market. When a product enters the market, often it is new to the consumer, it has a life cycle that takes it from being new and useful to eventually being retired out of the travel in the market. This is a continuous process - taking products from their beginning introduction stages all the way through their decline and eventual retirement. Like people, Products have their own life cycles. A product is created with an idea, and within the needs of modern business, it cannot go further until it undergoes research and development (R&D) and is found to be feasible and potentially profitable. At that point, the product is produced, marketed, and rolled out. In order to understand the process, we need to be very clear about when, where and how the product should be introduced to the market. 6.2.1 Stages of Product Life Cycle The term product life cycle refers to the lifespan of a product that is introduced to the market until it's removed. The life cycle of a product is broken into four stages: ● Introduction: This is the first phase of the product life cycle once it is developed. This phase generally includes a more investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits, 86 CU IDOL SELF LEARNING MATERIAL (SLM)

although it does not necessarily make or break the product's eventual success. During this stage the organization will be able to sense how consumers react to the product and can have alters in the product accordingly. Figure 6.2 First Phase of Product Life Cycle ● Growth: If the product is successful, it then moves to the growth stage. Here the attention of the product among the consumer gets increased and attains the stage of having good sales volume. This is generally a revenue generating stage and if the product has many competitions the organization still needs to spend on the marketing activities. This is characterized by growing demand, an increase in production, and expansion in its availability. Figure 6.3 Second Phase of Product Life Cycle ● Maturity: This has two distinguishing internal characteristics, one is this is the most profitable stage, while the costs of producing and marketing decline while the sale gets increased. In some cases, the product would have reached a stage that tends to slow down or even stop the sales. The reason might be various, like the product has 87 CU IDOL SELF LEARNING MATERIAL (SLM)

reached the market completely, or the competitors must have come up with better solutions or the same organization would have introduced the same product with additional features. This deals with products reaching the saturation point. So, the organization would build new products or pitch new markets for the product accordingly. Figure 6.4 Product Life Cycle ● Decline: It is a crucial stage as not every product in the market reaches a decline stage. There will be change in consumer buying behavior patterns and some other factors like new products would force a product to reach the stage. If it is not possible for the product to sustain then it would leave the market. Figure 6.5 Product Life Cycle This concept is used by management and by marketing professionals as a factor for strategical process to decide when to increase advertising, reduce prices, expand to new 88 CU IDOL SELF LEARNING MATERIAL (SLM)

markets, or redesign packaging. The process of strategizing ways to continuously support and maintain a product is called product life cycle management. 6.2.1 Identifying the Product’s Stage: It is important to note that the diagram of the product-life cycle represents an idealized product-life cycle and that most products do not follow the curve in a perfect manner. There may be sudden dips, in sales during growth or maturity, which do not accurately reflect the position of the product in the lifecycle, for example. Thus, there are no absolute indicators for the position of a product during the life cycle. However, there are general indicators which can be applied – in the context of your own observations over time – which will give some indication of a product’s position in its lifecycle. These can be summarized as follows 6.2.2 Importance of Product Life Cycle 1. It works as a forecasting tool- This is the first importance of product life cycle and it means is an important tool for sales forecasting because with the study of product life cycle management becomes aware of a problem that a product faces at different stages. 89 CU IDOL SELF LEARNING MATERIAL (SLM)

This tool also helps to determine the future work and goals of a necessary product company and also helps to study the market conditions regarding their sales potential. It can be very helpful for your future business expectations. Figure 6.6Forecasting 2. It works as a planning tool- This is the second important and it means is an important tool used for planning a particular object because it provides necessary data to plan marketing strategy and policy for compilation. It also helps to adopt the competitor’s policies and programs for making a suitable marketing strategy. This tool is very important for making the data reports of product life cycle management. Figure 6.7Planning 3. It works as a control tool- 90 CU IDOL SELF LEARNING MATERIAL (SLM)

This is the third importance of product life cycle and it means it helps in controlling because the marketing manager can make the necessary arrangement to make a product available to the market and repair for plans to control losses. In this tool, a marketing manager plays an efficient role in calculating the control work. This tool also helps to decide the plan’s strategy and this tool is also designed to analyse the plan so that it can detect whether the work or project is going well or wrong. Figure 6.7 Control Tool 4. It provides for marketing programs- This is the fourth importance and it means the various plans, policies, procedures, and strategies are followed in the different stages of the product life cycle. Thus, management can prepare marketing programs accordingly to achieve success. Marketing programmes are also very important for the development of product situation. Marketing Programmes are designed by the marketing manager for the achievement of marketing objectives. Marketing Programmes includes various things they can build the proper report for market analysis and those things are: collect data, create surveys, competitor analysis, sales forecasting, find the ideal customers, and so on. Figure 6.8 Marketing Programs 91 CU IDOL SELF LEARNING MATERIAL (SLM)

5. It provides an estimate for profits- This is the fifth importance of product life cycle and it means the rate of profit increases or decreases vary with the turnover ratio of an organization. At the introductory stage, profits are negligible after which they go and began to fall gradually and then become nil. All this can be stimulated through the study of product Life Cycle. If profit will decrease, that means the business is at a declining stage and vice versa. Figure 6.9Fifth Stage of Product Life Cycle 6. It helps in the development of new products- This is the sixth importance and it means, as we know, the life of a product is always limited. Thus management tries to improve its existing products or develop a new. It can be done by the events that take place in the market, promotional plans in the market, and also knowing their pricing policy to prepare for the development of new products if required. 92 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.10 Development of a New Product The Life Cycle of a product begins with its entry into the market and passes through the stages of market development, maturity, and end. 6.3 VARIOUS MODEL OF PLC The Product Life Cycle describes the Popularity of a Product from its first launch to its end. The Product Life Cycle Concept with 3-parameters proposed by Consuunt 93 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.11 Product Life Cycle concept The 3 most important parameters when analyzing Product Life Cycles are: Product: If it is a New or an Old Product. Concept: If it is a New or an Old Concept. Easy to Copy: If it it is Easy to Copy or Not As you can appreciate in the Image above, we have established 6 main Life Cycles If we put together there could be infinite amount of parameters that may affect a Product Life Cycle. We have tried to identify those that don’t depend on unpredictable external factors such as Economical crisis, New competitors, Legal issuesetc To understand let us take an example of Ford Mustang 94 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.12 Fifth Stage of Product Life Cycle Its name has remained as synonym of powerful, strong and reliable car. This iconic Product doesn’t lose Popularity, and that is why we have chosen it as our reference Product Life Cycle. Figure 6.13Product Life Cycle graph 1. New Product New Concept – Easy to Copy The Fidget Spinner is the perfect example of a fleeting product. 95 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.14 Appearance of a new Product  Suddenly it appeared… And suddenly it disappeared. It was a New Product, with a New Concept (hand toys already existed, but they were not popular).  However, it was (and still is) extremely Easy to Copy. Let’s analyze its Popularity with Google Trends: Figure 6.14 Analysis New Trends 96 CU IDOL SELF LEARNING MATERIAL (SLM)

2. New Product New Concept – Not easy to copy The iPad is a good example of a New Product, with a New Concept, but Not Easy to Copy. Figure 6.15 New Product and latest trends Again: some people could argue that, PDAs already existed, as well as smartphones, but there were not exactly the same. Let’s analyze its Product life cycle with Google Trends: Figure 6.16 Product Life Cycle with Google Trends Although its Popularity reached a maximum in 2012 (it took 2 years to reach it) it seems that it has now entered in a “flat” stage. Perhaps, it has already become a “reference product” such as the Ford Mustang. 97 CU IDOL SELF LEARNING MATERIAL (SLM)

Those peaks are due to Christmas holidays or/ and the release of a new version. 3. New Product Old Concept – Easy to Copy Do you remember the Livestrong rubber band? It was a simple rubber band that Nike developed for fighting cancer. Simple, but everybody went crazy about it. Its minimalist design. All the celebrities had it. Its manufacturing was initially limited. It was a New Product, with an Old Concept, and Easy to Copy. Let’s analyze what happened with Google Trends: Figure 6.17 Product Life Cycle with Google Trends As you can see in the image above, its Product Life Cycle lasted only two years. The Growth stage lasted 9 months and was followed by a sharp decline. 4. New Product Old Concept – Not easy to copy Speaking of Ford again, we will now look at one of its recent releases, the Ford Kuga. 98 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.18Ford Kuga This vehicle is a New Product, with an Old Concept (SUV vehicle) but it is Not Easy to Copy (developing a new car is something very difficult). Let’s analyze its Popularity with Google Trends Figure 6.19Popularity with Google trends 99 This graph shows a very successful product launch. CU IDOL SELF LEARNING MATERIAL (SLM)

 Its popularity, with its ups and downs, has grow steadily. Moreover, since it was an Old Concept, its popularity grew strongly in the early stages.  It took just 11 months to reach that initial Popularity peak. 5. Old Product New Concept – Easy to Copy Few years ago, e-books were the big new trend. And Amazon’s Kindle, was King.  A simple device that allowed you to read everything you wanted, wherever you wanted. Figure 6.20Amazon Kindle This product was not offering any new book. What this product allowed you to do was to read your favorite books wherever you wanted in a new different way. But those books already existed. That is why Amazon’s Kindle could be considered as an Old Product (books) with a New Concept, but it was Easy to Copy (the technology involved was not very difficult). Let’s analyze its popularity with Google Trends: 100 CU IDOL SELF LEARNING MATERIAL (SLM)