All of the steps in new product development
All of the steps in new product development
1) Idea generation
2) Idea Screening
Will target market benefit from this product? Chan this be competitive with similar products?
3) Product Analysis
Determine desired sale process and assess the cost of production
4) Development and Testing
Produce virtual prototype, get potential customer feedback
5) Product and Marketing Mix Development
Produce physical prototype, obtain more feedback
6) Market Testing
Place in selected target market
7) Commercialization
Introduce product to the market, begin rollout process
Product life cycle
New Product(or alteration)> Growth (market expands)> Mature (market levels making steady profit)> Decline (loss of interest, profit decreases greatly)> Restart of cycle
Total product concept
Core- the primary benefit or service that satisfies the basic need or want that motivates a consumer’s purchase.
Actual- The tangible aspect of the purchase that you can touch, see, hear, smell, or taste.
Augmented- Consists of the core product and the actual product plus other real or perceived benefits that provide additional value to a customer’s purchase
Product differentiation
Product differentiation - the process of distinguishing a product from its competition in real or perceived terms to attract customers.
Convenience item
Convenience- products that customers purchase frequently, immediately, and without much deliberation
Unsought item
Unsought- products buyers don’t usually think about buying, don’t know exist, or buy only when a specific need arises.
Special item
Special- spending a considerable amount of time and effort searching for particular brands or styles. These customers know exactly what they want and won’t accept substitutes. These are types of unique or specialized products.
Who does branding benefit?
Both buyers and sellers
Buyers: well-recognized brands reduce shopping time necessary to find the quality and consistency they desire in a product.
Sellers: helps highlight the special qualities of their products, which can lead to repeat purchases as well as new sales at higher prices.
Manufacturer Brand
Manufacturer- Brand created by producers; There are two types of these: FAMILY & INDIVIDUAL
Family Brand
Family- A brand that markets several different products under the same brand name
Individual Brand
Individual-A brand assigned to each product within a larger company’s product mix
Private Brand
Private-A brand created by a middleman; i.e. wholesalers dealers or retail stores. \
Co-brand
Co-brand-Packaging two or more brands affiliated with a single product such as Gillette power shaving equipment with Duracell batteries
Generic Brand
Generic-A product that has no brand at all; they look very similar to branded products just cheaper
Break even equation
Total fixed Costs / Sale price- Variable costs (TC/SP-VC= Breakeven)
Why do we do promotion?
To inform targeted customers on about the benefits of a product and persuade them to purchase it.
What is a promotional mix?
The strategic combination of promotional tools used to reach targeted customers to achieve marketing objectives.
Steps in a promotional campaign
- Identify the target market- the group of customers on whom the marketing is focused
- Determine the marketing objectives- are you trying to maximize profits, market shares, build traffic or build brand image?
- Determine the budget- What’s the biggest bang for your buck?
- Design the message- informs customers of the products benefits
- Implement promotional mix- Use all of your marketing tools to get your message across to the public
- Evaluate and adjust as needed- Watch how your business is doing and re-adjust if needed
Mobile marketing
Delivering advertising messages via mobile phones or other mobile devices
Product placement
Displaying certain products in TV, movies, and video games, where they will hopefully be seen by potential customers
Viral marketing
A practice that involves using social networks, e-mail, websites
QR Code
- A type of individual code that can be scanned on your phone that usually takes you right to a company’s website
Controlled Messages
include advertising, advocacy advertising, and public service advertising. A company might also disseminate annual reports, brochures, flyers, or provide films or speakers to send a controlled message to target audiences.
Uncontrolled Messages
generally take the form of publicity: information about an individual, an organization, or a product transmitted through mass media at no charge
Direct marketing:
Selling goods directly to the people in the market
Telemarketing:
Calling mass amounts of people in hopes of selling them your product
Multi Level marketing:
A marketing plan built up of referrals
Financial Management:
Strategic planning and budgeting of funds for a firm’s short-term needs (one year or less) and long-term needs
What does a financial manager do? What are they responsible for?
Responsible for the financial health of a company. Duties include:
Developing plans that outline a company’s financial short-term and long-term needs
Defining the sources and uses of funds needed to reach goals
Monitoring the cash flow of a company
Investing any excess funds
Raising capital for future growth
Evaluating financial outcomes and expectations and generating financial reports
Current assets-
are those that can be turned into cash within a year. Accounts receivable, inventory, and short term investments, such as money markets accounts
Liabilities-
includes debts and obligations owned by a company that are due in more than one year, such as mortgage loans for the purchase of land or buildings, long term leases on equipment and buildings, and bonds issued for large projects
Equity-
is what is leftover after you have accounted for all of your assets and taken away all that you owe
Cash flow and Cash flow statement
Shows the exchanges of money between a company and everyone else it dealt with during that period— that is, the cash that came into and went out of the business
Equity-
is what is leftover after you have accounted for all of your assets and taken away all that you owe
Liquidity:
the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.
Accounting definition-
tracks a business’ income and expenses by recording financial transactions
Corporate accounting
Gathering and assembling data required for a firm’s key financial statements
Managerial Accounting
Is the process of gathering accounting information to help decisions inside a company
Financial Accounting
Is the process of gathering accounting information to guide decision makers outside a company
Auditing
Is the process of reviewing and evaluating the accuracy of financial reports
Government and non-for-profit accounting
Is required for organizations that are not focused on generating a profit
Tax accounting
Involves preparing tax returns and giving advice on tax strageties
What government agencies oversee the stock market?
U.S. Securities and Exchange Commision
Bonds-
The most well-known risk in the bond market is interest rate risk - the risk that bond prices will fall as interest rates rise. By buying a bond, the bondholder has committed to receiving a fixed rate of return for a fixed period
Treasury Bills (T-bills):
Bonds with maturities ranging from 4 weeks to 52 weeks.
Treasury Notes (T-notes):
Bonds that mature in 2, 3, 5, 7, and 10 years. Interest paid semiannually.
Stock-
might lose all of your money when you buy and sell stocks, especially if you’re not planning to invest for the long term
Blue Chip Stocks:
Issued by companies that have a long history of consistent growth and stability, pay regular dividends and maintain a reasonably steady share price. LOW RISK.
Income Stocks:
Issued by companies that pay large dividends, such as utility companies like Duke Energy; reliable income from shares. RELIABLE COMPANIES = LOW RISK
What is in it for you if you buy a bond?
Buyer receives interest on a bond in addition to the original amount. Investor has a legal promise that his/her investment will be repaid.
Bear and bull market differences:
Bull market is when it increases investors confidence as market value increases and Bear market is when it decreases investors confidence as market value decreases
(attacks upwards like a bull vs. claws downwards like a bear)
Income statement:
revenue-expenses=Net Income (or loss)
Cash flow
Cash Inflows: customers, interests, & asset sales i.e. stores/ businesses
Cash Outflows: businesses/ companies i.e. suppliers, taxes, employees, interest and dividends, & buildings and equipment
Ratios to look at in financials
Working Capital: current assets- current liabilities
Current Ratio: current assets/ current liabilities
Debt-to-Equity ratio: total liabilities/ owner’s equity
Gross profit margin= (revenue - cost of goods sold) / Revenue
Operating Profit Margin= (Gross profit- operating expenses) / revenue
Earnings per share= Net Income/ outstanding shares
Sarbanes Oxley act
After NRON and Arthur Andersen so that there would be no accounting fraud.
Chris Bauman
Chris told us all about how he created a vertical monopoly in the music industry when he began hosting shows for bands such as “fall out boy” and “deadmau5”. He also told us about his time at Valpo.
He would give out last minute free tickets to concerts in order to fill venues
