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10. Developing process of new product. Stage’s characteristic.

Stages in the development process:

  1. Generating new products ideas. New product development starts with an idea. A system must be designed for stimulating new ideas within an organization and then reviewing them promptly.

  2. Screening ideas. As this stage new-products ideas are valuated to determine which ones warrant further study.

  3. Business analysis. A surviving idea is expended into a concrete business proposal. During the stage of business analysis, management:

  1. identifies product features;

  2. estimates market demand; competition, and the products profitability;

  3. establishes a program to develop the product;

  4. assigns responsibility for further study of the product’s feasibility.

  1. Prototype development. If the result of the business analysis are favorable, then a prototype (or trial model) of the product is developed. In the case of services, the facilities and procedures necessary to produce and deliver the new product are designed and tested.

  2. Market tests. Unlike the internal tests conducted during prototype development, market tests involve actual consumer. A new tangible product may be given to a sample of people for use in their household (in the case of a consumer good) or their organizations (a business good).

  3. Commercialization. In this stage, full-scale production and marketing programs are planned and then implemented. Up to this point in development, management has virtually complete control over the product.

    1. Give the proposition for averting communications barriers.

Barriers and the stages:

  • Message should be not too lengthy, disorganized or contains errors.

  • Don’t use poor verbal and body language can also confuse the message.

  • Don’t offer too much information too fast.

  • To be mindful of the demands on other people’s time, especially in today’s ultra-busy society.

12. What are the methods for companies deciding on the promotion budget? Explain each of them.

Four common methods for companies deciding on the promotion budget:

  1. Affordable method. Many companies set the promotion budget at what management thinks the firm can afford. However, this methods ignores the role of promotion as an investment and the immediate impact of promotion on sales volume, it also leads to an uncertain annual budget, making long-range planning difficult.

  2. Percentage-of-sales method. Many firms set promotion expenditures at a specified percentage of sales (either current or anticipated) or of the sales price. Supporters say this method links promotion expenditures to the movement of corporate sales over the business cycle, encourages management to consider the interrelationship of promotion cost, selling price, and unit profit; and the encourages stability when competing firms spend approximately the same percentage.

  3. Competitive-parity method. Some companies set their promotion budget to achieve snare-of-voice parity with competitors.

  4. Objective-and-task method. Here, marketers develop promotion budgets by defining specific objectives, determining the task that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.