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Product Development - Coggle Diagram
Product Development
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NPS
But to get an overall view of the satisfaction consumer feels about the product, we need to consider all touchpoints and create a net promoter score
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Asking one simple question - "How likely would you be to recommend our product to your friends and colleagues?
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And usually follow up with an open-ended question - e.g. "Please briefly explain why you gave that score"
Could also include NPS as part of quant survey to see which attitudes/experiences drives NPS up or down and understand this from customers POV
But can also use NPS for qual research - e.g. using focus groups to understand Detractors vs. Promoters and the reasons why they are happy/unhappy with what you are offering them
Limitations of NPS - can't use it to compare yourself against other competitors in different categories/industries because different benchmarks are used and also it is not good to compare NPS across cultures because there are differences in how positive/negative scores people choose to give across cultures
Killing products
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Can usually consolidate and kill less profitable products to make a more successful and profitable business
Everytime you create a new product you must also kill one - too many products will end up risking both the organisation and all the products you have within it - learn to kill weak products, work with fewer distributors, trim back on channels, and focus resources on the strongest products
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Product Diversification
How the same product can offer different opportunities to different customers in different categories
Different types of diversification:
- Line extension - an extension of an existing product but within a category (i.e. Tag Heuer connected digital watch) (could do line extensions based on new target segment by stretching existing products/lines to create new products for that segment, or create line extension to combat low end competitors (fighter brands) - designed to take on lower priced competitive rivals within the category, or can look at premium line extensions - i.e. more exclusive, higher end to increase prestige, attractiveness of the brand and charge higher prices across all its products by setting tone of exclusivity to spread halo effect across all of its products (note - line extensions more likely to sell well than brand extensions, but since they are within the category of our core business, there is much more perceptual risk if the line extension is counter to what our brand is meant to stand for it will do damage to the brand and its reputation (i.e. Aston Martin trying to sell new cars build with Toyota design, low price etc. but it damaged their repuation
- Co-branding - when 2 companies come together to product a product/limited edition offer (i.e. Tag Heuer & Mercedes Benz co-branded watch) (both brands bring their diverse strengths to the partnership into a single product - potentially doubling market size, sharing innovation resources with another partner organisation) (Note - co-branding can help not only brands sell more products but also to alter and improve brand equity and also have a spill over effect, for ex. in the long term benefit for brand associations from two different brands to spill over to one another - so you can build brand and make money at the same time
- Brand extension - when a company starts to sell products in a completely different industry than it started out with - should be based on awareness/associations the brand has already created (i.e. Tag Heuer sunglasses) (e.g. Louis Vuitton opening store in Mongolia because not many more places to go to) - therefore diversification expected to move from geographic focus to brand focus in attractive new categories based on brand equity and associations we have already built up, e.g. Tag Heur associated with luxury, swiss quality - these strong associations to extend into eyewear category) or if a brand has long legacy of trust, security and safety or service for ex. could use this to extend into other product/service categories relating to safety for ex. (note - most brand extensions tend to fail, need to be careful of this but then again a brand extension won't usually damage the sales of the original product line so there is not too much damage to be done if the brand fails and is far enough from the core brand
Defining the Product
Kotler: "a product is anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, places, organisations and ideas"
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Marketing strategy will express itself through various tactical choices - starting with Product P - which will impact the other P's - can't understand Product without the diagnosis and strategy
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