2.2g The role of marketing, enterprise, innovation and collaboration in the development of products

Question 1

Market Forces

Answer 1

Market forces are the factors that influence the price
and availability of goods and services in a market
economy. Market forces push prices up when supply
drops and demand rises, and drives prices down when
supply grows and demand shrinks.

Question 2

Where do new products come from?

Answer 2

• Market pull: the user demands a new product,
  which might be a revitalised existing product (made
  better) or a radically new product (unlike anything
  that’s currently available).
• Technology push: the arrival of a new material,
  component, process or manufacturing method
  provides an opportunity for a new or improved
  product.
  Sometimes, a mixture of market pull and technology
  push can be evident in bringing a new product to the
  marketplace

Question 3

New product? Is it really new?

Answer 3

Most products are revitalised regularly, take a mobile
phone, pair of trainers or production car. A new model
is released every year or two to ensure that the new
product satisfies the user’s needs and desires.
Face-lifting, or ‘tweaking’ products by adding or
changing small details is common. This is typical of
revitalised products.
Radically new products are ones which arrive and have
never been seen before, like the fist hybrid car powered
by electricity and fuel for examp

Question 4

Market Research

Answer 4

Knowing the intended target market is important
and knowing what the NEED and WANT is even more
important. This information is found through detailed
market research strategies.
* Market segmentation: dividing markets into
smaller groups to enable targeted marketing.
* Product development: producing a product that
matches the needs and wants of the target market.
* Customer satisfaction analysis: measuring
customers’ happiness with current products and
services to identify areas for improvement.
* Customer insights: reveals why customers behave
in certain ways.
* Analyse the competition: study the products
that are being competed against, identifying their
strengths and weaknesses.
* Campaign effectiveness: advertising and
promoting a new product is important to generate
initial demand and popularity

Question 5

Innovation

Answer 5

Innovation is creating a new value to a product.
Innovation can be seen in four different ways:
* incremental
* disruptive
* architectural
* radical.
Adding a new function, increasing efficiency,
using a new material or manufacturing method or
incorporating a ‘greener’ element can all provoke
innovation in product development.

Question 6

The 4Ps

Answer 6

The 4Ps is sometimes called the marketing mix, and it
can be used as an innovation strategy to ensure a new
product succeeds.
* Product: to succeed, the product needs to meet the
needs and wants of the target market and compete
favourably with competitor products. A creative
feature or innovative value will help.
* Price: this is how much the product will retail
for, but this must include a profit margin and all
production costs too. It must also compare with
competitor / similar products already on the market.
* Place: or placement, this is about how the users
access the products. Distribution is key to ensuring
that all demand is met.
* Promotion: the communication strategies that
a company uses including advertising, sales
promotions, money off discounts, special offers and
public relations strategies.
The 4Ps are all critical, but together they form tactical
components of a marketing plan. The use of emerging
technology and especially digital developments provide
both companies and users with instant information on
products.