The short descriptions that follow provide information about two different companies. In each case, there is at least one major problem with the way the company is currently approaching the new product development process. Read and evaluate each statement carefully, and then explain:
a) your diagnosis of the problem, and
b) your recommendation for what the company should do as a substitute for what is described in the case situation.
Assurance Drug Company has developed a promising new nonprescription tablet to relieve the symptoms of allergy sufferers. The idea has successfully passed the screening stage of the company's new product development process. The company has also completed concept tests and produced some tablets. Now, the head of the new product development group has sent the following memo to the marketing department. "Our laboratory tests have satisfied the Food and Drug Administration criteria and we are ready to move ahead with a final test market prior to commercialization. I want you to start thinking about this now. If the product does well in the test market, we will need to develop the rest of the marketing mix. We will want to come up with an attention getting package design-one that will really stand out on a drugstore shelf. We will also need to decide on the brand name we would use in a national distribution. For now, we will just price the product in test market at the same price as our cold tablets. So final pricing decisions will also need to be made. And, of course, we will need to decide what type of promotion to use-and what message we want to get across to potential customers. I wanted to alert you to these exciting developments so that you could be getting your ideas together. We want to be ready to move quickly into commercialization if the test market is successful.”
a) The primary problem in the given case is that the Drug Company has not come up with a final product. They are planning to launch a prototype in the test market. The prototype does not have any packaging or branding associated with it. The marketing department is yet to come up with a name of the product. This cannot be considered as testing of the final product. When a company test markets its product, the product has been packaged and its branding strategy is ready. Then launching it in the test market, will help in assessing the real feedback of the consumers to the product.
b) My recommendation to the Assurance Drug Company is that they must first come up with a packaging, branding and marketing strategy for the product and make it market ready. The product must have a defined name, an attractive package and a well defined market strategy. Then it must be launched in the test market so as to check consumers’ reaction and response to the same. The viability of the branding, packaging and marketing strategy of the company, will also get checked in that instance. This will help the company to identify its loop holes and weaknesses. The company can then work upon the same and come up with an improved version of the product, which will get launched in the real market.
The short descriptions that follow provide information about two different companies. In each case, there is...
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