Core Concepts of Marketing

PRODUCTPLANNINGANDSTRATEGYFORMULATION 177

TABLE7. 1 ScreeningProductIdeas

Rating

VeryGood Fair Poor Unweighted Weighted

Weight (5 ) (4) (3) (2 ) (1) Value Value

Customerutilities

• amusement .'1 X 5 .5


• comfort .' 1 X 3 .3


• convenience '; :< 4 .8


• satisfaction .3 X 4 1.2


• easytouse .1 X 3 .3
  Abilitytocreate
  effectivesales
  appeals .3 X 4 1.2
  Price 1 X 2 2
  Productquality .2 X 3 .6
  Productprofitability .2 X 3 .6
  Attractivenessof
  producttocustomers .1 :I 4 .4
  Abilitytoproduce
  productin
  largevolumes .3 X 5 1.5
  Abilityofnewproduct
  inhelpingsaleof
  otherproducts .1 X. 1
  Requireslow
  capitalinvestment .3 :.( 4 1.2
  Productcanbe
  promotedthrough
  existingadvertising .2 X 3 .6
  Productcanbe
  producedin
  existingfacilities .3 X 4 1.2
  Productcanbe
  distributedthrough
  existingchannels .3 X 3 .9
  Strengthofco:npetition .2 X 3 .6
  Patentsituation .1 X .-2 ~
  TotalScore 60 12 .4

Acompletecostapprai:;alis alsonecessaryaspartofthebusinessanalysis.11:isdif-

ficulttoanticipateallthecoststhatwillbeinvolvedinproductdevelopment,butthefo l-

lowingcost itemsaretypical:

• Expecteddevelopmen~cost;;,includingbothtechnicalandmarketingR&D


• Expectedset-upcosts(production,equipment,dislribution)


• Operatingcoststhataccountforpossibleeconomiesofscaleandlearningcurves


• Marketingcosts,especi81ly9r:Jmotionanddistribution


• Managementcost:;