Describe key product characteristics, especially those that impact price and consumer benefits and value
This assignment will build upon some of the work you have completed in previous weeks, with the primary focus being the further development of a new product concept. The product that you develop must be one that capitalizes upon insects as an ingredient in the manufacturing of a food (or possibly other) item for humans or animals. Ultimately you will use this product/service concept as the basis for future forums, so it must be a product concept that targets ultimate consumers, rather than the government, non-profit, or businesses. A product that will ultimately be sold through retailers to consumers would still be considered one that targets ultimate consumers. (Retailers are a distribution choice.) In future forums you will discuss the distribution and marketing communications for your product concept, but this forum focuses on the product concept itself and some pricing decisions.
IMPORTANT:
You can choose to take the perspective of 1) a bakery, that uses cricket flour or other insect protein / parts as an ingredient for its baked goods; or 2) a company that manufactures a human or animal item incorporating insects, or ingredients made from insects.
As always, citation in APA format is expected. While much of this post will be your own ideas, your justification may cite the readings or other sources.
Question 1:
Provide a brief product and target market description and classify the new product concept.
• Begin with a very brief overview of your product, and provide a summary description of the key characteristics of the target market to whom it is meant to appeal. Will this be marketed by an existing company or by a new firm?
o If so, what company, and why are they a good fit to produce and market this item?
o If not, why would this best be marketed by a new business?
• Describe the group or class of products against which your brand is meant to compete. Who are the main brand competitors?
• Within the United States, how would you classify your new product or service concept with respect to the type of consumer products discussed in the readings (convenience, shopping, specialty, unsought)? Why?
• Think about the types of new products described in the readings. These range from new‐to‐the‐world products (discontinuous innovations) to repositioned brands. Where would you place your concept? Why – justify your thoughts.
Question 2:
Describe key product characteristics, especially those that impact price and consumer benefits and value. Justify your decisions.
• Describe your product concept more thoroughly. What are your product’s primary benefits? What are its primary features and attributes? What is its differential advantage when compared to the compeition? How is it used?
• Which type of insects or insect-based ingredients (e.g. cricket flour) will form the basis of your product or service? Are there any other insect‐related ingredients you would incorporate? Be specific. If cricket flour is used, will it be in the context of gluten-free, whole wheat, etc.?
• Discuss the product mix, the product line depth, and the product line width of your “bug” items. Will they be offered in different flavors, different sizes, different varieties? Explain. For example, if marketing a bakery, what types of baked goods will be sold (bread, cakes, wedding cakes, cookies, etc.)? Will all baked goods use insect ingredients, or only some?
• Describe the customer service strategy, warranties, guarantees, and any supplemental products or services that will accompany the purchase. For example, if you are marketing a bakery, will delivery or curbside pick-up be an option?
Question 3:
Next describe the positioning and branding decisions related to your product / service concept in detail.
• How will you position the product? (Review the information found in Ch. 7 related to positioning strategy.) List your positioning statement.
• How will you brand your “bug” items? Will you use corporate, product, or private branding strategy? Why? Justify your decision.
• What about individual vs. family branding? Which makes the most sense given your product plans, and why?
• What name(s) will you use for your bakery, product, or product line(s)? Justify your brand name for the bakery and/or product by evaluating it against the characteristics for a strong brand name displayed in Table 7.2 of the text. IF creating a new company to market the product, justify the new business’ name.
• Describe related branding activities. Specifically, describe the corporate symbol or brand mark, and packaging design (shape and colors, etc.) Justify your decisions. How will the packaging protect the product, and facilitate storage? How will it help to promote the product?
Question 4:
Describe your pricing strategy.
o What form will your pricing objective take and why? (IF APPROPRIATE . . .) Will your pricing objective for items not made with insects differ from that listed above? Why?
o What pricing strategy will you use for your “bug” goods (skimming, penetration, everyday low pricing, prestige pricing, or some variation of competitive matching?) Why do you believe that is most appropriate?
o What pricing approaches might you use for these same products (cost‐plus, odd-even pricing, price lining, demand backward pricing, loss leader pricing, price bundling, captive pricing, product mix pricing, payment pricing, promotional pricing, or discounting? Why? Will you vary the pricing approaches at different times of the year or due to specific circumstances? If so, explain.
o What is the base price you will set for your goods? (SEE PRICING NOTES ON NEXT PAGE.) IF selling through retailers (such as grocery stores), include both the price paid by consumers, and the price retailers will pay your business to purchase the goods.
o Don’t forget to justify the decisions you made above.
SPECIAL NOTES – Price:
While you are not responsible for describing your distribution strategy at this point, you should be thinking ahead as to whether you will sell direct to consumers, through Amazon, or via retailers/wholesalers, as this decision will impact your pricing approaches and base price.
If you choose to include retailers/wholesalers such as grocery stores in your distribution strategy, understand that the price paid to you by retailers will be much less than what ultimate consumers pay when they buy your goods through the store. As an estimate, expect retailers to double the cost of the product (e.g., your selling price to them) when they set the price to be paid by ultimate consumers. Include both prices (price paid by retailers, price paid by consumers) in your write-up. Amazon works differently. You set the selling price, but a percentage of that price (usually around 15%) is retained by Amazon depending upon the services provided for each item sold or held in inventory. IF you are pricing from the perspective of a bakery, you are producing the goods yourself, so the price you set it what consumers will pay.
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