Product and Service Development in Marketing: A Report

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MARKETING PRODUCT AND SERVICE DEVELOPMENT
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Table of Contents
Introduction......................................................................................................................................3
Part A...............................................................................................................................................4
Part B...............................................................................................................................................9
Part C.............................................................................................................................................13
Conclusion.....................................................................................................................................15
Bibliography..................................................................................................................................16
Appendix........................................................................................................................................18
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Introduction
A company needs to build a strong relationship with the customers in order to increase sales of
their products and marketing helps to achieve these business objectives. Marketing is beneficial
for creating awareness for any new product or renovation of existing products. In this way, an
organisation can drive audiences towards their brands. In recent times, technology is being
developed rapidly. Customer demands are being changed day by day with respect to such
developments. Product and service development is required for addressing such needs of
consumers. However, improper implementations of new products may pose challenges for the
company. Team working is important for producing collaborative work and avoiding such
challenges. It is important to expertise in the market, finance, sales and other factors for making
any effective decision on product development. A diverse functional team can make effective
decisions by discussing the product development ideas in a meeting. A functional team is formed
generally with those people who have different area of expertise. In this way, employees of a
functional team bring innovative ideas to the organisation. The study targets to provide guidance
on the marketing products and service development process of a company.
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Part A
Introduction
Every organisation goes through four essential stages of product life cycle such as start-up,
growth, maturity and rebirth. The concept of lifecycle helps to understand the current position of
a company. The section of this study intends to discuss the lifecycle stages of ZARA.
1. An introduction to the organisation and partner companies.
ZARA is one of the biggest Spanish fast fashion clothing retailers in the world. Rosalía Mera and
Amancio Ortega established the company in 1975 (zara.com, 2019). This organisation is
headquartered at Arteixo in Galicia. It is one of the main brands of the renowned apparel retailer
brand Inditex group. The company firstly started its international expansion in 1989 through
Portugal and currently it has more than 10000 stores worldwide (zara.com, 2019). The annual
revenue of the company is around £14.89 billion per year. The company specialises production
of latest fashionable clothing for men, women and kids, accessories and others. It is stated that
the organisation manages more than 12000 new designs every year. This organisation employs
around 162,450 people currently, who are working for the growth of the company (zara.com,
2019). According to a report, ZARA also owns small brand s such as pull&Bear, Massimo Datti,
Bershka and others.
2. An overview of the different products and services offered in their company’s portfolio.
ZARA has been able to manage 20 different product lines per year. It is stated that the products
are generally supplied based on latest trends and demands of customers (statista.com, 2019).
Supply chain of these organisation supplies fresh products twice a week in the stores, which has
helped the company to provide customers with fresh collections ZARA has launched new
spring-summer collection 2019 recently for the fashionable customers. Spring summer
collection of ZARA provides customers with floral, tie and dye printed outfits, lightweight
cotton outfits, poplin dresses, beads neckpieces, woven sling bags and 83 other variety of outfits.
ZARA produces more than 450 million pound products per year (zara.com, 2019). This
organisation offers the customers with fast delivery facilities. Customers can order products
through the online website and ordered products are delivered within 48 hours in most cases. The
operation management team of this company thoroughly inspects products, sorts and packs it for
delivery.
In this way, they have developed the service quality, which is becoming fruitful for attracting
customers. ZARA has recently introduced self-service checkout facilities for customers to
improve shopping experience. This self-service facility is useful for reducing check out time for
customers. The online website of the company has been developed so that online shopping
experience can be improved. The brand has launched new student discount in market through
student beans.
3. An evaluation of a range of the products and services in relation to their lifecycle stage.
The concept of product-life cycle helps to understand what can be expected from the market for a
new product in different stages. This is beneficial for making decision on different strategies and
plans. There are four stages in the life cycle of new products and services including
development, introduction, growth, maturity and decline (Stark, 2015). Stage of product
development can be considered as the first stage of product life cycle. ZARA has launched new
spring-summer collection 2019. This collection offers customers with 83 or more latest and
trendy designs, which will also help customers to feel comfortable. The management team of this
brand has observed huge success of winter collection and came up with the idea of spring
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summer collection. The employees have conducted research on customer behaviour and found
out that the trend of belted outfits and tie and dye are being popular among the customers.
Figure 1: Product life cycle
(Source: Stark, 2015)
After collecting such information, the employees conducted idea-screening process and brought
innovation to the seasonal wear collection. They have represented this information to the
designers who have designed belted summer jackets, poplin dresses, tie and dye and other prints.
In the second stage, the brand starts to conduct initial promotion for the product line. ZARA has
also developed their service infrastructure and provided customers with self-service checkout
facilities and coupons. The management team has observed that the queue in checkout counter is
becoming the reason behind negative customer experience. Self-service checkout counter
installation was an important step for developing customer experiences and generating their
satisfaction. After screening this idea, they have made decision on it, as they found this idea to be
cost-effective. The organisation has also developed their delivery system by managing
distribution channel and supply chain. The team has worked collaboratively to ensure that the
brand is being able to source products on time and deliver it as per the customer demands. They
have launched the fast delivery service for attracting more customers towards ZARA and created
initial promotions for this service. In this way, the brand has introduced new products and
services in the market.
The working team of this brand has tested products and services before launching it to the
market. In the third life stage of the products, the market share of this products have been
increased. A large amount of money is also invested for creating marketing campaigns for the
products. For example, some companies use segmentation, target and positioning for positioning
these products as per the demand of targeted customer segments. Most of the companies in this
stage uses social media marketing process for creating brand awareness. In the fourth stage, the
sales rate of this products increases significantly. Innovative products are launched. In the last
stage, the demand of those existing products tends to decrease. Companies start to reassess the
products or services in order to keep the market share.
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After evaluating all these information, this can be stated that the spring-summer collection of this
brand is in introduction stage. This has been observed that the product line has already been
developed. However, the company has started initial promotion through their company website
and social media pages. Management of ZARA is also planning to invest more money on its
marketing campaigns, which shows that it has not reached growth stage. On the other hand, self-
service checkout system is in product development cycle, as the operation management team is
still testing its efficiency before installing it to the stores. The online website is providing with
some seasonal coupons and student offers, for generating loyal customers. This service
development is in growth stage, as the company has been able to create awareness about these
offers.
4. An evaluation of how to manage the lifecycle stages and the choice of appropriate
product line management choices. Provide justification for your recommended choices.
The product life cycle can be managed in following ways:
Introduction: After the product development process, the team develops a sales and promotional
strategy, which will be helpful for developing a promotional or sales strategy and positioning a
product in the market. An organisation can update their website with information about new
product line and conduct initial promotion.
Growth: In this stage sales of any product starts to rise. Products may also undergo further
development process so that more customers can be attracted. In this stage, companies will need
to invest more money on promotional activities such as celebrity endorsement, sponsorships,
social media marketing and others.
Maturity: Competitors may offer better solutions in this stage, which can cause customer switch.
An organisation will have to develop new strategy or remodel the existing products, which will
help these brands to keep their market position.
Decline: Sales rate starts to decrease and product seems to be stagnant. In this stage, an
organisation will have to develop new products and launch it into the market.
Life cycle can be managed by following four different product line management strategies such
as Total quality management, JIT and other technologies. The product-line management choices
have been discussed:
Production: In this process, existing manufacturing system of a company is modified for
increasing productivity. Workforce is calculated and labours are recruited as per the
requirements. Products are thoroughly tested and sorted after production. In this way, production
quality can be managed.
Quality management: Six sigma, TQM, JIT and others can be used for maintaining quality of
products. JIT inventory is beneficial for reducing wastages and budget. This inventory is an
effective strategy for increasing efficiency and decreasing extra expenditures by reducing
inventory costs (Smith, 2019). TQM refers to a managerial approach that is helpful for achieving
long-term success by ensuring customer satisfaction. Members of a functional team contribute to
the product improvement process and works collaboratively for managing quality more
efficiently. There are four principles in six-sigma inventory such as recognise, describe,
evaluate, analyse, develop and control (Furterer, 2016). A management team of an organisation
recognises any issues related to the products or services in the first principle. They try to define
such issues to the leader of respective team. After that, the team measures the issue and analyse
the processes by which it can be resolved. In the last stage, they improve the process that was
causing such issues. The new processes are implemented for obtaining better results and the
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functional team monitors those processes regularly so that any unpleasant situation can be
avoided.
Marketing: marketing plays a key role in generating audiences for any brand. Marketing can be
conducted by following several processes such as social media advertisements. Investment in
both the above the line and below the line marketing technology is another important step for
product development. Social media marketing has achieved popularity for successfully creating
customer engagement. Marketing is important for growth of the product.
Distribution: Supply chain management is beneficial for reaching to the customers. In the
growth stage, customer demand increases significantly. In this condition, the functional team
becomes able to handle customer demands by managing supply chains.
These processes have been chosen for product development to position products in a cost-
effective manner. Production process should be developed for increasing productivity. These
inventories should be chosen for managing wastages and reducing extra costs. Six-sigma, TQM
and others are important strategies for managing quality of the products. Marketing should be
conducted for developing product awareness and supply chain management is important for
reaching to the consumers. Development of these processes will contribute to the product
development and growth stages.
5. Choosing one product line management choice:
An explanation of each of the processes applied for new product development
The new product-line spring summer collection is currently in the introduction stage of product
life cycle. The idea of launching spring-summer collection is generated by conducting research
on urban outfitters. Initial promotions have been created for the products, which will be
beneficial for the growth of the organisation. Updates of new products have been posted on the
social media pages and the company website for conducting initial promotion. In the growth
stage, social media marketing, segmentation targeting and positioning process, above the line
and below the line marketing technologies should be followed for obtaining better results.
Products should undergo continuous development. For example, Clothing of spring-summer
collection should be redesigned in this process. The company may add more products into the
product line. In this decline stage, sales are decreases significantly so that the organisation will
have to launch new products in the market for keeping its market position. For example, spring-
summer collection of ZARA is now on trend but this trend can be changed as per seasonal
changes. ZARA may bring new collection for rainy season, which will be helpful for increasing
sales of the company.
An explanation of how each stage of the process was applied and the techniques and methods
used
Product development process: After observing the success of ZARA winter collection, the
functional team has conducted a research based on the customer perception of winter collection.
The team has collaborated with famous designers for launching high quality and fashionable
products in the market. Additionally, the idea of self-service checkout system has been generated
from customer feedbacks posted over online sites (Holzbaur et al., 2016). Service development
process currently is in the product development stage.
Introduction: The latest product line of ZARA exists in this stage. The functional team has
created initial promotions for the products over social media platforms. The product line is still
undergoing some development stages such as products are being checked and sorted. On the
other hand, new self-service and other facilities will be introduced initially to the customers in
this stage.
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Growth: The functional team of ZARA is planning to invest more money into the marketing
activities. Below-the-line marketing technique and social media marketing will be used for
creating more cost-effective promotions. Nowadays, teens are becoming more familiar with the
online purchasing process (Tuten and Solomon, 2017). Usage of internet has been increased
significantly so that the organisation will have to invest more money in digital marketing. Stores
of this organisation may be decorated also with similar themes.
Maturity: The organisation should collect information about customer perception. They should
also collect information about the competitor companies and their products so that measures can
be taken. The organisation will have to follow TQM and six-sigma inventory so that quality of
the products can be managed.
Decline: Sales of products decreases significantly in this stage so that the organisation will have
to launch new products in the market, which will be beneficial for keeping market position. The
functional team will have to come up with new ideas for products.
In this way, ZARA will be able to manage its product line and services. These techniques will
help the organisation to increase market share and revenues.
Conclusion
The section concludes that the product life cycle is beneficial for understanding current position
of the new products. The stages of product development have been discussed briefly for
providing better guidance.
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Part B
Introduction
It is essential for organisations operating in any competitive market sector to present new
products and services in their product portfolio to enhance their competitive advantage in the
market. The following section will provide a detailed rationale regarding the fiscal validity for
Blacks to introduce a new solar powered camping tent in their product line.
Overview of the company
Established in 1863, Blacks Outdoor Retail is a private subsidiary belonging to the parent
organisation, JD Sports. The organisation is located in Bury, Manchester UK and employs 3500
employees within their business institution. The organisation provides camping gear, outdoor
furniture, skiing and other equipments necessary for outdoor and adventure sports (Blacks
Outdoor Retail, 2019). The company possesses a net worth of £36.9 million in 2018 and holds
cash value of £6.4 million. This venture has increased their profit through business collaboration
with several other business institutions that provide the target consumer group with similar
products such as camping goods and outdoor furniture.
The organisation provides relevant outdoor products to the consumers through three major
business brands- Millets, Ultimate Outdoors and the original Blacks. Blacks Outdoor Retail
provides products and services to educational institutions, charities, emergency services across
the country, the ministry of defence, corporate organisations, expedition groups as well as local
authorities. Since the institution specialises in outdoor products and furniture the company
mainly gathers profit from the sales of adventure and camping products in their product portfolio
(Blacks Outdoor Retail, 2019). It has been beneficial for the organisation to provide group and
corporate discounts to large groups placing bulk orders for various products from the institution.
New or improved product or a service proposed
The decision of the organisation to revamp their product portfolio and services in order to garner
better profit requires the marketing and product development team within the institution to
develop new products that are innovative and attractive within the price range of the target
consumer demographic. Since Blacks Outdoor Retail, provide their customers with a variety of
camping equipments and materials, it would be feasible for the organisation to develop a new
camping tent that is powered by solar panels. The organisation already possesses the technology
necessary to develop the new camping tents along with the integration of solar panels to provide
the product with sustainability. The uniqueness of the tent would be the presence of solar power
panels on the pole on the tent for diffusing power to the consumer and allowing the user to use
electricity generated from the detachable solar panels purchased with the tent. The tent would
be placed within the price range of £180- £200 depending on the size of the tent the consumer
wants to purchase.
Blacks Outdoor Retail would have to provide a wide range of consumers the opportunity to
purchase the tent thus designing the tent in three different sizes would be beneficial for the
company’s profitability.
The creation of a camping tent that would operate with solar power would prove beneficial for
the organisation through increased sales and improved brand image of the institution. As per the
study conducted by Kraemer et al. (2016), it can be stated that the integration of solar power in
camping activities are effective in generating better results and garners more consumer
satisfaction from the utilisation of products associated with solar energy. Since campers set their
bases in various obsolete areas without any provision of electricity, the presence of a solar
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powered tent would be beneficial for the customers in gathering the experience of camping and
outdoor activities.
Market opportunity for the proposed product or a service
As per the findings developed by Eagleston and Marion (2017), it can be stated that the
integration of solar powered tents in the product portfolio of Black Outdoor Retail would be
beneficial since the increase in camping activities among the UK customers have presented the
institution with the opportunity to generate better profits from their sales. The development of a
solar powered tent for camping would be effective in garnering popularity among the consumers.
Figure 2: Sale of camping equipments in UK
(Source: Statista, 2019)
In order to acquire maximum profit from the 14.7% sale of tents, Blacks Outdoor Retail would
have to integrate the facility of solar panels within the camping tent body. The structure would
be sustainable to the environment and reduce the carbon footprint left by campers within the
ecological framework. The growing concern of the campers regarding sustainability in
recreational activities and outdoor camping provides the business institution with the scope of
introducing their new product that would satisfy the concern and the demands of the consumer.
The solar powered tents would provide the customers with the opportunity to perform their
outdoor activities and enjoy the camping experience without the guilt of destroying the natural
environment of their camping grounds (Schelly, 2017).
Marketing strategy proposed
It is suggested for the management of Blacks Outdoor Retail to develop a holistic and
competitive marketing strategy that would attract the consumers and generate more profits from
their business performance. Considering the target demographic for the product is the youth and
outdoorsy individuals, it is essential for the organisation to develop awareness of their product
through internet marketing, cause marketing and word-of-mouth marketing technique for the
successful business interaction of the company. The organisation would be able to develop better
results in their business performance through advertising their solar powered tent as a necessary
item for the cause of developing sustainable camping experience. Through the presentation of the
solar powered tent as a product that would satisfy the cause of sustainable and eco-friendly
practice of camping activity, Blacks Outdoor Retail would be able to develop their brand image
in the competitive market sector by attracting more consumers and business contracts with global
teams associated with sustainable camping projects. The marketing department of Blacks
Outdoor Retail needs to price their solar powered tent effectively within the price bracket of
£180-200 for making their products easily accessible to the target consumers.
The organisation needs to place their products within the consumers’ consciousness efficiently
through appropriate advertising and social media influencer marketing. Internet marketing and
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word-of-mouth as marketing strategies would be beneficial for the business entity, as it would
allow the organisation to enhance the reach of their advertising technique at the lowest possible
cost (Kingsnorth, 2019). Social influencers and word-of-mouth from seasoned campers would
prove effective marketing tactic for the business in introducing their new product within their
portfolio and generating better results from transactions.
Synopsis of the competition and industry
As per the report generated by Campingandcaravanningclub.co.uk, (2019), it can be stated that
the camping industry of the UK has high competition among the various camping equipment
providers and equipment developers within the business sector. Blacks Outdoor Retail
experiences severe competition from leading tent manufacturers such as Airgo, Aventura,
Cabanon and others regarding the development of a solar powered tent that is fit for camping
activities in obsolete locations. The current trend of participating in “glamping” or glamorous-
camping is pertinent among the youth of the country who express interest in camping and
outdoor activities. The increasing number of music festivals and camping activities within the
country would prove beneficial for the organisations operating in the camping and tent
manufacturing business.
There has been a rise of 66.7% in camping trips among the youth of the country as well as an
average camper spends £405 every camping trip on tents and equipments (Outdoors, 2017).
Blacks Outdoor Retail needs to develop their business planning strategy accordingly considering
the growing competition among the tent manufacturing organisations operating within the
industry. In accordance to the study conducted by Cvelić-Bonifačić et al. (2017), it can be stated
that the future aspect of camping activities involve the development of solar powered caravans
and tents that accommodate luxurious and basic amenities for the consumers. In lieu with the
growing trend of glamorous camping activity, the companies operating in the camping sector
would have to develop their product portfolios accordingly for generating relevant consumer
satisfaction and profitability through their business performance.
Financial overview
As per the report created by Forbes.com, (2019), regarding the financial situation of the camping
industry of the UK, it can be stated that the holiday parks and camping sites generate an annual
revenue of £9.3 billion from the annual activity of providing camping equipments and sites for
interested consumers. The fact that an average consumer spends £405 per camping trip provides
the organisations functioning in the camping industry with the opportunity to develop products
within the price range that would attract more customers to their brand of products.
The Blacks Outdoor Retail organisation had experienced recent financial backlogs due to the
growing weather fluctuations and crackdown of environmental regulations on the sale of
camping equipments and knives. The inclusion of solar powered tents within the product
portfolio would prove beneficial for company in gaining profits from the business interactions
conducted within the £9.3 billion camping industry.
Capital/Investment required (If any)
Blacks Outdoor Retail already provides various solar powered tools, lanterns and other outdoor
utensils to their target customers. They possess the financial backup of JD Sports, a leading
sports manufacturing brand that develops innovative outdoor, sporting and camping equipments
as well as the net worth of £38.7 million equipments and product creation tactic within their
institution. The company also possess an extended overdraft arrangement of £6.8million for the
development and launch of new products. Thus, it can be stated that the existing finances of the
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company and the skilled labour within the company is sufficient for them to launch the new solar
powered tents in the competitive market sector.
Conclusion
It is observed from the above section that the decision of the Blacks Outdoor Retail management
to include solar powered tents within their product category would be beneficial for the
competitive advantage of the company. The existing resources within the institution are
sufficient for the company to create and launch the new solar powered tents within the
competitive camping equipments manufacturing industry of the UK.
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