Marketing of High Tech Products

Assignment

Submitted by:

Mitul Bhuwania

10PG (J) 20

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New Product Development at Boeing

INTRODUCTION:-

Boeing case basically talks about the development of a new midsized jet, the

“Sonic Cruiser,” which will travel 15-20% faster than existing commercial

jets. It was a high cost aircraft and targeting the premium segment and

expected to cost $10 billion to develop.

With the future being uncertain, Boeing forecasted that the world aircraft

fleet would be double by 2021.

Boeing always believes that company should create a new aircraft every 12

to 15 years, this will help in retaining the skilled and experience employees

otherwise they leave the job or retire and the up coming , new employees

would not have the knowledge and experience passed on to them.

The case, thus focuses on the development of the Sonic Cruiser, the gamut

of processes that the New Product Development of this airplane and various

reason of failing of the project and stopping the project of Sonic Cruiser

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Questions related to the case:

Q1. Describe the New Product Development process at Boeing?

• The concentration of Boeing was to develop a new product which can

travel 15% to 20% faster then other airlines. The product development

was centered on introduction of new aircraft named as Sonic Cruiser

through R&D.

• The idea of Sonic Cruiser failed as it was an expensive product and it will

reflect in increased ticket price. Since it is faster plane then earlier

airliners, the maintenance cost as well as fuel cost will also increase,

subsequently all this reason will lead to ticket cost.

• The overall production development of Boeing was good, but when it

comes to Sonic Cruiser, lack in meeting demand, delays in supply and the

most important Economy analysis was not considered, these results in big

failure of the project.

Q2. What aspect of marketing research is missing in this case?

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In this case, there are several aspects of Marketing Research that are

missing. Some of them are:-

a) Boeing did not use any sampling technique like simple random

sampling etc.

b) Questionnaires would have provided vital information from suppliers

and customers, passenger. Questionnaire wasn’t used as a research

tool.

c) Boeing did follow any research methodology in designing of the

product, if this would have been done; it would have helped Boeing to

continue its production with out getting delay in meeting customer

demand and production of aircraft flow smoothly.

d) Launching time of the product was bad as during those times the

world was facing economy crisis, airline industries were going in loss

etc, lack of market analysis caused trouble to Boeing.

e) Budget estimation of the project was not prepared properly by the

upper management of Boeing.

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Q3. How might Boeing share some of the great risk inherent in such a major

product development venture?

Answer 3.

Since the Sonic Cruiser of Boeing, was one of high investment and time/labour

intensive, the risks associated with it were very high

Since the economic downturn and September 9/11 were responsible for the

decline in air travel, Boeing could outsource their marketing research to an

external agency and efficiently conduct a complete market analysis, to

decide upon the timing for the launch.

Boeing could leverage its Sonic Cruiser concept aircraft, by using its earlier

successful models as an indicator of product quality and efficiency.

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