Download - Chapter 20 intro new market offer
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1 Introducing New
Market Offerings
Arnold A. Tolentino
7 February 2014
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5 Things to Know in Introducing
New Market Offerings
1
Challenges
2
Organizational structures
& processes
3
Stages in Development
4
Best ways to manage NPD
5
Consumer Adoption
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Continuous Innovation
to seize new market opportunities and
to create new choices
New Product Success
Unique, superior product
Well-defined product concept
Produce locally, think globally
New Product Failure
Accept as part of the “game” to be
successful
Challenges
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5 Types of New Products
1
New to the World
2
Additions
3
Improvements
4
Repositioning
5
Cost reductions
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Organizational Structures for the
Development Process
New Product
Management
Budget R & D
Marketing
SVP – Product
Development
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What is a Venture Team?
A venture team is a cross-
functional group charged with
developing a specific product or
business; intrapreneurs are
relieved of other duties and
provided a budget and time
frame.
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Criteria for Staffing Venture
Teams
Desired team leadership
style
Desired level of leader
expertise
Team member skills and
expertise
Level of interest in concept
Potential for personal
reward
Diversity of team members
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New-Product Development
Decision Process
DROP
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1
Idea
Genera-
tion
Is it worth
considering
?
2
Idea
Screen-
ing
Is it
compatible
with
corporate
objectives?
3
Concept
Dev’t &
Testing
Can we find
a good
concept
consumers
say they
would try?
4
Mktg
Strat
Dev’t
Can we find
a cost-
effective,
affordable
mktg
strategy?
5
B’ness
Analysis
Will this
product
meet our
businesss
goals?
Y Y Y Y Y
N N N N N
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New-Product Development
Decision Process
DROP
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6
Prod
Dev’t
Have we
got a
technically
and
c’mercially
sound
product?
7
Market
Testing
Have
product
sales met
xpectations
?
8
Commer
cializa-
tion
Are product
sales
meeting
xpectations
?
Y Y Y Lay
Future
Plans
Send it
back for
prod dev’t?
Modify the
prod or
mktg
program?
Y
Y
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New-Product Development
Decision Process
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Stages in Managing the
Development Process
1
Ideas
2
Concept to Strategy
3
Development to
Commercialization
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Ideas : 10 Ways to Find Them
1. Run informal sessions
2. Technical people to putter on pet projects
3. Customer brainstorming as part of plant tours
4. Survey your customers
5. Undertake “fly on the wall” research
6. Use iterative rounds with customers
7. Do keyword search to scan trade publications
8. Treat trade shows as intelligence missions
9. Have employees visit supplier labs
10. Set up an idea vault
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Ideas : How to Obtain from
Customers
Observe how they use the product
Ask about their problems with the
products
Ask about their dream products
Use advisory board or a brand
community of enthusiasts to
discuss product
Challenge them to change or
improve your product
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Concept Testing
Communicability and
believability
Need level
Gap level
Perceived value
Purchase intention
User targets,
purchase occasions,
purchasing frequency
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Marketing Strategy
First Stage:
Target market’s size,
structure, and behavior
Second Stage:
Planned price, distribution,
and promotion for year one
Third Stage:
Long-run sales and profit
goals and marketing-mix
strategy over time
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Test Market Decisions
Select test cities
Which cities
Length of test
What information to
collect
What action to take
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What is Adoption?
Adoption is an individual’s decision to
become a regular user of a product.
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5 Stages in the Adoption
Process
Awareness (aware but lacks info)
Interest (seek info)
Evaluation (consider to try product)
Trial (try to improve his estimate of its value)
Adoption (decide as regular user)
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In Summary Company, to be competitive,
must welcome all ideas for
consideration to develop
appropriate new products;
New products to be developed
must passed series of processes
and rigid market tests; the
challenge is on marketeer’s
ability to ensure product
adoption;
The consumer-adoption process
may be influenced by many
factors beyond marketeer’s
control, including consumers
willingness to try new products.
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