Download - New Product Innovation
New Product New Product InnovationInnovation
National Correctional National Correctional Industries Association Industries Association
Enterprise 2004Enterprise 2004March 23, 2004
AgendaAgenda Product DevelopmentProduct Development Market ResearchMarket Research Concept TestingConcept Testing Prototype DevelopmentPrototype Development Market TestingMarket Testing Product LaunchProduct Launch DiscussionDiscussion
Why New Products?Why New Products? New product development is critical to New product development is critical to
long-term successlong-term success Approximately one-third of the Approximately one-third of the
revenue a business generates is revenue a business generates is coming from products they did not sell coming from products they did not sell five years agofive years ago
Changing environment creates new Changing environment creates new demands and needsdemands and needs
Product DevelopmentProduct Development Must be alert to quickly develop Must be alert to quickly develop
opportunitiesopportunities Focus on markets or product Focus on markets or product
categories consistent with categories consistent with organization’s objectives, resources, organization’s objectives, resources, capabilities and strengthscapabilities and strengths
Securing a competitive advantageSecuring a competitive advantage
Industrial New Product IdeasIndustrial New Product Ideas Company sources other than R&D 36.2%Company sources other than R&D 36.2% Analysis of the competition 27.0%Analysis of the competition 27.0% Research & Development 24.3%Research & Development 24.3% Product users 15.8%Product users 15.8% Supplier suggestions 12.5%Supplier suggestions 12.5% Product user research 10.5%Product user research 10.5% Published information 7.9%Published information 7.9%
New ProductsNew Products A way of getting new and keeping old A way of getting new and keeping old
customerscustomers Effective way of obtaining a Effective way of obtaining a
competitive advantagecompetitive advantage Source of growth and excitementSource of growth and excitement
New Product CategoriesNew Product Categories New to the world productsNew to the world products New product linesNew product lines Product line extensionsProduct line extensions Improvements and revisions to Improvements and revisions to
existing productsexisting products RepositioningsRepositionings Cost reductionsCost reductions
Product Development Product Development ProcessProcess
Market researchand
Opportunity scan
ConceptTesting
PrototypeDevelopment
TestMarketing
Product Launch
MarketingMarketing Very important to product development Very important to product development
success success Key to successful marketing is imaginative, Key to successful marketing is imaginative,
effective, creative communicationeffective, creative communication Find a need and fill it.Find a need and fill it. Mutually beneficial exchange relationshipsMutually beneficial exchange relationships Non-profit organizations have sometimes Non-profit organizations have sometimes
difficult taskdifficult task
Marketing StrategiesMarketing Strategies
Increase the number of customersIncrease the number of customers Increase the average transactionIncrease the average transaction Increase the frequency of repurchaseIncrease the frequency of repurchase
Marketing ConceptsMarketing Concepts
Consumer orientationConsumer orientation Customer service orientationCustomer service orientation Profit orientationProfit orientation SocietySociety
Marketing MixMarketing Mix
Product
Price
Promotion
Placement
Market ResearchMarket Research Who is my target audience?Who is my target audience? Are there enough members of this target Are there enough members of this target
group to make the business worthwhile?group to make the business worthwhile? How large is the potential market and how How large is the potential market and how
much of that potential market can I much of that potential market can I capture?capture?
Who is my competition and what would Who is my competition and what would make someone choose my product over make someone choose my product over their current?their current?
Market Opportunity and Market Opportunity and ThreatsThreats
Economic Realities•GNP•Disposable Income•Discretionary Income
Legal & Regulatory Condition•Laws•Regulations
Societal Focus•Population Shifts•Values•Attitudes•Competition•Trends
Technological Development•Advance in technology•Market receptiveness to technology
Market PlacementMarket Placement
Identify target marketsIdentify target markets Size and growth potentialSize and growth potential Ability and ease of reaching segmentAbility and ease of reaching segment Good fit with organizational objectivesGood fit with organizational objectives Greatest revenue generation with least Greatest revenue generation with least
investmentinvestment
Market PlacementMarket PlacementDetermine opportunityDetermine opportunity
Segment sizeSegment size Annual usage potentialAnnual usage potential Anticipated annual growth rateAnticipated annual growth rate MarginMargin Value in useValue in use
Evaluate competitionEvaluate competition Strengths/LimitationsStrengths/Limitations ImplicationsImplications
Market Research – Pricing Market Research – Pricing StrategiesStrategies
Goal is to achieve a target profitGoal is to achieve a target profit Can you hold a product’s Can you hold a product’s
manufacturing costs down to less manufacturing costs down to less than 25% of its perceived value?than 25% of its perceived value?
Estimating manufacturing costsEstimating manufacturing costs Obtain price quotes from several Obtain price quotes from several
supplierssuppliers
Concept TestingConcept Testing
DetermineDetermine Critical success factorsCritical success factors Financial objectivesFinancial objectives Marketing mix strategiesMarketing mix strategies
Product, Pricing, Promotion, PlacementProduct, Pricing, Promotion, Placement Marketing plan initiativesMarketing plan initiatives
Activity, Budget, TimingActivity, Budget, Timing
Prototype and Test Prototype and Test MarketingMarketing
Survey end-usersSurvey end-users Do you prefer this product over your Do you prefer this product over your
current product?current product? Does this product meet the need you Does this product meet the need you
thought it would?thought it would? Does the way the product works provide Does the way the product works provide
an important benefit?an important benefit?
Promotion and Product Promotion and Product LaunchLaunch
PublicityPublicity Trade journalsTrade journals ConferencesConferences
Personal sellingPersonal selling Word of mouthWord of mouth
Reasons For New Product Reasons For New Product FailuresFailures
Poor marketing researchPoor marketing research Technical problemsTechnical problems Insufficient marketing effortInsufficient marketing effort Bad timingBad timing
Marketing PlanMarketing PlanAudit Audit
Challenge and refine assumptions from Challenge and refine assumptions from current plancurrent plan
Evaluate success for input into next Evaluate success for input into next year’s planyear’s plan
Revise plan for new year incorporating Revise plan for new year incorporating marketplace learnings, marketing marketplace learnings, marketing insights and current plan successesinsights and current plan successes
SummarySummary New product development drives New product development drives
growthgrowth Market research is critical to the Market research is critical to the
success of a new product launchsuccess of a new product launch Market research is a continuous Market research is a continuous
process as customer needs, your process as customer needs, your business and the environment business and the environment changeschanges