key concepts. the new-product development process long-term commitment company-specific approach...
TRANSCRIPT
The New-Product Development Process
Long-term commitmentLong-term commitment
Company-specific approachCompany-specific approach
Capitalize on experienceCapitalize on experience
Establish an environmentEstablish an environment
New Product Success Factors
New-Product Development Process
New-Product StrategyNew-Product Strategy
Idea GenerationIdea Generation
Idea ScreeningIdea Screening
Business AnalysisBusiness Analysis
DevelopmentDevelopment
Test MarketingTest Marketing
CommercializationCommercialization
New ProductNew Product
Idea GenerationWhere Good Product Ideas Come From
Customers
Employees
Distributors
Competitors
Vendors
R & D
Consultants
Sources ofSources ofNew-ProductNew-Product
IdeasIdeas
Tips for Successful New Product Development
Disperse R & D around the globe
Keep teams small and empower employees
Flatten hierarchy
Encourage generation of crazy new ideas
Welcome mistakes
Business AnalysisTo Ensure Project is Feasible
Considerations Considerations in in
Business Business Analysis StageAnalysis Stage
Considerations Considerations in in
Business Business Analysis StageAnalysis Stage
Demand
Cost
Sales
Profitability
Product DevelopmentDifferent Aspects of Development
Creation of prototype
Marketing strategy
Packaging, branding, labeling
Promotion, price, and distribution strategy
Manufacturing feasibility
Final government approvals if needed
Test Marketing
TestMarketing
TestMarketing
The limited introduction of
a product and a marketing
program to determine the
reactions of potential
customers in a market
situation.
Alternatives to Test Marketing
Single-source research using supermarket scanner data
Simulated (laboratory) market testing
Online test marketing
CommercializationBringing Product to Market
ProductionProduction
Inventory BuildupInventory Buildup
Distribution ShipmentsDistribution Shipments
Sales TrainingSales Training
Trade AnnouncementsTrade Announcements
Customer AdvertisingCustomer Advertising
Why New Products Fail
No discernible BENEFITS POOR MATCH between features
and customer desires Overestimation of market SIZE Incorrect POSITIONING PRIE too high or too low Inadequate DISTRIBUTION Poor PROMOTION INFERIOR product
Factors in Successful New ProductsFactors in Successful New Products
Match between product and market needs
Different from substitute products
Benefit to large number of people
Success Factors
Listening to customers
Producing the best product
Vision of future market
Strong leadership
Commitment to new-product development
Project-based team approach
Getting every aspect right
The Spread of New The Spread of New ProductsProducts
The diffusion process and how new products are adopted
Categories of Adopters
LaggardsLaggards
Late MajorityLate Majority
Early MajorityEarly Majority
Early AdoptersEarly Adopters
InnovatorsInnovators
Product Characteristics and how fast new products are adopted
TrialabilityTrialability
ObservabilityObservability
Relative AdvantageRelative Advantage
CompatibilityCompatibility
ComplexityComplexity
Marketing Implications of the Adoption Process
Direct fromMarketer
Direct fromMarketer
Word of MouthWord of Mouth
CommunicationAids the
Diffusion Process
CommunicationAids the
Diffusion Process
Product Life Cycle
ProductLife Cycle
ProductLife Cycle
A concept that provides a
way to trace the stages of
a product’s acceptance,
from its introduction
(birth) to its decline
(death).
Product Life Cycle
Time
Do
llar
s
Profits
SalesSalesIntroductoryIntroductoryStageStage
GrowthGrowthStageStage
MaturityMaturityStageStage
DeclineDeclineStageStage
0
Introductory Stage
High failure rates Little competition Frequent product modification Limited distribution High marketing and production
costs Negative profits with slow sales
increases Promotion focuses on awareness
and information Communication challenge is to
stimulate primary demand
Growth Stage
Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising
of the differences between brands
Wider distribution
Maturity Stage
Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important
roles Heavy promotions to consumers and
dealers Marginal competitors drop out Niche marketers emerge
Decline Stage
Long-run drop in sales Large inventories of
unsold items Elimination of all
nonessential marketing expenses
“Organized abandonment”
Diffusion Process and PLC Curve
Innovators
Early adopters
Early majorityLate majority
Laggards
ProductProductlife cyclelife cyclecurvecurve
Introduction Growth Maturity Decline
Sal
es
DiffusionDiffusioncurvecurve
Product Life Cycles
Time
INTRODUCTION GROWTH MATURITY DECLINE
ProductStrategy
Distribution
Strategy
PromotionStrategy
PricingStrategy
Limited modelsFrequent changes
More modelsFrequent changes.
Large number of models.
Eliminate unprofitable
models
LimitedWholesale/
retail distributors
Expanded dealers. Long-term relations
Extensive.Margins drop.Shelf space
Phase out unprofitable
outlets
Awareness. Stimulate
demand. Sampling
Aggressive ads.Stimulatedemand
Advertise. Promote heavily
Phase outpromotion
High to recoupdevelopment
costs
Fall as result ofcompetition &
efficient production.
Prices fall (usually).
Prices stabilize at low level.
Sa
les