Product Management

New Products

Product Life Cycle New Product Development Process Innovations and Their Diffusion

Product Life Cycle

Product Life Cycle: Introduction

Characteristics– Low Sales, High Costs, Losses, Few

Competitors, and Few Customers Marketing Mix

– Basic Product– Penetration v. Skimming Price– Build Distribution– Build Awareness

Product Life Cycle: Growth

Characteristics– rapid growth in sales, growing competitors,

profits peak late in this stage Marketing Mix

– Some product extensions– Penetration pricing– Build distribution– Build awareness

Product Life Cycle: Maturity

Characteristics– Sales peak, low cost per customer, high profits,

stable competitor and customer base

Marketing Mix– Diversify product– Competitive pricing– Build distribution– Selective demand stimulation

Product Life Cycle: Decline

Characteristics– Declining sales, declining profits, declining

competitors, laggard customers

Marketing Mix– Trim product line– Cut price– Selective distribution– Reduce advertising: milking/harvest strategy

New Product Development Process Idea Generation Idea Screening

New Product Development Process

Concept Development and Testing

New Product Development Process

Marketing Strategy Development– Target market, positioning, and short term

goals– Price, distribution, and marketing budget– Long-term forecasts for sales, profits, and

marketing mix

New Product Development Process Product Development

– Bench Test Test Marketing Commercialization

Innovations

Continuous: blue power crystals Dynamically Continuous: Somewhat

disruptive (Flash Memory, PDA, Blue Tooth)

Discontinuous: television, PC, ?