By: MA. Nguyen Thi

Huong Giang

New

product

1. New-

to-the-

world

6. Cost

reductio

n

5. Re-positionin

gs

2. New-

to-the-

firm

4. Improvem

ents & revision to

existing products

3.

Addition

to

existing

product

lines

New-to-the-World product, or “Really-new product”: products are inventions that create a whole new market and was never seen/marketed before. (10% of new product)

New-to-the-firm products: products that take a firm into a category new to it. (20%)

Additions to existing product lines: or line extensions to the firm’s current products. (26%)

Improvements and revisions to existing products: current products are made better. (26%)

Re-positionings: products that are retargeted for a new use or application. (7%)

http://www.youtube.com/watch?v=JUNuznXtyaM

Cost reductions: new products simply replace existing products in the line, providing customer similar performance at a lower cost. (11%)

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Opportunity

identification

and selection

Concept

generation

Concept/proj

ect

evaluation

Development

Launch

3 main streams of activity feeding strategic planning for new product: Ongoing marketing planning Ongoing corporate planning Special opportunity analysis

Sorting of opportunities An underutilized resource A new resource An external mandate (stagnant market/

competition) An internal mandate (management/employees

desire to change)

Opportunity identification: the process of creatively recognizing opportunities. Why?

No firm wants to exploit all opportunities

Product Innovation Charter

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Creating new product ideas

Identifying problems that people or business have and suggesting solutions to them

Unsolicited ideas pouring from customers, potential ones, employees, etc.

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Problems/n

ew

opportunity

motivates

Concept

generati

on

Screening or pre-technical evaluation

Concept test all views come Full screen

Project evaluation

Quality Function Deployment, or:

Product description/ product definition/ Product Protocol--- List of customer needs.

Product protocol: agreement between various groups before technical work get started. The protocol should be in term of benefits, not the features only.

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Resource Preparation

The Major Body of Effort: 3 in 1: the item/service

itself + the marketing plan + a business

(financial) plan

Prototype

Comprehensive Business Analysis --- Important

“Go/No Go” decision

Concept evaluation continues along the way.

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Final “Go/No Go” decision

Critical and timely step

Market test

Activity of planning for Launch Management

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Corporate mission, platform planning, strategic

fit, non-corporate strategic come together in NPD process Product Innovation Charter

A PIC provide guidance to the business units on

the roles of innovation. It is a mission statement,

at a more micro level and adapted to new

product activities.

PIC allows delegation, financing and

assignments.

The background of a PIC includes key points

from a PEST analysis (Political, Economic, Social,

Technology) or situation analysis.

Questions addressed in this section of a PIC may

include:

› What is the business about?

› Why has this strategy been developed?

Core competencies

Focus is achieved by 4 strengths: Core Technology (Kimberley-Clark) Product experience ( Tan Hiep Phat

for soft-drink, Vissan for processed and canned foods)

Customer franchise (Honda scooter/ Kleenex tissues)

End-use experience (Saigon beer in HCM market, Halida beer in Hanoi market)

Relying solely on technology/customer’s stated want is risky dual-drive strategy

Technology Drivers

Market Drivers

Technology drivers: Firm with superior technical skills turning technical

specifications into product features that satisfy market needs

Market drivers: Customer group & end-use Distributors & retailers

Questions addressed at this stage of a PIC may include: What are your company’s core competencies? What is your company’s competitive advantage and

the value that your company can bring to the target market?

What are your advantages in relation to your target market’s needs, wants, and consumption trends?

What are your company’s marketing capabilities?

Any complete PIC need both goals and

objectives.

Goals & Objectives can be in 3 types:

› Profit

› Growth

› Market status

Degree of Innovativeness:

First to market: pioneering

Adaptive product: taking one’s own or a competitive product

and improving it.

Imitation or emulation

Timing:

First

Quick second

Slower

Late

Miscellaneous guidelines: special guidelines of product’s

cost, quality, brand and so forth.

MacBook Pros is Apple product which comes

with high performance and high speed when

you use for work. This Apple product is really

suitable for you who need the best ingredient

and have hardware that supports their

performance. This Apple Thunderbolt MacBook

Pros come with Core i5 and i7 CPU that adding

in this notebook. This Macbook will give graphic

result that suitable with you want.

Gathering Ready-made source

Using Managed process by the

NPD team

New Products Employees› Technical: R&D, engineering, design

› Marketing and manufacturing

End Users

Resellers, Suppliers, Vendors

Competitors

The Invention Industry (investors, etc. http://www.abc.net.au/tv/newinventors/ )

Idea exploration firms and consulting engineers

Miscellaneous (continued)

Miscellaneous Categories› Consultants

› Advertising agencies

› Marketing research firms

› Retired product specialists

› Industrial designers

› Other manufacturers

› Universities

› Research laboratories

› Governments

› Printed sources

› International

› Internet

Lead users: customers associated with a significant current trend, have the best understanding of the problems and expect to gain significantly from solutions. How to identify lead users? http://www.youtube.com/watch?v=FnU0phMaVm0

› Is it good to ask customers what they want?

› Being a customer, of your competitor’s products and your own!

› Some companies provide toolkits for user innovation, such as mobile phone games, Lego toys, sport equipment. (Reading on the Website)

Open innovation: a new method to find out creative ideas and concept, by outsourcing or seeking partners, externally.› Select the best partner(s), in terms of

technological, strategic and relational features.

› High level of trust

› P&G is one of the successful users of open innovation, by adopting new technology from outside. Unilever, HP, Toyota, LG, MyStarbucksIdea, etc.

› http://www.innovationexcellence.com/blog/2012/08/13/40-examples-of-open-innovation-crowdsourcing/

› http://www.customerthink.com/blog/10_examples_of_open_innovation_in_high_tech_and_b2b_companies

› http://mystarbucksidea.force.com/

HOW TO EVALUATE DIFFERENT BUSINESS OR PRODUCT IDEAS???

There is no basic need for the new product

The new product did not meet customer needs

The new product idea is not properly communicated

http://www.dailyfinance.com/photos/top-25-biggest-product-flops-of-all-time/#photo-3

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› What is a new product concept? A statement about anticipated product features (form or technology) that will yield selected benefits.

› The purposes of Concept Testing: Concept Testing is part of the prescreening process

First purpose of a concept test is to identify the very poor concept so it can be eliminated

If the concept passes the first reaction, a second purpose is to estimate the sales or trial rate that the product would enjoy – a sense of market share or general range of revenue dollars.

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› The purposes of Concept Testing:

The buying intention question appears in almost every

concept test. The most common format for purchase intention is the classic five-point question: “How likely

would you buy a product like this, if we made it?”

1. Definitely would not buy

2. Probably would not buy

3. Might or might not buy

4. Probably would buy

5. Definitely would buy

The number of people who definitely buy or probably

would buy are usually combined and used as an indicator of group reaction, this is called top-two-boxes score.

The third purpose is to help develop the idea, not just test

it!30

Prepare the Concept Statement: a concept statement states a difference and how that difference benefits the customer or end-users. For example “This new refrigerator is built with modular parts; consequently, the consumer can arrange the parts to best fit a given kitchen location and then rearrange them to fit another location”.

Format

Commercialized Concept Statement

Define the Respondent Group

Select the Response Situation

Prepare the Interviewing Sequence

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“Trà Xanh Không Độ cho người tiểu đường có nguồn gốc thiên nhiên,

với tác dụng giải nhiệt cao, độ ngọt vừa phải và sử dụng loại đường dành riêng cho

người tiểu đường. Trà xanh không độ cho người tiểu đường sẽ là thức uống thích

hợp với khách hàng ăn kiêng và quan tâm đến lượng đường trong cơ thể”

Take an example of a simple situation: You are deciding what to do on this coming break holiday

Values

Factors 4 points 3 points 2 points 1 points

Degree of fun Much Some Little None

Number of people Over 5 4 to 5 2 to 3 Under 2

Affordability Easily Probably Maybe No

Student’s capability Very

good

Good Some Little

Student’s scorings Skiing Boating Hiking Fishing

Fun 4 3 4 4

People 4 4 2 3

Affordability 2 3 4 4

Capability 1 4 3 4

Total 11 14 13 1532

The first (and most common) method of forecasting new product depletions is historical review. › If a company has introduced similar new

products into similar markets in the past, these histories can often be good predictors of future outcomes.

› If a company has no such history, then histories of similar new products introduced by competitors or other companies can serve as historical guidelines.

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A second method of forecasting new product success is the test market. › The new product is developed and

introduced into one or more test markets. Actual store sales and market shares are tracked via Nielsen or IRI, or data from retailers in some instances.

› Often this sales tracking is supplemented by survey-based tracking of consumer awareness, trial, usage, and repeat purchase patterns.

› In some instances, consumer diary panels or purchase panels are used to track consumer trial, repeat purchases, and share.

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A third method of forecasting is before-after retail simulation. A sample of target audience consumers is presented with simulations showing the in-store retail environment and a realistic display of all the major brands in the category. The consumer is asked to choose or “purchase” brands as they normally would, or as they might on their next 10 purchases. › The new product is missing from the simulation during this

“before” measurement.

› Then the consumer is exposed to the new product concept and/or advertising that conveys the new product concept.

› Later, the consumer sees the exact same simulated display (except now it contains the new product) and is asked to make the same choices or purchase decisions as before. So, we have market shares for all brands in the category before the new product is introduced, and the same data after the new brand is introduced.

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Market Segmentation

Market Targeting

Differentiation and Positioning Strategy

Marketing Mix (4Ps)