Transcript NCIA New Product Innovation

New Product Innovation
National Correctional Industries
Association Enterprise 2004
March 23, 2004
Agenda
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Product Development
Market Research
Concept Testing
Prototype Development
Market Testing
Product Launch
Discussion
Why New Products?
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New product development is critical to
long-term success
Approximately one-third of the revenue a
business generates is coming from
products they did not sell five years ago
Changing environment creates new
demands and needs
Product Development
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Must be alert to quickly develop
opportunities
Focus on markets or product categories
consistent with organization’s objectives,
resources, capabilities and strengths
Securing a competitive advantage
Industrial New Product Ideas
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Company sources other than R&D
Analysis of the competition
Research & Development
Product users
Supplier suggestions
Product user research
Published information
36.2%
27.0%
24.3%
15.8%
12.5%
10.5%
7.9%
New Products
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A way of getting new and keeping old
customers
Effective way of obtaining a competitive
advantage
Source of growth and excitement
New Product Categories
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New to the world products
New product lines
Product line extensions
Improvements and revisions to existing
products
Repositionings
Cost reductions
Product Development Process
Product
Launch
Test
Marketing
Prototype
Development
Concept
Testing
Market research
and
Opportunity scan
Marketing
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Very important to product development
success
Key to successful marketing is imaginative,
effective, creative communication
Find a need and fill it.
Mutually beneficial exchange relationships
Non-profit organizations have sometimes
difficult task
Marketing Strategies
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Increase the number of customers
Increase the average transaction
Increase the frequency of repurchase
Marketing Concepts
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Consumer orientation
Customer service orientation
Profit orientation
Society
Marketing Mix
Price
Product
Placement
Promotion
Market Research
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Who is my target audience?
Are there enough members of this target group
to make the business worthwhile?
How large is the potential market and how much
of that potential market can I capture?
Who is my competition and what would make
someone choose my product over their current?
Market Opportunity and Threats
Societal Focus
•Population Shifts
•Values
•Attitudes
•Competition
•Trends
Technological
Development
•Advance in
technology
•Market receptiveness
to technology
Economic Realities
•GNP
•Disposable Income
•Discretionary Income
Legal & Regulatory
Condition
•Laws
•Regulations
Market Placement
Identify target markets
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Size and growth potential
Ability and ease of reaching segment
Good fit with organizational objectives
Greatest revenue generation with least
investment
Market Placement
Determine opportunity
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Segment size
Annual usage potential
Anticipated annual growth rate
Margin
Value in use
Evaluate competition
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Strengths/Limitations
Implications
Market Research – Pricing Strategies
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Goal is to achieve a target profit
Can you hold a product’s manufacturing
costs down to less than 25% of its
perceived value?
Estimating manufacturing costs
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Obtain price quotes from several suppliers
Concept Testing
Determine
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Critical success factors
Financial objectives
Marketing mix strategies
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Product, Pricing, Promotion, Placement
Marketing plan initiatives
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Activity, Budget, Timing
Prototype and Test Marketing
Survey end-users
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Do you prefer this product over your current
product?
Does this product meet the need you thought
it would?
Does the way the product works provide an
important benefit?
Promotion and Product Launch
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Publicity
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Trade journals
Conferences
Personal selling
Word of mouth
Reasons For New Product Failures
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Poor marketing research
Technical problems
Insufficient marketing effort
Bad timing
Marketing Plan
Audit
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Challenge and refine assumptions from current
plan
Evaluate success for input into next year’s plan
Revise plan for new year incorporating
marketplace learnings, marketing insights and
current plan successes
Summary
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New product development drives growth
Market research is critical to the success
of a new product launch
Market research is a continuous process as
customer needs, your business and the
environment changes