New Products and Services
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Transcript New Products and Services
Developing & Managing
Products
Chapter 11
New Product Development Process
New Product Strategy
Idea Generation
Idea Screening
Business Analysis
Development
Test Marketing
Commercialization
New-product Strategy
Link product
development to MKT
strategy
3M
Identify markets and
strategic roles
Environmental
scanning
SWOT analysis
Source: http://www.logotecs.com
Idea Generation
Customers
Employees
Distributors
Vendors
Competitors
Research &
Development
Consultants
Source: http://www.clker.com/clipart-9721.html
Idea Screening
First filter
Committee Reviews
Concept test
Business Analysis
Last checkpoint before capital is
committed
Look at product and marketing strategy
needed to commercialize it
Preliminary figures
Development
“Paper into prototype”
Testing against standards
Work on marketing mix
Team-based analysis
Internet
Customer panels
Market Testing
Company chooses a specific market, based
on criteria
Advantages
Disadvantages
Internet
Commercialization
Positioning and launching a product
Most expensive step
Slotting fee
Failure fee
Diffusion of Innovation
Innovators (2.5%)
Early adopters (13.5%)
Early majority (34%)
Late majority (34%)
Source: http://tutor2u.net
Laggards (16%)
Diffusion of Innovation
Factors for Adoption
Complexity
Compatibility
Relative advantage
Observability
Trialability
Implications
The Product Life Cycle
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Introduction Stage
Create awareness and encourage
customers to try the product
Advertising
Primitive demand
Distribution issues
Pricing issues
Growth Stage
Rapid increases in sales
Competition
Advertising
Selective demand
Who is buying?
Distribution
Maturity Stage
Slowing sales and decreasing profits
Marketing strategy
Hold market share
Decline Stage
Sales and profits drop
Marketing strategy
Deletion
Harvesting
Product Cycle Dimensions
Length
Shape
Generalized product
High learning product
Low learning product
Fashion product
Fad product
Why do New Products Fail?
Insignificant “point of difference”
Incomplete market and product definition
before development starts
Too little market attentiveness
Poor execution of marketing mix
Bad timing
No economical access to buyers