Transcript New product - Seattle Central College

New-Product Development and
Product Life-Cycle Strategies
9-1
Improving New-Product Success
To create successful new products, the
company must:
Understand its consumers, markets, and
competitors
AND
Develop products that deliver superior value to
customers.
9-2
New Product Idea Generation
Systematic Search for New Product Ideas
Obtained From Employees and Also From:
Customers
Competitors
Distributors
Suppliers
9-3
New Product Screening
Estimate
Market Size
Product Price
Development Time & Costs
Manufacturing Costs
Rate of Return
Evaluate the idea against a set of general
company criteria.
9-4
New Product Concept Development
1. Develop New Product Ideas
into Alternative Detailed
Product Concept
2. Concept Testing - Test the
New-Product Concepts with
Groups of Target Customers
3. Choose the One That Has the
Strongest Appeal to Target
Customers
9-5
New Product Marketing Strategy
Target Market
Marketing Mix Strategy
Marketing Budget
Sales & Profit Goals
Review of above to See if
They Satisfy Company Objectives
9-6
New Product Test Marketing
Test:
Positioning strategy
Advertising
Distribution
Pricing
Branding
Packaging
Budget levels
9-7
Product Life Cycle (Fig. 9-2)
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Introduction
Growth
Maturity
Decline
Losses/
Investments ($)
Sales and Profits Over the Product’s Life From Inception to
Demise
9-8
Introduction Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Low sales
Costs
High cost per customer
Profits
Negative or low
Marketing Objectives
Create product awareness and trial
Product
Offer a basic product
Price
Usually is high
Distribution
High distribution expenses
Advertising
Spending is high to inform consumers
9-9
Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Rapidly rising sales
Costs
Average cost per customer
Profits
Rising profits
Marketing Objectives
Maximize market share
Product
Offer new product features and models
Price
Remain where they are or fall slightly
Distribution
Increase number of distribution outlets
Educating consumers and meeting
competition
Advertising
9-10
Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Begin to slow
Costs
Low cost per customer
Profits
Product
High profits, then lower profits
Maximize profits while defending
market share
May modify product
Price
May decline
Distribution
Build more intensive distribution
Advertising
Stress brand differences and benefits
Marketing Objectives
9-11
Maturity Stage of the PLC
Company tries to increase consumption of
the current product
Changing characteristics such as quality,
features, or styles to attract new users
Company tries to improve sales by changing
one or more marketing mix elements
9-12
Decline Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Declining sales
Costs
Low cost per customer
Profits
Declining profits
Marketing Objectives
Reduce expenditure and maintain,
harvest, or drop the product
Product
Phase out weak items
Price
Cut price
Distribution
Selective: phase out unprofitable outlets
Reduce to level needed to retain
hard-core loyal customers
Advertising
9-13
Pick a soft drink, car, or food product,
and trace the product’s life cycle.
Project when the product might enter a
decline stage and discuss strategies to
reverse the decline.
9-14