Post on 06-Aug-2015
Introducing New Market Offerings
Marketing Management, 13th ed
20
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-2
Chapter Questions
• What challenges does a company face in developing new products and services?
• What organizational structures and processes do managers use to manage new-product development?
• What are the main stages in developing new products and services?
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Chapter Questions (cont.)
• What is the best way to manage the new-product development process?
• What factors affect the rate of diffusion and consumer adoption of newly launched products and services?
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Johnson & Johnson Emphasizes New Product Development
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Categories of New Products
New-to-the-world
Cost reductions
New product lines
Additions
Improvements
Repositionings
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The World’s Most Innovative Companies
• Apple• Google• Toyota• General Electric• Microsoft• Procter & Gamble• 3M• Walt Disney
• IBM• Sony• Wal-Mart• Honda • Starbucks• Target• BMW• Samsung
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Seven Notions of Innovation
• See the future through the eyes of your customer
• Intellectual property and brand power are key assets
• Use digital technology to create tools for customers
• Build a championship team• Innovation is a state of mind• Speed is critical, so push your organization• Partner up if you’re not the best
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Factors That Limit New Product Development
• Shortage of ideas
• Fragmented markets
• Social and governmental constraints
• Cost of development
• Capital shortages
• Faster required development time
• Shorter product life cycles
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Table 20.4 Finding One Successful New Product
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What is a Venture Team?
A venture team is a cross-functional group charged with developing a
specific product or business; intrapreneurs are relieved of other
duties and provided a budget and time frame.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-11
Criteria for Staffing Venture Teams
• Desired team leadership style• Desired level of leader
expertise• Team member skills and
expertise• Level of interest in concept• Potential for personal reward• Diversity of team members
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Figure 20.2 The New Product Development Decision Process
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Ways to Find Great New Ideas
• Run informal sessions with customers
• Allow time off for technical people to putter on pet projects
• Make customer brainstorming a part of plant tours
• Survey your customers
• Undertake “fly on the wall” research to customers
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-14
More Ways to Find Great Ideas
• Use iterative rounds with customers
• Set up a keyword search to scan trade publications
• Treat trade shows as intelligence missions
• Have employees visit supplier labs
• Set up an idea vault
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Drawing Ideas from Customers
• Observe customers using product
• Ask customers about problems with products
• Ask customers about their dream products
• Use a customer advisory board or a brand community of enthusiasts to discuss product
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Idea Generation: Creativity Techniques
• Attribute listing• Forced relationships• Morphological
analysis• Reverse assumption
analysis• New contexts• Mind mapping
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Lateral Mapping
• Gas stations + food• Cafeteria + Internet• Cereal + snacking• Candy + toy• Audio + portable
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Variations on Failure
• Absolute product failure• Partial product failure• Relative product failure
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Table 20.5 Product-Idea Rating Device
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Concepts in Concept Development
• Product idea
• Product concept
• Category concept
• Brand concept
• Concept testing
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Concept Testing
• Communicability and believability
• Need level
• Gap level
• Perceived value
• Purchase intention
• User targets, purchase occasions, purchasing frequency
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-22
Figure 20.6 Utility Functions Based on Conjoint Analysis
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Marketing Strategy
• Target market’s size, structure, and behavior
• Planned price, distribution, and promotion for year one
• Long-run sales and profit goals and marketing-mix strategy over time
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-24
Figure 20.7 Product Life Cycle Sales for Three Product Types
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Table 20.6 Projected Five-Year Cash-Flow Statement (in thousands $)
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Product Development
• Quality function deployment (QFD)• Customer attributes• Engineering attributes
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Prototype Testing
• Alpha testing
• Beta testing• Rank-order method• Paired-comparison method• Monadic-rating method
• Market testing
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Consumer Goods Market Testing
• Sales-Wave Research• Simulated Test Marketing• Controlled Test Marketing• Test Markets
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Test Market Decisions
• How many test cities?
• Which cities?
• Length of test?
• What information to collect?
• What action to take?
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Timing of Market Entry
• First entry• Parallel entry
• Late entry
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Criteria for Choosing Rollout Markets
• Market potential
• Company’s local reputation
• Cost of filling pipeline
• Cost of communication media
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What is Adoption?
• Adoption is an individual’s decision to become a regular user of a product.
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Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
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Figure 20.6 Adopter Categorization
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Characteristics of an Innovation
• Relative advantage• Compatibility• Complexity• Divisibility• Communicability
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Marketing Debate
Who should you target with new products?
Take a position:1. Consumer research is critical to new-productdevelopment.or2. Consumer research may not be all that helpful in new-product development.
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-37
Marketing Discussion
Think about the last new product you bought.
How do you think its success will be affected by the five characteristics of an innovation?