38117810 CH 20 Introducing New Market Offerings

8/14/2019 38117810 CH 20 Introducing New Market Offerings

1/21

1

New Product Offerings

Group Members:

Nosherwan Khawar

Nouman Fareed

Faizan AhmedMobeen Abdul Hamid


2/21

2

Categories of New ProductsNew-to-the-World

Cost reductions

New Product Lines

Additions

Improvements

Repositionings
http://www.bluetooth.com/


3/21

3

Categories of New ProductsWe can identify six categoriesof new products.

1. New-to-the world Products : New products that create anentirely new market; like Blackberry.

2. New Product Lines : New products that allow a company toenter an established market for the first time; like Nestle juices.

3. Additions to Existing Product Lines : New products thatsupplement established product lines; like new package sizes,flavors etc.

4. Improvements and Revisions of Existing Products : Newproducts that provide improved performance or greaterperceived value and replace existing products; like new modelsof lab-tops and desktops.


4/21

4

Categories of New Products

5. Repositionings : Existing products that are targeted to newmarkets or market segments; like repositioning of MountainDew by linking it with adventure.

6. Cost Reductions : New products that provide similarperformance at lower cost.


5/21

5


Note : As per research, less than 10% of all new products aretruly innovative and new to the world. These products involvethe greatest cost and risk because they are new to both the

company and the marketplace.


6/21

6


BlackberryA New-to-the-World Product

Mountain DewAn example of successful Repositioning


7/217

New Product Development Process

Commercialization

MarketTests

PrototypeDevelopment

BusinessAnalysis

IdeaScreening

IdeaGeneration

New ProductDevelopment

Process

Start


8/218

Managing New Product Development Process

A new product is best developed through a series of sixstages.

1.

Idea Generation2. Idea Screening

3. Business Analysis

4. Prototype Development

5. Market Tests

6. Commercialization


9/219

New-Product Development Process1. Idea Generation : New-product development starts with an

idea. New-product ideas can come from interacting withvarious groups (like customers, suppliers, employees etc.)and from using creativity-generating techniques.

2. Idea Screening : At this stage mew-product ideas areevaluated to determine which ones to be studied further. Thecompany sorts the proposed ideas into three groups :promising ideas, marginal ideas, and rejects.

3. Business Analysis : The stage in new-product development in

which the new product is reviewed from all organizationalperspectives to determine performance criteria and likelyprofitability. It includes both qualitative (listing of productfeatures, resources needed to produce the product, and abasic marketing plan)and quantitative (market demand, costprojections, investment requirements, and competitiveactivity)means of evaluation.


10/2110

New Product Development Process4. Prototype Development : If the results of the business

analysis are favorable, then a prototype (a trial model) of theproduct is developed and tested internally. In case ofservices, the facilities and procedures necessary to produce

and deliver the new product are designed and tested. Theprototype can be a digital as well; like Boeing designed its777 aircraft on a totally digital basis.

5. Market Tests : Unlike the internal tests conducted duringprototype development, market tests involve actualconsumers. A new tangible product may be given to a sample

of people for use in their households (in case of consumergood) or their organizations (a business good). Following thetrials, users are asked to evaluate the product. This stageoften entails Test Marketing (see next slide). Followingmarket tests, the management must make a final decisionabout introducing the product.


11/2111

New Product Development Process

Boeing 777Cock-pit Simulator

Boeing 777


12/21


13/2113

Test Marketing

Test Marketing : A controlled experimental procedure inwhich a new product is tested under realistic marketconditions in a limited geographical area.


14/21

14

Consumer-Adoption Process

Adoption is an individuals decisionto become a regular user

of a product.


15/21

15

New-Product Adoption Process Adoptionis an individualsdecision to become a regular user

of a product.

Adopters of new products have been observed to movethrough five stages.

1. Awareness : The consumer becomes aware of the innovationbut lacks information about it.

2. Interest : The consumer is stimulated to seek informationabout the innovation.

3. Evaluation : The consumer considers whether to try theinnovation.

4. Trial : The consumer tries the innovation.

5. Adoption : The consumer decides to make full and regularuse of the innovation.


16/21

16

New-Product Adoption Process

Adoption

Trial Evaluation

Interest

Awareness

New-ProductAdoption

Process

Start


17/21

17

Adopter Groups

Laggards

LateMajority

EarlyMajority

EarlyAdopters

Innovators

AdopterGroups


18/21

18

Adopter Groups There are five Adopter Groups which differ in their value

orientations and their motives for adopting or resisting thenew product.

1. Innovators (They represent only 2.5% of the market. They

are venturesome consumers who are the first to adopt aninnovation)

2. Early Adopters (They represent 13.5% of the market. Theyare opinion leaders and purchase after innovators but soonerthan other consumer groups)

3.

Early Majority (The represent 34% of the market. They adoptnew product when its benefits are proven and a lot ofadoption has already taken place)


19/21

19

Adopter Groups

4. Late Majority (They represent another 34% of the market.They are a skeptical group pf consumers who adopt aninnovation to save money or in response to social pressure)

5. Laggards (They comprise 16% of the market and are traditionbound, hence are last to adopt an innovation)


20/21

20

Adopter Groups


21/21

The End

21

38117810 CH 20 Introducing New Market Offerings

Documents

Transcript of 38117810 CH 20 Introducing New Market Offerings