New market offerings

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Introducing New Market Offerings Marketing Management, 13 th ed 20

Transcript of New market offerings

Page 1: New market offerings

Introducing New Market Offerings

Marketing Management, 13th ed

20

Page 2: New market offerings

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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.

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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

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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

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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

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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.

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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?