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Transcript of pom_14_inppt_09_CF_GE
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9- 1Copyright 2012 Pearson Education
i t s good and
good for you
Chapter Nine
New-Product Development and
Product Life-Cycle Strategies
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9- 2Copyright 2012 Pearson Education
New-Product Development andProduct Life-Cycle Strategies
New-Product Development
Strategy
New-Product DevelopmentProcess
Managing New-Product
Development
Product Life-Cycle Strategies
Additional Product and Service
Considerations
Topic Outline
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9- 3Copyright 2012 Pearson Education
New-Product Development Strategy
Acquisitionrefers to the buying of a whole
company, a patent, or a license to producesomeone elses product
New product developmentrefers to original
products, product improvements, productmodifications, and new brands developedfrom the firms own research and
development
Two ways to obtain new products
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9- 4Copyright 2012 Pearson Education
New-Product Development Process
Major Stages in New-Product Development
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New-Product Development Process
Idea generationis the systematic search fornew-product ideas
Sources of new-product ideas Internal
External
Idea Generation
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9- 6Copyright 2012 Pearson Education
New-Product Development Process
Internal sourcesrefer to the
companys own formal research
and development, management
and staff, and intrapreneurialprograms
External sourcesrefer to sources
outside the company such as
customers, competitors,distributors, suppliers, and
outside design firms
Idea Generation
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Copyright 2012 Pearson Education
New-Product Development Process
Inviting broad communities of people
customers, employees, independentscientists and researchers, and even the
public at largeinto the new-product
innovation process.
Crowdsourcing
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Copyright 2012 Pearson Education
New-Product Development Process
Identify good ideas and drop poor ideas
R-W-W Screening Framework: Is it real?
Can we win?
Is it worthdoing?
Idea Screening
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Copyright 2012 Pearson Education
New-Product Development Process
Product ideais an idea for a possible productthat the company can see itself offering
to the marketProduct conceptis a detailed version of the
idea stated in meaningful consumer
terms
Product imageis the way consumersperceive an actual or potential product
Concept Development and Testing
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New-Product Development Process
Concept testing refers to testing new-product
concepts with groups of target consumers
Concept Development and Testing
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New-Product Development Process
Marketing strategy development refers to
the initial marketing strategy for
introducing the product to the market Marketing strategy statement includes:
Description of the target market
Value proposition Sales and profit goals
Marketing Strategy Development
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9- 12Copyright 2012 Pearson Education
New-Product Development Process
Business analysisinvolves a review of the
sales, costs, and profit projections to find
out whether they satisfy the companys
objectives
Marketing Strategy Development
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9- 13Copyright 2012 Pearson Education
New-Product Development Process
Involves the creation and testing of one or
more physical versions by the R&D or
engineering departments
Requires an increase in investment
Shows whether the product idea can be
turned into a workable product.
Marketing Strategy DevelopmentProduct development
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New-Product Development Process
Test marketing is thestage at which theproduct andmarketing program
are introduced intomore realisticmarketing settings
Provides the marketer
with experience intesting the productand entire marketingprogram before fullintroduction
Marketing Strategy Development
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New-Product Development Process
Types of Test Markets
Standard testmarkets
Controlled test marketsSimulated test markets
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New-Product DevelopmentProcess
Advantages of simulated test markets
Less expensive than other test methods
Faster
Restricts access by competitors
Disadvantages
Not considered as reliable and accurate due
to the controlled setting
Marketing Strategy Development
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New-Product Development Process
Marketing Strategy Development
When firms testmarket
New productwith largeinvestment
Uncertaintyabout product
or marketingprogram
When firms maynot test market
Simple lineextension
Copy ofcompetitorproduct
Low costs Management
confidence
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New-Product Development Process
Commercializationis the introduction
of the new product
When to launch
Where to launch
Planned market
rollout
Marketing Strategy Development
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9- 19Copyright 2012 Pearson Education
Managing New-Product Development
Successful new-product development should
be:
Customer centered Team-based
Systematic
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Managing New-Product Development
Sequential new-product developmentcompany departments work closely
together individually to complete
each stage of the process beforepassing it along to the nextdepartment or stage
Increased control in risky or complexprojects but may be slow
New-Product Development Strategies
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Managing New-Product Development
Team-based new-product development
Company departments work closely
together in cross-functional teams,
overlapping in the product-
development process to save time andincrease effectiveness
New-Product Development Strategies
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Managing New-Product Development
Systematic new-product development
innovative development approach that collects,
reviews, evaluates, and manages new-product
ideas
Creates an innovation-oriented culture
Yields a large number of new-product ideas
New-Product Development Strategies
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Product Life-Cycle Strategies
Product Life Cycle
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Product development
Sales are zero and investment costs mount
Introduction
Slow sales growth and profits are nonexistent
Growth Rapid market acceptance and increasing profits.
Maturity
Slowdown in sales growth and profits level off ordecline
Decline
Sales fall off and profits drop
Product Life-Cycle Strategies
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Product Life-Cycle Strategies
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Product Life-Cycle Strategies
Fads are temporary
periods of unusually
high sales driven by
consumer
enthusiasm and
immediate product
or brand popularity
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Product Life-Cycle Strategies
Slow sales growth
Little or no profit
High distribution and promotion expense
Introduction Stage
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Product Life-Cycle Strategies
Sales increase
New competitors enter the market
Price stability or decline to increase
volume
Consumer education
Profits increase
Promotion and manufacturing costs gain
economies of scale
Growth Stage
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Product Life-Cycle Strategies
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D to
support sales and profits
Maturity Stage
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Product Life-Cycle Strategies
Market modifying
Productmodifying
Marketing mix
modifying
Maturity Stage Modifying Strategies
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Product Life-Cycle Strategies
Maintain the product
Harvest the product
Drop the product
Decline Stage
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Additional Product and ServiceConsiderations
Public policy and regulations regarding developing
and dropping products, patents, quality, andsafety
Product Decisions and SocialResponsibility
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Additional Product and ServiceConsiderations
Determining what products
and services to introduce in
which countries
Standardization versus
customization
Packaging and labeling
Customs, values, laws
International Product andService Marketing
Challenges
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9 35Copyright 2012 Pearson Education
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright 2012 Pearson Education