Developing & Managing
Products
Chapter 11
New Product Development
New Product Strategy
Idea Generation
Idea Screening
Business Analysis
Development
Test Marketing
Commercialization
New-product Strategy

Link product
development to MKT
strategy

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3M
Identify markets and
strategic roles

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Environmental
scanning
SWOT analysis
Source: http://www.logotecs.com
Idea Generation

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Customers
Employees
Distributors
Vendors
Competitors
Research &
Development
Consultants
Source: http://www.clker.com/clipart-9721.html
Idea Screening

First filter

Committee Reviews

Concept test
Business Analysis

Last checkpoint before capital is
committed


Look at product and marketing strategy
needed to commercialize it
Preliminary figures
Development

“Paper into prototype”

Testing against standards

Work on marketing mix

Team-based analysis


Internet
Customer panels
Market Testing

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Company chooses a specific market,
based on criteria
Advantages
Disadvantages
Internet
Commercialization

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Positioning and launching a product
Most expensive step
Slotting fee
Failure fee
Diffusion of Innovation

Innovators (2.5%)

Early adopters (13.5%)

Early majority (34%)

Late majority (34%)
Source: http://tutor2u.net

Laggards (16%)
Diffusion of Innovation

Factors for Adoption

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Complexity
Compatibility
Relative advantage
Observability
Trialability
Implications
The Product Life Cycle

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Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Introduction Stage

Create awareness and encourage
customers to try the product

Advertising



Primitive demand
Distribution issues
Pricing issues
Growth Stage

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
Rapid increases in sales
Competition
Advertising

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Selective demand
Who is buying?
Distribution
Maturity Stage

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Slowing sales and decreasing profits
Marketing strategy

Hold market share
Decline Stage

Sales and profits drop

Marketing strategy


Deletion
Harvesting
Product Cycle Dimensions

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Length
Shape

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Generalized product
High learning product
Low learning product
Fashion product
Fad product
Source: www.your90s.com
Why do New Products Fail?
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Insignificant “point of difference”
Incomplete market and product definition
before development starts
Too little market attentiveness
Poor execution of marketing mix
Bad timing
No economical access to buyers