Marketing Chapter 10 Developing New Products Gilbert A. Churchill, Jr. Irwin/McGraw-Hill J. Paul Peter © The McGraw-Hill Companies, Inc., 1998 Slide 10-1 Figure 10.1 Types of New Products New-to-the-World Products Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-2 Figure 10.2 The New Product Development Process Idea Generation Idea Screening Business Analysis Product Development Test Marketing Commercialization Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-3a Table 10.1 Techniques for Generating Ideas Technique Delphi Method Benefit Analysis Description A panel of experts fills out a questionnaire; a researcher tabulates the results and sends them to panel members. Repeat the process until the panel reaches a consensus or an impasse. List all the benefits customers receive from the product under study. Think of benefits that are currently missing from the list. Use Analysis Ask customers how they use the product under study. List the various uses. Relative Brand Profile Ask target markets whether the brand name makes sense for other product categories under consideration. A stretch of the brand name that makes sense to potential buyers can be the basis for a new product. Unique properties List all the properties held in common by a product or material currently on the market. Look for unique properties of the organization’s product. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-3b Table 10.1 Techniques for Generating Ideas Technique Description Achilles heel List the weaknesses of a product or product line (for the organization and its competitors). Prune the list to the one or two weaknesses most likely to inspire a response from competitors. Identify product concepts that could result from correcting these weaknesses. Free Association Write down one aspect of the product situation–a product attribute, use or user. Let the mind roam and jot down every idea that surfaces. Repeat the process for other aspects of the product situation. Stereotype activity Ask, “How would ________do it?” –referring to how a member of some group or a particular person would use the product. Example: What type of bicycle would a senator ride? Can also ask what the stereotype would not do. Study of other people’s failures Study products that have failed. Look for ways to solve the problems that led to failure. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-4 Types of Test Markets • A standard test market is the practice of offering a new product through normal distribution channels in a limited area. • A controlled test market is the practice of offering a new product through a set of retailers who have been paid to set aside shelf space for the product in a desirable area of the store. • A simulated test market is an experiment in which a sample of consumers has an opportunity to select products. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-5 The Eight Dimensions of Quality Walt Disney World Performance Perceived Quality Singapore Airlines Overall Evaluation Ralph Lauren Features Reliability Aesthetics Serviceability Midas Sears Die Hard Durability Conformance DuraCell Chrysler Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 10-6 Universal Product Codes 0 12345 67890 5 Check Digit Identify Manufacturer Assigned by the Uniform Code Council Irwin/McGraw-Hill Identify Product Assigned by the Manufacturer © The McGraw-Hill Companies, Inc., 1998 Slide 10-7 Figure 10.5 Organizational Forms for New Product Development Options Functional Functional Matrix Balanced Matrix With or Without Committee Project Matrix Venture Inside/ Outside Percentage of Employee Time Devoted to the New Product Almost None Source: Adapted from C. Merle Crawford, New Products Management, 4th ed. (Burr Ridge, Ill.:Irwin, 1994), p. 411 Almost All Slide 10-8 Shortening Development Time • Use cross-functional teams • Applying technology • Delegate authority • Build on specialized knowledge Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998