New Product Development

Proactive versus reactive
strategies
 The pioneering advantage
 Opportunity identification
 Positioning strategies
 Consumer-driven engineering
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TM 12-1
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-2
The best choice for positioning strategy
When to use
proactive versus
reactive strategies:
Market growth
Proactive
Reactive
High
Low
Protection for
innovation
Strong
Weak
Market size and
margin
Large
Small
Competition
High
Low
Channel position
Strong
Weak
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-3
Pioneer Advantage
1. Inherent Advantage
Risk Aversion
Standard of Comparison
Brand Attitude Accessibility
Set Size Effect
Direction-of-Comparison Effect
2. Enabling Advantage
Experience Curve
Positioning Advantage
Channel Distribution Advantage
3. Spurious Correlation
Third Variable Problem
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TM 12-4
A pioneering
brand that is
still popular
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TM 12-5
The most likely scenario for pioneering advantage
The pioneering
advantage
Inherent
advantage
Speed up new product
development at all costs
Copyright © 1999 Addison Wesley Longman, Inc.
Enabling
advantage
Speed up only if product can
be positioned and marketed
effectively because you know
more about the category than
your competitor
Spurious effect
Take your time
TM 12-6
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TM 12-7
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TM 12-8
Opportunity Identification
 Sales
potential
 Penetration
 Scale
 Input
 Reward
 Risk
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-9
Positioning
I. Positioning Strategies
1. Positioning a Leader
2. Establishing a Strong Alternative Position
A. Doing the Opposite
B. Turing Disadvantages in Advantages
3. Positioning by Attributes/Benefits
4. Positioning by Price
5. Positioning with Respect to Use or Application
6. Positioning by the Product User
7. Repositioning the Competition
II. Perceptual Mapping
III. Preference Regression
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-10
Positioning a Leader
Standard of Comparison
- The real thing
- Coke is it
We invented the product
- Xerox copiers
- Polaroid cameras
- Zippo lighters
“We’re Number 1” could imply:
- low price
- high availability
- insecurity
Marketing Myopia
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TM 12-11
Establishing a Strong Alternative Position
Look for a gap and fill it
Do the opposite
- Volkswagon
- 7-up 1929: Mixer and headache remedy
1967-70: The Uncola (20% sales increase)
Turn disadvantages in advantages
- Avis: We’re no. 2 - we try harder
- Smuckers: With a name like Smuckers, it has to be good
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-12
Positioning by Attributes/Benefits...
Toyota
Volvo
BMW
Bounty
Viva
Crest
Aim
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TM 12-13
Positioning by Price...
Nieman-Marcus
Bloomingdales
Saks Fifth Avenue
Sears
Michelob
Budweiser
Busch
S.T. Dupont lighters cost $1,500 and down
Joy - the costliest perfume in the world
Piaget - the world’s most expensive watch
High Price is not only for luxury items:
- Whitney’s Yogurt
- Orville Redenbacher’s
- Eukanuba
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-14
Positioning by
Price...
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TM 12-15
Positioning by
Price...
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TM 12-16
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TM 12-17
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TM 12-18
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TM 12-19
Positioning with Respect to Use or
Application...
Campbell’s Soup for Lunch
AT&T Reach out and touch someone
Gatorade
Arm & Hammer Baking Soda
Industrial Products
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TM 12-20
Positioning by
Use...
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TM 12-21
Positioning by Product User...
Marlboro Country
Miller High Life, the champagne of beers
Johnson & Johnson baby shampoo
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TM 12-22
Positioning
Malaysia Airlines as
the most popular
airline originating in
southeast Asia
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TM 12-23
Repositioning the Competition...
For the millions who should not take aspirin… if your stomach is easily upset… or if you
have an ulcer or if you suffer from asthma, allergies, or iron-deficiency anemia.. It
would make sense to check with your doctor before you take aspirin. Aspirin can
irritate the stomach lining, trigger asthmatic or allergic reactions, cause small
amounts of hidden gastrointestinal bleeding. Fortunately, there is Tylenol.
Royal Doulton - The china of Stoke-on-Trent, England vs.
Lenox - The china of Pomona, New Jersey
Samovar: Made in Schenley, Pennsylvania
Smirnoff: Made in Hartford, Connecticut
Wolfschmidt: Made in Lawrenceburg, Indiana
Stolichnaya: Made in Leningrad, Russia
Borden’s Wise: Potatoes, Vegetable oil
P & G’s Pringles: Dehydrated potatoes, mono- & diglicerides, ascorbic acid,
butylated hydroxy-anisole
Listerine: Medicine Breath
Scope: Fresh Minty Breath
Copyright © 1999 Addison Wesley Longman, Inc.
TM 12-24
A perceptual map
Not Fruity
Pepsi
Diet Pepsi
New Coke
Dr. Pepper
Coke Classic
Diet Coke
Not Sweet
Sweet
Cherry Coke
Tab
Sprite
Fresca
7Up
Fruity
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TM 12-25
Perceptual Maps...
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TM 12-26