b2 b chapter 11 - ba 303 sup. ©2000 prentice hall objectivesobjectives ä challenges in new product...

B2 B CHAPTER 11 - BA 303 sup

©2000 Prentice Hall

ObjectivesObjectivesObjectivesObjectives

Challenges in New Product Challenges in New Product Development (NPD)Development (NPD)

Organizational Structure & NPDOrganizational Structure & NPD Stages & Management of NPDStages & Management of NPD Diffusion & Adaption of New ProductsDiffusion & Adaption of New Products


Why New Products FailWhy New Products FailWhy New Products FailWhy New Products Fail

Poor Product PositioningPoor Product Positioning Vague Consumer DifferenceVague Consumer Difference ““Over Championing”Over Championing” Overestimated DemandOverestimated Demand Poor DesignPoor Design Poor Marketing ExecutionPoor Marketing Execution High Development CostsHigh Development Costs Strong Competitive ReactionStrong Competitive Reaction Remember the 20 clues to NPSRemember the 20 clues to NPS


Challenges in NPDChallenges in NPDChallenges in NPDChallenges in NPD

Idea ShortageIdea Shortage Fragmented MarketsFragmented Markets Social & Governmental ConstraintsSocial & Governmental Constraints CostCost Capital ShortageCapital Shortage Need for SpeedNeed for Speed Shorter Product Life CyclesShorter Product Life Cycles


New Product Development New Product Development ProcessProcess

New Product Development New Product Development ProcessProcess

IdeaIdeaGenerationGeneration

ConceptConceptDevelopmentDevelopmentand Testingand Testing

IdeaIdeaScreeningScreening

BusinessBusinessAnalysisAnalysis

ProductProductDevelopmentDevelopment

MarketMarketTestingTesting

CommercializationCommercialization

MarketingMarketingStrategyStrategy

DevelopmentDevelopment(sometimes (sometimes concurrent concurrent

with product with product development)development)


Sales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life Cycles

IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline

TimeTimeSal

esS

ales

&

& p

rofi

tsp

rofi

ts (

$) (

$)


20%20% Probability of Success Probability of Success20%20% Probability of Success Probability of Success

ProbabilityProbabilityof technicalof technicalcompletioncompletion

OverallOverallprobabilityprobabilityof successof success ==

Probability ofProbability ofcommercializationcommercialization

given technicalgiven technicalcompletioncompletion

XXProbability ofProbability of

economiceconomicsuccess givensuccess given

commercializationcommercializationXX


EXPLORE FIRST, EXPLORE FIRST, INNOVATION TEAM- SESSIONINNOVATION TEAM- SESSION

EXPLORE FIRST, EXPLORE FIRST, INNOVATION TEAM- SESSIONINNOVATION TEAM- SESSION

ACUMENACUMEN

SUCCESSFULSUCCESSFUL

NEW PRODUCTSNEW PRODUCTS ==

CREATIVITYCREATIVITY ++


IDEASIDEAS EXPLORE FIRST, EXPLORE FIRST, INNOVATION TEAM- SESSIONINNOVATION TEAM- SESSION


A’S & B’S NO C’S OR D’SDECISION MAKERSDRIVERFACILITATORNO LAME DUCKSNO NOMINAL TITLE HOLDERSINSIDER V OUTSIDER




AWAY FROM CAMPUSROUND TABLEAUDIO VISUALTAPE RECORD6-8 PLAYERS & POSITIONINGBETTER PART OF THE DAYEARLY IN THE MORNINGNEVER ON MONDAY


IDEASIDEAS EXPLORE FIRST, EXPLORE FIRST, Explore- NO Rules

IDEASIDEAS EXPLORE FIRST, EXPLORE FIRST, Explore- NO Rules

No idea is a bad ideaBe creativeTake risks No criticism allowedJOHN HEFELY KNOWN ELEMENT A + KNOWN ELEMENT B

= NEW PRODUCT C =

ACUMEN + CREATIVITY


DON’T SQUELCH CREATIVITYDON’T SQUELCH CREATIVITY, ,

Explore- NO Rules

DON’T SQUELCH CREATIVITYDON’T SQUELCH CREATIVITY, ,

Explore- NO Rules

THOMAS EDISONCHRISTOPHER COLUMBUSHENRY FORDSTATE HOSPITAL ON ARSENAL ST.NATIONAL ACADEMY OF SCIENCEADMIRAL HULSEYJOHN HEFELY KNOWN ELEMENT A + KNOWN ELEMENT B

= NEW PRODUCT C


Concept Development & Concept Development & TestingTesting

Concept Development & Concept Development & TestingTesting

1. Develop Product Ideas into Alternative Product Concepts

1. Develop Product Ideas into Alternative Product Concepts

2. Concept Testing - Test the ProductConcepts with Groups of Target Customers

2. Concept Testing - Test the ProductConcepts with Groups of Target Customers

3. Choose the Best One3. Choose the Best One


Consumer-Goods Market Consumer-Goods Market TestingTesting

Consumer-Goods Market Consumer-Goods Market TestingTesting

Sales-Wave

ResearchTest offering trail to

a sample of consumers in

successiveperiods.

Sales-Wave

ResearchTest offering trail to

a sample of consumers in

successiveperiods.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

StandardTest Market

Water Baby St. Louis

Full marketing campaignin a small number of representative cities.

StandardTest Market

Water Baby St. Louis

Full marketing campaignin a small number of representative cities.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.


CommercializationCommercialization(Introductory Life Cycle)(Introductory Life Cycle)

CommercializationCommercialization(Introductory Life Cycle)(Introductory Life Cycle)

When

Where

Whom

ProductPricePlacePromotionPolitics


2 1/2%Innovators

13 1/2%*Early

adopters

34%Early

majority

34%Late

majority

16%Laggards

Time (speed) of adoption, diffusion, innovations *opinion leader Remember our chapter 3 -• OPTHALMOLIC (EYE) EXAMPLE

Adopter Categorization of the Basis of Adopter Categorization of the Basis of Relative Time of Adoption of InnovationsRelative Time of Adoption of Innovations

Adopter Categorization of the Basis of Adopter Categorization of the Basis of Relative Time of Adoption of InnovationsRelative Time of Adoption of Innovations


Characteristics of the Characteristics of the Innovation Rate of AdoptionInnovation Rate of Adoption

Characteristics of the Characteristics of the Innovation Rate of AdoptionInnovation Rate of Adoption

Relative advantageRelative advantage CompatibilityCompatibility ComplexityComplexity DivisibilityDivisibility CommunicabilityCommunicability


Remember B2B Product Remember B2B Product POSITIONINGPOSITIONING

Remember B2B Product Remember B2B Product POSITIONINGPOSITIONING

PositioningPositioning is the act of is the act of designing the company’s designing the company’s offering and image to occupy offering and image to occupy a distinctive place in the the a distinctive place in the the target market’s mind.target market’s mind.


Remember B2B COMPETIITIVE Remember B2B COMPETIITIVE ADVANTAGE: ADVANTAGE: SOURCE, SOURCE, POSITION, OUTCOMESPOSITION, OUTCOMES

AND REINVESTAND REINVEST

Remember B2B COMPETIITIVE Remember B2B COMPETIITIVE ADVANTAGE: ADVANTAGE: SOURCE, SOURCE, POSITION, OUTCOMESPOSITION, OUTCOMES

AND REINVESTAND REINVEST

US AEROSPACE AND US AEROSPACE AND BOEING EXAMPLESBOEING EXAMPLES

UNDERSTANDING CORE UNDERSTANDING CORE COMPETENCIESCOMPETENCIES


Sales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life CyclesSales & Profit Life Cycles

*Introduction*Introduction GrowthGrowth MaturityMaturity DeclineDecline

TimeTime*Corresponds with full commercialization*Corresponds with full commercialization(NPD)(NPD)

Sal

esS

ales

&

& p

rofi

tsp

rofi

ts (

$) (

$)


Four IntroductoryFour IntroductoryMarketing StrategiesMarketing Strategies

Four IntroductoryFour IntroductoryMarketing StrategiesMarketing Strategies

Rapid-Rapid-skimmingskimmingstrategystrategy

Rapid-Rapid-skimmingskimmingstrategystrategy

Rapid-Rapid-penetrationpenetration

strategystrategy

Rapid-Rapid-penetrationpenetration

strategystrategy

Slow-Slow-penetrationpenetration

strategystrategy

Slow-Slow-penetrationpenetration

strategystrategy

Slow-Slow-skimmingskimmingstrategystrategy

Slow-Slow-skimmingskimmingstrategystrategy

PricePrice

LowLow

HighHigh

PromotionPromotionHighHigh LowLow


Maturity StageMaturity StageMaturity StageMaturity Stage

Market ModificationMarket Modification Product ModificationProduct Modification Marketing-Mix ModificationMarketing-Mix Modification


Decline StageDecline StageDecline StageDecline Stage

Increase investmentIncrease investment Resolve uncertainties - stable Resolve uncertainties - stable

investmentinvestment Selective nichesSelective niches HarvestingHarvesting DivestingDivesting


Market EvolutionMarket EvolutionMarket EvolutionMarket Evolution

EmergenceEmergence GrowthGrowth MaturityMaturity DeclineDecline


ReviewReviewReviewReview

Challenges in New Product Challenges in New Product Development (NPD)Development (NPD)

Organizational Structure & NPDOrganizational Structure & NPD Stages & Management of NPDStages & Management of NPD Diffusion & Adaption of New ProductsDiffusion & Adaption of New Products

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