chapter 10 developing and managing products. categories of new products new-to-the-world new product...
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Chapter 10 Developing and Chapter 10 Developing and Managing ProductsManaging Products
Categories of New ProductsCategories of New Products
New-To-The-WorldNew-To-The-World
New Product LinesNew Product Lines
Product Line AdditionsProduct Line Additions
Improvements/RevisionsImprovements/Revisions
Repositioned ProductsRepositioned Products
Lower-Priced ProductsLower-Priced Products
SixCategories
ofNew
Products
SixCategories
ofNew
Products
Successful New-Product Successful New-Product Development ProcessDevelopment Process
New ProductNew ProductSuccessSuccessFactorsFactors
New ProductNew ProductSuccessSuccessFactorsFactors
Long-Term CommitmentLong-Term Commitment
New Product StrategyNew Product Strategy
Capitalize on ExperienceCapitalize on Experience
Establish an EnvironmentEstablish an Environment
New-Product StrategyNew-Product Strategy
Idea GenerationIdea Generation
Idea ScreeningIdea Screening
Business AnalysisBusiness Analysis
DevelopmentDevelopment
Test MarketingTest Marketing
CommercializationCommercialization
New ProductNew Product
New-Product New-Product Development ProcessDevelopment Process
SoftBook IBM Electronic Newspaper Rocket e-book BMW R 1200 C
Polaroid PopShot iMac Voice-Egg Nissan SUT (Sports Utility Truck)
Concept TestConcept Test
A test to evaluate a
new-product idea,
usually before any prototype has
been created.
Choosing a Test MarketChoosing a Test Market
Similar to planned distribution Relative isolation and free of influences Advertising availability; multiple media Diversified cross section No atypical purchase habits Representative population/income Not overly used or easily “jammed” Year-round sales stability Available research/audit and retailers
Why New Products FailWhy New Products Fail
• No discernible benefits
• Poor match between features and customer desires
• Overestimation of market size
• Incorrect positioning
• Price too high or too low
• Inadequate distribution
• Poor promotion
• Inferior product
Magazines
Recorded Music Flowers Books
Business Supplies
Abrasives
Financial Services
Travel
Software
PCs
Industrial Machinery
Paper Goods
Hand Tools
Consumer Electronics
Food, Drink
Medicine
Clothes
House Paint
Home Appliances
Furniture
Degree of ConsiderationDegree of Consideration Low HighLow High
E
ffic
ien
cy o
f th
e O
n-L
ine
Sal
es C
han
nel
E
ffic
ien
cy o
f th
e O
n-L
ine
Sal
es C
han
nel
L
ow
Hig
hL
ow
Hig
h
Banners Only Micro-Site Destination SiteSource: Forrester Research
Wh
ere
is E
-Co
mm
Wh
ere
is E
-Co
mm
Go
ing
to
Gro
w?
Go
ing
to
Gro
w?
Success FactorsSuccess Factors
Match between product and
market needs
Match between product and
market needs
Unique but superior product
Unique but superior product
Benefit to large number of peopleBenefit to large
number of people
Factors in SuccessfulFactors in SuccessfulNew ProductsNew Products
Factors in SuccessfulFactors in SuccessfulNew ProductsNew Products
Categories of AdoptersCategories of Adopters
LaggardsLaggards
Late MajorityLate Majority
Early MajorityEarly Majority
Early AdoptersEarly Adopters
InnovatorsInnovators
Categories of Categories of AdoptersAdopters
in thein theDiffusion ProcessDiffusion Process
Categories of Categories of AdoptersAdopters
in thein theDiffusion ProcessDiffusion Process
Product Life CycleProduct Life Cycle
Time
Do
llar
s
ProductCategory Profits
ProductCategory Sales
IntroductoryIntroductoryStageStage
GrowthGrowthStageStage
MaturityMaturityStageStage
DeclineDeclineStageStage
0
Product Characteristics and Product Characteristics and the Rate of Adoptionthe Rate of Adoption
TrialabilityTrialability
ObservabilityObservability
Relative AdvantageRelative Advantage
CompatibilityCompatibility
ComplexityComplexity
ProductProductCharacteristics Characteristics Predict Rate of Predict Rate of
AdoptionAdoption
ProductProductCharacteristics Characteristics Predict Rate of Predict Rate of
AdoptionAdoption
Marketing Strategies for PLCMarketing Strategies for PLC
INTRODUCTION GROWTH MATURITY DECLINE
ProductStrategy
DistributionStrategy
PromotionStrategy
PricingStrategy
Limited modelsFrequent changes
More modelsFrequent changes.
Large number of models.
Eliminate unprofitable
models
LimitedWholesale/
retail distributors
Expanded dealers. Long-term relations
Extensive.Margins drop.Shelf space
Phase out unprofitable
outlets
Awareness. Stimulate
demand.Sampling
Aggressive ads.Stimulatedemand
Advertise. Promote heavily
Phase outpromotion
Higher/recoupdevelopment
costs
Fall as result ofcompetition &
efficient produc-tion.
Prices fall (usually).
Prices stabilize at low level.
Diffusion Process and PLC Diffusion Process and PLC CurveCurve
Innovators
Early adopters
Early majorityLate majority
Laggards
ProductProductlife cyclelife cyclecurvecurve
DiffusionDiffusioncurvecurve
Introduction Growth Maturity Decline
Sal
es