www.mhhe.com/fourps for use only with perreault and mccarthy texts. © 2006 mcgraw-hill companies,...

33
www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw- Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management and New Product Development

Upload: aleesha-byrd

Post on 28-Dec-2015

215 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

www.mhhe.com/fourps

For use only with Perreault and McCarthy texts.© 2006 McGraw-Hill Companies, Inc.McGraw-Hill/Irwin

CHAPTER NINE

Product Management and New Product Development

CHAPTER NINE

Product Management and New Product Development

Page 2: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

1. Understand how product life cycles affect strategy planning.

2. Understand what is involved in designing new products and what “new products” really are.

3. Understand the new-product development process.

4. See why product liability must be considered in screening new products.

5. Understand the need for product or brand managers.

6. Understand how total quality management can improve goods and services.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

When we finish this lecture you should

Page 3: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Managing Products over Their Life CyclesExhibit 9-1

Page 4: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Market Introduction – Investing in the Future

+

Page 5: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Monopolistic Competition Develops

Monopolistic Competition Develops

Monopolistic Competition Develops

Monopolistic Competition Develops

Innovation Attracts Competition

Innovation Attracts Competition

Innovation Attracts Competition

Innovation Attracts Competition

Market Growth – Profits Go Up and Down

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Profits Peak and Then Decline

Profits Peak and Then Decline

Don’t Ignore Long-Term Competitive Trends!Don’t Ignore Long-Term Competitive Trends!

Page 6: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Persuasive, More Costly Promotion

Persuasive, More Costly Promotion

Brands Are More SimilarBrands Are More Similar

Greater Price Competition/Price Sensitivity

Greater Price Competition/Price Sensitivity

Persuasive, More Costly Promotion

Persuasive, More Costly Promotion

Brands Are More SimilarBrands Are More Similar

Greater Price Competition/Price Sensitivity

Greater Price Competition/Price Sensitivity

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Market Maturity – Sales Level Off, Profits Continue Down

Maturity May Last a Long Time

Maturity May Last a Long Time

Page 7: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Decline – A Time of Replacement

+

Page 8: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Which Stage of the PLC?

Page 9: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

AND

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

IndividualBrands

IndividualBrands

• May not follow the classic pattern

• May be introduced in market growth or maturity

• Not all brands are equally strong

MarketDefinitions

MarketDefinitions

• Should be carefully developed

• Different markets, different stages

• Contribute to the length of the cycle

Product Life Cycles Should Be Related to Specific Markets

Page 10: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Can Be TriedCan Be Tried

Easy to Communicate

Easy to Communicate

Competitive Advantage

Competitive Advantage

Can Be TriedCan Be Tried

Easy to Communicate

Easy to Communicate

Competitive Advantage

Competitive Advantage Easy to UseEasy to UseEasy to UseEasy to Use

CompatibleCompatible

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Product Life Cycles Vary in Length

Some ProductsMove Fast

Some ProductsMove Fast

Page 11: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interactive Exercise: Adoption

Page 12: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

The Early Bird Usually ProfitsThe Early Bird Usually Profits

Product Life Cycles Are Getting Shorter

Product Life Cycles Are Getting Shorter

The Early Bird Usually ProfitsThe Early Bird Usually Profits

Product Life Cycles Are Getting Shorter

Product Life Cycles Are Getting Shorter

Fashions and FadsFashions and Fads

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Other Issues in Product Life Cycle Length

Page 13: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Competitors May Help Adoption

Competitors May Help Adoption

Anticipate Speed of

Movement

Anticipate Speed of

Movement

Consider the Four Ps

Consider the Four Ps

Consider the Four Ps

Consider the Four Ps

Allocate Sufficient

Money

Allocate Sufficient

Money

Be FlexibleBe Flexible

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Planning for Different Stages of the Product Life Cycle

MarketIntroduction

& Growth

MarketIntroduction

& Growth

Page 14: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Managing Mature Products

+

Page 15: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Improve the Product or Develop a New OneExhibit 9-3

’’ ’’’’

Page 16: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Are Product Modifications Really New Products?

+

Page 17: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Don’t Pull the Plug So Quickly

Don’t Pull the Plug So Quickly

Don’t Pull the Plug So Quickly

Don’t Pull the Plug So Quickly

Phase-out May Be Necessary

Phase-out May Be Necessary

Phase-out May Be Necessary

Phase-out May Be Necessary

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Phasing Out Dying Products

ProfitabilityProduct LineCustomer

SupportSales Decline Can

Be ProfitableSales Decline Can

Be Profitable

Page 18: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

What Is a New Product?What Is a New Product?What Is a New Product?What Is a New Product?

FTC Rule: 6 MonthsFTC Rule: 6 MonthsFTC Rule: 6 MonthsFTC Rule: 6 Months

Ethical Dilemmas ExistEthical Dilemmas Exist

New Product Planning

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Page 19: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

New Product

Page 20: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

An Organized New Product Development Process is CriticalExhibit 9-4

Page 21: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 1: Idea Generation

Page 22: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 2: Screening

Page 23: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 3: Idea Evaluation

Page 24: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 4: Development

Page 25: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Step 5: Commercialization

Page 26: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

New Product Development: A Total Company EffortExhibit 9-6

+

Page 27: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Common in Large Companies

Common in Large Companies

Common in Large Companies

Common in Large Companies

Product/Brand Managers

Product/Brand Managers

Product/Brand Managers

Product/Brand Managers

Some Are “Product Champions”

Some Are “Product Champions”

Need for Product Managers

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Page 28: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Building Quality into the Implementation Effort

+

Page 29: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

TQM Is Easier Said Than DoneExhibit 9-7

Page 30: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Why Things Go WrongExhibit 9-8

+

Page 31: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Server Is Linked To the Service

Server Is Linked To the Service

Server Is Linked To the Service

Server Is Linked To the Service

Training Is CrucialTraining Is CrucialTraining Is CrucialTraining Is Crucial

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Building Quality into Services

Empowerment WorksEmpowerment Works

Page 32: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

Separate the Routine from the Special

Separate the Routine from the Special

Separate the Routine from the Special

Separate the Routine from the Special

Specify Jobs and Benchmark

Specify Jobs and Benchmark

Specify Jobs and Benchmark

Specify Jobs and Benchmark

Managers Lead the EffortManagers Lead the EffortManagers Lead the EffortManagers Lead the Effort

Manage Expectations with Good Communication

Manage Expectations with Good Communication

Manage Expectations with Good Communication

Manage Expectations with Good Communication

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Other Issues in Quality Implementation Efforts

Get a Return on QualityGet a Return on Quality

Page 33: Www.mhhe.com/fourps For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER NINE Product Management

• Product life cycle

• Market introduction

• Market growth

• Market maturity

• Sales decline

• Fashion

• New product

• Federal Trade Commission (FTC)

• Consumer Product Safety Act

• Product liability© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Key Terms

• Concept testing

• Product managers

• Brand managers

• Total quality management (TQM)

• Continuous improvement

• Pareto chart

• Fishbone diagram

• Empowerment

• Benchmarking