Marketing Management, 12/eA South Asian Perspective

20 Introducing New Market Offerings

20-2

Chapter Questions

What challenges does a company face in developing new products?

What organizational structures are used to manage new-product development?

What are the main stages in developing new products?

What is the best way to set up the new-product development process?

What factors affect the rate of diffusion and consumer adoption of newly launched products?

20-3

Categories of New Products

New-to-the-world New product lines Additions to product lines Improvements to products Repositionings Cost reductions

20-4

Factors That Limit New Product Development Shortage of ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles

20-5

Venture Team

Cross-functional group charged withdeveloping a specific product or business; Intrapreneurs are relieved of other dutiesand provided a budget and time frame.

20-6

Criteria for Staffing Venture Teams

Desired team leadership style Desired level of leader expertise Team member skills and expertise Level of interest in concept Potential for personal reward Diversity of team members

20-7

Idea Generation: Creativity Techniques

Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping

20-8

Variations on Failure

Absolute product failure Partial product failure Relative product failure

20-9

Concepts in Concept Development

Product idea Product concept Category concept Brand concept Concept testing

20-10

Concept Testing

Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions,

purchasing frequency

20-11

Marketing Strategy

Target market’s size, structure, and behavior

Planned price, distribution, and promotion for Year 1

Long-run sales and profit goals and marketing-mix strategy over time

20-12

Product Development

Quality function deployment (QFD)Customer attributesEngineering attributes

20-13

Prototype Testing

Alpha testing Beta testing

Rank-order methodPaired-comparison methodMonadic-rating method

Market testing

20-14

Consumer Goods Market Testing

Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets

20-15

Test Market Decisions

How many test cities? Which cities? Length of test? What information? What action to take?

20-16

Timing of Market Entry

First entry Parallel entry Late entry

20-17

Criteria for Choosing Rollout Markets

Market potential Company’s local reputation Cost of filling pipeline Cost of communication media

20-18

Consumer-Adoption Process

Adoption is an individual’s decision

to become a regular user

of a product.

20-19

Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

20-20

Adopter Categorization

Innovators Early adopters Early majority Late majority Laggards

20-21

Characteristics of an Innovation

Relative advantage Compatibility Complexity Divisibility Communicability