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New
product
1. New-
to-the-
world
6. Cost
reductio
n
5. Re-positionin
gs
2. New-
to-the-
firm
4. Improvem
ents & revision to
existing products
3.
Addition
to
existing
product
lines
New-to-the-World product, or “Really-new product”: products are inventions that create a whole new market and was never seen/marketed before. (10% of new product)
New-to-the-firm products: products that take a firm into a category new to it. (20%)
Additions to existing product lines: or line extensions to the firm’s current products. (26%)
Improvements and revisions to existing products: current products are made better. (26%)
Re-positionings: products that are retargeted for a new use or application. (7%)
http://www.youtube.com/watch?v=JUNuznXtyaM
Cost reductions: new products simply replace existing products in the line, providing customer similar performance at a lower cost. (11%)
5
Opportunity
identification
and selection
Concept
generation
Concept/proj
ect
evaluation
Development
Launch
3 main streams of activity feeding strategic planning for new product: Ongoing marketing planning Ongoing corporate planning Special opportunity analysis
Sorting of opportunities An underutilized resource A new resource An external mandate (stagnant market/
competition) An internal mandate (management/employees
desire to change)
Opportunity identification: the process of creatively recognizing opportunities. Why?
No firm wants to exploit all opportunities
Product Innovation Charter
6
Creating new product ideas
Identifying problems that people or business have and suggesting solutions to them
Unsolicited ideas pouring from customers, potential ones, employees, etc.
7
Problems/n
ew
opportunity
motivates
Concept
generati
on
Screening or pre-technical evaluation
Concept test all views come Full screen
Project evaluation
Quality Function Deployment, or:
Product description/ product definition/ Product Protocol--- List of customer needs.
Product protocol: agreement between various groups before technical work get started. The protocol should be in term of benefits, not the features only.
8
Resource Preparation
The Major Body of Effort: 3 in 1: the item/service
itself + the marketing plan + a business
(financial) plan
Prototype
Comprehensive Business Analysis --- Important
“Go/No Go” decision
Concept evaluation continues along the way.
9
Final “Go/No Go” decision
Critical and timely step
Market test
Activity of planning for Launch Management
10
Corporate mission, platform planning, strategic
fit, non-corporate strategic come together in NPD process Product Innovation Charter
A PIC provide guidance to the business units on
the roles of innovation. It is a mission statement,
at a more micro level and adapted to new
product activities.
PIC allows delegation, financing and
assignments.
The background of a PIC includes key points
from a PEST analysis (Political, Economic, Social,
Technology) or situation analysis.
Questions addressed in this section of a PIC may
include:
› What is the business about?
› Why has this strategy been developed?
Core competencies
Focus is achieved by 4 strengths: Core Technology (Kimberley-Clark) Product experience ( Tan Hiep Phat
for soft-drink, Vissan for processed and canned foods)
Customer franchise (Honda scooter/ Kleenex tissues)
End-use experience (Saigon beer in HCM market, Halida beer in Hanoi market)
Relying solely on technology/customer’s stated want is risky dual-drive strategy
Technology Drivers
Market Drivers
Technology drivers: Firm with superior technical skills turning technical
specifications into product features that satisfy market needs
Market drivers: Customer group & end-use Distributors & retailers
Questions addressed at this stage of a PIC may include: What are your company’s core competencies? What is your company’s competitive advantage and
the value that your company can bring to the target market?
What are your advantages in relation to your target market’s needs, wants, and consumption trends?
What are your company’s marketing capabilities?
Any complete PIC need both goals and
objectives.
Goals & Objectives can be in 3 types:
› Profit
› Growth
› Market status
Degree of Innovativeness:
First to market: pioneering
Adaptive product: taking one’s own or a competitive product
and improving it.
Imitation or emulation
Timing:
First
Quick second
Slower
Late
Miscellaneous guidelines: special guidelines of product’s
cost, quality, brand and so forth.
MacBook Pros is Apple product which comes
with high performance and high speed when
you use for work. This Apple product is really
suitable for you who need the best ingredient
and have hardware that supports their
performance. This Apple Thunderbolt MacBook
Pros come with Core i5 and i7 CPU that adding
in this notebook. This Macbook will give graphic
result that suitable with you want.
New Products Employees› Technical: R&D, engineering, design
› Marketing and manufacturing
End Users
Resellers, Suppliers, Vendors
Competitors
The Invention Industry (investors, etc. http://www.abc.net.au/tv/newinventors/ )
Idea exploration firms and consulting engineers
Miscellaneous (continued)
Miscellaneous Categories› Consultants
› Advertising agencies
› Marketing research firms
› Retired product specialists
› Industrial designers
› Other manufacturers
› Universities
› Research laboratories
› Governments
› Printed sources
› International
› Internet
Lead users: customers associated with a significant current trend, have the best understanding of the problems and expect to gain significantly from solutions. How to identify lead users? http://www.youtube.com/watch?v=FnU0phMaVm0
› Is it good to ask customers what they want?
› Being a customer, of your competitor’s products and your own!
› Some companies provide toolkits for user innovation, such as mobile phone games, Lego toys, sport equipment. (Reading on the Website)
Open innovation: a new method to find out creative ideas and concept, by outsourcing or seeking partners, externally.› Select the best partner(s), in terms of
technological, strategic and relational features.
› High level of trust
› P&G is one of the successful users of open innovation, by adopting new technology from outside. Unilever, HP, Toyota, LG, MyStarbucksIdea, etc.
› http://www.innovationexcellence.com/blog/2012/08/13/40-examples-of-open-innovation-crowdsourcing/
› http://www.customerthink.com/blog/10_examples_of_open_innovation_in_high_tech_and_b2b_companies
› http://mystarbucksidea.force.com/
There is no basic need for the new product
The new product did not meet customer needs
The new product idea is not properly communicated
http://www.dailyfinance.com/photos/top-25-biggest-product-flops-of-all-time/#photo-3
25
› What is a new product concept? A statement about anticipated product features (form or technology) that will yield selected benefits.
› The purposes of Concept Testing: Concept Testing is part of the prescreening process
First purpose of a concept test is to identify the very poor concept so it can be eliminated
If the concept passes the first reaction, a second purpose is to estimate the sales or trial rate that the product would enjoy – a sense of market share or general range of revenue dollars.
29
› The purposes of Concept Testing:
The buying intention question appears in almost every
concept test. The most common format for purchase intention is the classic five-point question: “How likely
would you buy a product like this, if we made it?”
1. Definitely would not buy
2. Probably would not buy
3. Might or might not buy
4. Probably would buy
5. Definitely would buy
The number of people who definitely buy or probably
would buy are usually combined and used as an indicator of group reaction, this is called top-two-boxes score.
The third purpose is to help develop the idea, not just test
it!30
Prepare the Concept Statement: a concept statement states a difference and how that difference benefits the customer or end-users. For example “This new refrigerator is built with modular parts; consequently, the consumer can arrange the parts to best fit a given kitchen location and then rearrange them to fit another location”.
Format
Commercialized Concept Statement
Define the Respondent Group
Select the Response Situation
Prepare the Interviewing Sequence
31
“Trà Xanh Không Độ cho người tiểu đường có nguồn gốc thiên nhiên,
với tác dụng giải nhiệt cao, độ ngọt vừa phải và sử dụng loại đường dành riêng cho
người tiểu đường. Trà xanh không độ cho người tiểu đường sẽ là thức uống thích
hợp với khách hàng ăn kiêng và quan tâm đến lượng đường trong cơ thể”
Take an example of a simple situation: You are deciding what to do on this coming break holiday
Values
Factors 4 points 3 points 2 points 1 points
Degree of fun Much Some Little None
Number of people Over 5 4 to 5 2 to 3 Under 2
Affordability Easily Probably Maybe No
Student’s capability Very
good
Good Some Little
Student’s scorings Skiing Boating Hiking Fishing
Fun 4 3 4 4
People 4 4 2 3
Affordability 2 3 4 4
Capability 1 4 3 4
Total 11 14 13 1532
The first (and most common) method of forecasting new product depletions is historical review. › If a company has introduced similar new
products into similar markets in the past, these histories can often be good predictors of future outcomes.
› If a company has no such history, then histories of similar new products introduced by competitors or other companies can serve as historical guidelines.
33
A second method of forecasting new product success is the test market. › The new product is developed and
introduced into one or more test markets. Actual store sales and market shares are tracked via Nielsen or IRI, or data from retailers in some instances.
› Often this sales tracking is supplemented by survey-based tracking of consumer awareness, trial, usage, and repeat purchase patterns.
› In some instances, consumer diary panels or purchase panels are used to track consumer trial, repeat purchases, and share.
34
A third method of forecasting is before-after retail simulation. A sample of target audience consumers is presented with simulations showing the in-store retail environment and a realistic display of all the major brands in the category. The consumer is asked to choose or “purchase” brands as they normally would, or as they might on their next 10 purchases. › The new product is missing from the simulation during this
“before” measurement.
› Then the consumer is exposed to the new product concept and/or advertising that conveys the new product concept.
› Later, the consumer sees the exact same simulated display (except now it contains the new product) and is asked to make the same choices or purchase decisions as before. So, we have market shares for all brands in the category before the new product is introduced, and the same data after the new brand is introduced.
35