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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?
20-4
Categories of New Products
New-to-the-world
Cost reductions
New product lines
Additions
Improvements
Repositionings
20-6
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
20-8
Venture Team
Cross-functional group charged withdeveloping a specific product or business; intrapreneurs are relieved of other dutiesand provided a budget and time frame.
20-9
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
20-11
Idea Generation: Creativity Techniques
• Attribute listing• Forced relationships• Morphological
analysis• Reverse assumption
analysis• New contexts• Mind mapping
20-12
Lateral Mapping
• Gas stations + food• Cafeteria + Internet• Cereal + snacking• Candy + toy• Audio + portable
20-13
Variations on Failure
• Absolute product failure• Partial product failure• Relative product failure
20-15
Concepts in Concept Development
• Product idea
• Product concept
• Category concept
• Brand concept
• Concept testing
20-16
Concept Testing
• Communicability and believability
• Need level
• Gap level
• Perceived value
• Purchase intention
• User targets, purchase occasions, purchasing frequency
20-19
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
20-22
Product Development
• Quality function deployment (QFD)– Customer attributes– Engineering
attributes
20-23
Prototype Testing
• Alpha testing
• Beta testing
– Rank-order method
– Paired-comparison method
– Monadic-rating method
• Market testing
20-24
Consumer Goods Market Testing
• Sales-Wave Research• Simulated Test
Marketing• Controlled Test
Marketing• Test Markets
20-25
Test Market Decisions
• How many test cities?
• Which cities?
• Length of test?
• What information?
• What action to take?
20-27
Criteria for Choosing Rollout Markets
• Market potential
• Company’s local reputation
• Cost of filling pipeline
• Cost of communication media
20-28
Consumer-Adoption Process
Adoption is an individual’s decision
to become a regular user
of a product.
20-31
Characteristics of an Innovation
• Relative advantage
• Compatibility
• Complexity
• Divisibility
• Communicability
20-32
Marketing Debate
Who should you target with new products?
Take a position:1. New products should always target newadopters.2. New products should target the broadestmarket possible.