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Chapter 9- slide 1
New-Product Development
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Chapter 9- slide 2Copyright 2010 Pearson Education,
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New-Product Development andProduct Life-Cycle Strategies
New-Product Development Strategy
New-Product Development Process
Managing New-Product Development
Product Life-Cycle Strategies
Additional Product and Service
Considerations
Topic Outline
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Chapter 9- slide 3Copyright 2010 Pearson Education,
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New-Product Development Strategy
Acquisition refers to the buying of a wholecompany, a patent, or
a license to producesomeone elses product
New product development refers to original
products, product improvements, productmodifications, and new
brands developed fromthe firms own research and development
Two ways to obtain new products
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Chapter 9- slide 4Copyright 2010 Pearson Education,
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New-Product DevelopmentReasons for new product failure
Overestimation of market size
Poor design
Incorrect positioning
Wrong timing
Priced too high
Ineffective promotion
Management influence
High development costs
Competition
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Chapter 9- slide 5Copyright 2010 Pearson Education,
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New-Product Development Process
Major Stages in New-Product Development
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Chapter 9- slide 6Copyright 2010 Pearson Education,
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New-Product Development Process
Idea generation is the systematic searchfor new-product
ideas
Sources of new-product ideas Internal External
Idea Generation
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Publishing as Prentice Hall
New-Product Development Process
Internal sources refer to the companys own formalresearch and
development, management and staff,and intrapreneurial programs
External sources refer to sources outside the companysuch as
customers, competitors, distributors,suppliers, and outside design
firms
Idea Generation
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New-Product Development Process
Identify good ideas and drop poor ideas
R-W-W Screening Framework: Is it real?
Can we win?
Is it worth doing?
Idea Screening
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New-Product Development Process
Product idea is an idea for a possible productthat the company
can see itself offeringto the market
Product concept is a detailed version of theidea stated in
meaningful consumer
termsProduct image is the way consumers
perceive an actual or potential product
Concept Development and Testing
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New-Product Development Process
Concept testing refers to testing new-product
concepts with groups of target consumers
Concept Development and Testing
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Chapter 9- slide 11Copyright 2010 Pearson Education,
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New-Product Development Process
Marketing strategy development refers tothe initial marketing
strategy for
introducing the product to the market Marketing strategy
statement includes:
Description of the target market
Value proposition Sales and profit goals
Marketing Strategy Development
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Chapter 9- slide 12Copyright 2010 Pearson Education,
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New-Product Development Process
Business analysis involves a review of thesales, costs, and
profit projections to findout whether they satisfy the
companysobjectives
Marketing Strategy Development
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Chapter 9- slide 13Copyright 2010 Pearson Education,
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New-Product Development Process
Product development involves the creation
and testing of one or more physical versions bythe R&D or
engineering departments
Requires an increase in investment
Marketing Strategy Development
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Chapter 9- slide 14Copyright 2010 Pearson Education,
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New-Product Development Process
Test marketing is the stage at which theproduct and marketing
program areintroduced into more realistic marketing
settingsProvides the marketer with experience intesting the
product and entire marketingprogram before full introduction
Marketing Strategy Development
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Chapter 9- slide 15Copyright 2010 Pearson Education,
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New-Product Development Process
Types of Test Markets
Standard test markets
Controlled test markets Simulated test markets
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Chapter 9- slide 16Copyright 2010 Pearson Education,
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New-Product DevelopmentProcess
Advantages of simulated test markets Less expensive than other
test methods
Faster
Restricts access by competitors
Disadvantages Not considered as reliable and accurate due to
the controlled setting
Marketing Strategy Development
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Chapter 9- slide 17Copyright 2010 Pearson Education,
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New-Product Development Process
Marketing Strategy DevelopmentWhen firms test
market
New productwith largeinvestment
Uncertaintyabout productor marketingprogram
When firms maynot test market
Simple lineextension Copy of
competitorproduct
Low costs Management
confidence
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Chapter 9- slide 18Copyright 2010 Pearson Education, Inc.P bli
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New-Product Development Process
Commercialization is the introduction
of the new product When to launch
Where to launch
Planned marketrollout
Marketing Strategy Development
