Please enable JavaScript.
Coggle requires JavaScript to display documents.
T6: Pt1 New products (Ch21) (New product development process…
T6: Pt1 New products (Ch21)
Consumer adoption process (p.742)
Theory of the diffusion of innovation
- the spread of a new idea from is creation to is ultimate users
Stages
Awareness
Interest
Evaluation
Trial
Adoption
Leads to the 'Customer-loyalty process'
Aim: Marketers needs to support consumer movement through the stages, and oil any bottlenecks they find
Characteristics of the adoption process
Consumer readiness
Late majority - 34%
Laggards - 16%
Early majority - 34%
Early adopters - 13.5%
Innovators / Pioneers - 2.5%
Personal influence
Differing rates of adoption
Cost
Risk and uncertainty
Scientific credibility
Social approval
Organisational readiness
Community progressiveness and income
Org size, profits, pressure to change
Management variables - age / education / sophistication
Private or public (govt funded)
Public opinion
Basics
New product failure rate range from 50%-95%
A global company can leverage the culture strengths of each region to aid in new product development (p.721)
Goods and Services
Value delivery levels (p.386)
Expected product - set the standard expectations that come with the product, i.e. clean sheets, quiet, privacy, function facilities, etc (this is where most competition is in developing markets)
Augmented product - the things that exceed expectations, i.e. a bigger bed, a free upgrade, (this is where most competition takes place in developed markets)
Basic product - turning the need into a product, i.e. a hotel room and all it includes
Potential product - all the possibilities of the future
Core benefit - the real benefit the customer actual needs, i.e. sleep/rest
Methods
Make
Own labs/development
Contract development
Buy
Full acquisitions e.g. MF method
Acquire patents
License or franchise options
Types
Incremental innovation
Disruptive technologies
Challenges
Increased domestic and foreign competition
Shortened product life cycles
New technologies
Changing consumer needs and tastes
E.g. Google innovative culture table on p.718
New product development process
Marketing strategy development
The planned product positioning
Outline sales, market share, and profit goals for the first years
Describe target market size, structure, and behaviour
Business analysis (p.735)
Estimating total sales
Estimates of:
First-time sales
Replacement sales (more for infrequent items)
Repeat sales (more for frequent items)
Method dependant on type of product
One-time purchase, i.e. engagement ring
Infrequent purchase, i.e. car, appliances
Frequent purchase, i.e. consumables
Estimating costs and profits (see p. 736 for table with components to consider)
Concept development and testing - mapping and testing ideas p.732
Conjoint testing (p.733) - process of testing attribute combinations to find out what matters most
Product development (p.737)
Physical prototypes
Can take considerable time to develop, however technology is speeding this up
R&D depts. must determine if the product can be produced within budget
R&D must also determine effects from variations like colour, size, weight, etc
Customer tests
Alpha test - internal company testing
Beta test - external with customers
Idea screening - very important part to balance to not throw away good ideas but also not continue poor ideas
Market testing (p.737)
Considerations
Cost v risk
Exposure / Time delays
New-to-world product or just a modification
B2C market testing
Aim to determine trial, first repeat, adoption and purchase frequency
Methods, from least to most expensive
Sales-wave research
Simulated test marketing
Controlled test marketing
Test markets
Some companies bypass market testing and simply use a roll-out launch, adjusting and testing as they go
B2B market testing
Beta testing with select customers
Using trade shows for gathering data, although must be close to launch at this stage as is exposed to competitors at the same time
Distributor show rooms are also a potential option
May use similar methods to B2C but in the B2B environment
Idea generation (lot of ideas p.725-729)
Commercialisation - The Launch (p.740)
Where - geographic strategy
Distribution line considerations
Roll-out launch is popular
Company size is a major factor here
Internet is having a significant impact on the options here
Who? - Target market
Initial focus
Early adopters
Heavy users
Opinion leaders
Those that can be reached for low cost
Success in the early roll-out will attract further prospects
Timing considerations
Competitors movements
First entry (first mover advantage)
Parallel entry (benefit from both companies marketing)
Late entry (benefit from seeing competitors issues)
Situation with companies other products
Seasonal considerations
How - introductory market strategy
Launch often takes longer and costs more than expected and suffer from underfunding
Important to allow sufficient time and resources but avoid overspending
Critical Path Scheduling (CPS) - a master plan for all launch activities and timeframes - a Control method