C9 Developing New Products and Managing the Product Life Cycle (The New…
C9 Developing New Products
and Managing the Product Life Cycle
New Product Development Strategy
The New Product Development Process
Internal Idea Sources
External Idea Sources
Inviting broad communities of people— customers, employees, independent scientists and researchers, and even the public at large—into the new product innovation process.
Concept Development and Testing
to develop this new product into alternative product concepts, find out how attractive each concept is to customers, and choose the best one
Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
asks about the consumer’s intention
A detailed version of the new product idea stated in meaningful consumer terms.
Real, Win, Worth-doing
Is it real?
Can we win?
Is it worth doing?
Two types of error
Avoid this error ( Dropping good ideas )
Avoid this error as well
Screening new product ideas to spot good ones and drop poor ones as soon as possible.
Marketing Strategy Development
Describe First Year
outlines the product’s planned
price, distribution, and marketing budget for the first year
3 Describe Long-Term
describes the planned long-run
sales, profit goals, and marketing mix strategy
describes the target market; the planned value proposition; and the sales, market-share, and profit goals for the first few years
Designing an initial marketing strategy for a new product based on the product concept.
Potential for Profit
Potential for demand
A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives
To estimate sales, the company might look at the sales history of similar products and
conduct market surveys
Controlled Test Market
new products and tactics are tested among controlled panels
of shoppers and stores
Simulated Test Market
Downside of simulated
researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments
Standard Test Market
The stage of new product development in which the product and its proposed marketing program are tested in realistic market settings.
After business analysis, review of product sales etc,
If no, eliminate product concept
If yes move to product development
Managing New Product Development
Customer-Centered New Product Development
focuses on finding new ways to solve customer problems and create more customer satisfying experiences.
most successful new products are ones that are differentiated,
solve major customer problems, and offer a compelling customer value proposition
companies that directly engage their customers in the new product innovation process had twice the return on assets and triple the growth in operating income of firms that did not
customer involvement has a positive effect on the
new product development process and product success
Choosing what kind of value
your innovation will create and then sticking to that is critical,” says one expert
Team-Based New Product Development
Systematic New Product Development
When is thr right time to launch?
Where to launch?
Introduction of new product into the market place
Product Life-Cycle Strategies
period of rapid market acceptance and increasing profits
period of slowdown in sales growth because the product has
achieved acceptance by most potential buyers
a period of slow sales growth as the product is introduced in the
period when sales fall off and profits drop
Additional Product and Service Considerations
Product Decisions and Social Responsibility
International Product and Services Marketing
Why new products fail?
Poor Marketing Execution
High Development Cost
Overestimation of Demand
Challenges in New Product Development
Product Life Cycle Concept
Special Life Cycle
basic and distinctive mode