NPD & PLC
New Product Ideas From
Acquired Companies
Acquired Patents
Acquired Licenses
Original Product
Product Improvements
Product Modifications
New Brands
New Products
What is it?
Why does it fail?
New to the world products
New product lines
Additions to existing product lines
Improvements & Revisions
Repositioning
Cost Reduction
click to edit
EG: Johnson&Johnson reposition to make products for young adults due to declining birthrates
click to edit
Over Championing
Insufficient Differentiation
Poor Design
Poor Marketing Execution
High Development Costs
Strong Competition
Overestimation of Demand
click to edit
EG: Levis Introducing Formal wear
click to edit
EG: Bubbletea everywhere
click to edit
EG: Tobacco company created a huge quantity of smokeless cigarettes
click to edit
Two Dimension of Newness
HNF & L/MNM Product/Company Fit
HNM & L/MNF Product/Market Fit
L/MNF & L/MNM Cannibalization/Incremental Sales
To Improve Success
Understand consumers, markets & competitors
Product must deliver superior value
Must have a well defined-product concept
click to edit
New Product Development
Challenges
Idea shortage
Fragmented Market
Social & Govt Constraints
Cost
Capital Shortage
Need for Speed
Shorter PLC
click to edit
EG: Saturated markets
click to edit
EG: Fragmented markets requires more efforts to cater to all
click to edit
EG: Strict Government Regulations/Social Groups
click to edit
EG: Apple & Iphone competing to launch better products
click to edit
EG: Shorter PLC = Shorter Replacement Cycle = More "me too" products
click to edit
Process
Idea Generation
Idea Screening
Concept Development
Marketing Strategy
Business Analysis
Product Development
Market Testing
Commercialization
click to edit
click to edit
Drop Error - Dropping a good idea
Go Error - Going with a bad idea
To rejuvenate the PLC
Lego Intentionally replace 1/3 of their products every year
click to edit
1) Develop product ideas into concepts
2) Test Concepts
3) Choose the concept with the strongest appeal
click to edit
1) Describes Overall
2) Describes First Year
3) Describe Long Term
click to edit
Estimate Potential Profit & Demand
click to edit
If Potential Profit & Demand meets company's objective, develop the product
click to edit
Two Dimension of Risk
HS & LR Move Quickly and Safely
HS & HR Big Problem: Weigh Risks
LS & LR Other Factors Dictate Timing
LS & HR Wait & Get it Right
Standard
Simulated
Controlled
click to edit
Expose Product to small no. of representative cities, danger of epening your product to competition
Expose Product to afew stores, danger of opening product to competition
Simulated test environment. Can keep competitors out, but hard to determine success or failure
When and Where to launch the new product
click to edit
Product Life Cycle
Product Development
Intro
Growth
Maturity
Decline
Company starts to make a profit at the end of intro
click to edit
Profits is the highest at end of Growth
click to edit
Profits starts to decline after maturity
click to edit
Types of curve
Product Class
Product Form
Brand
Style
Fashion
Fad
click to edit
Longest Life Cycle
Standard PLC shape
Changes Quickly
Comes and go
Goes up very quickly but dies after the season
Shoots up and die really fast
Problems
Dk product at which stage
Difficult to forecast length and shape
Strategy is both cause and result of PLC
EG: Product at maturity stage. You decide to spend money on advertising it. You are unsure if the maturity is a result of the advertisement or you are advertising it because it is at maturity stage
click to edit
At Maturity
Modify Market
Modify Product
Modify Marketing Mix