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CHAPTER 9 - Coggle Diagram
CHAPTER 9
The new product development process
Idea genenation
Internal idea sources
formal R&D
heads of company business units
employees
External idea sources
distributors and suppliers
Competitors
trade magazines, shows, websites and seminars ...
customers
Crowdsourcing
customers
employees
independent scientists and researchers
public
Idea screening
spot good ideas and drop poor ones as soon as possible
is it real?
can we win?
is it worth doing?
Concept development and testing
Product concept: a detailed version of the new product idea stated in meaningful consumer terms
Concept development
develop this new product into alternative product concepts
find out how attractive each concept is to customers
choose the best one
Concept testing
testing new product concepts with groups of target consumers to find out if the concept have strong consumer appeal
Marketing strategy development
designing an initial marketing strategy for introducing a product to the market.
Marketing strategy statement
outlines the product’s planned price, distribution, and marketing budget for the first year
describes the planned long-term sales, profit goals and marketing mix strategy
A description of the target market;... and the sales, market share, and profit goals for the first few years.
Business analysis
involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company’s objectives
Product development
R&D or engineering develops the product concept into a physical product.
calls for a huge jump in investment
The new product must
have the required functional features
convey the intended psychological characteristics.
Test marketing
the product and its proposed marketing program are tested in realistic market settings
when the risks are high
when management is not sure of the product or its marketing programme
costs high
takes time
market opportunities to slip
competitors to gain advantages
controlled test markets
test consumer’s purchases with consumer demographic and media viewing information
simulated test markets
measure consumer responses
Commercialization
introducing the new product into the market.
Decisions must be made concerning
Where to launch the new product
Market rollout
Timing
Product life-cycle strategies
Growth
competitors increase
increase in the number of distribution outlets
sales jump to build reseller inventories
product’s sales start climbing quickly
Prices remain or decrease slightly
the same or a slightly higher level promotion spending
Profits increase, manufacturing costs decrease, promotion costs are spread
faces a trade-off between high market share and high current profit
capture a dominant position
Maturity
most products, mature product
greater competition
increasing their advertising and sales promotions
upping product development budgets
marking down prices
lasts longer and poses strong challenges
drop in profit
product’s sales growth slows or levels off
Product managers should
modifying the product
changing characteristics, packaging or technology platforms
creating new digital versions or add-ons for old favourites
modifying the market
increase consumption
increase usage
modifying the marketing mix
offer new or improved services
cut prices
launch a better advertising campaign or use aggressive sales promotions
move into new marketing channels
Introduction
new product is first launched
profits are negative or low
slow sales growth
Much money to attract distributors and build their inventories
high promotion spending
produce basic versions
Decline
decide whether to maintain, harvest or drop
sales fall off and profits drop
firms withdraw from the market
Product development
company finds & develops new product
Managing new product development
Sequential new-product development
complete each stage of the process
Increased control in risky or complex projects
Team-based new-product development
overlapping in the product-development process
save time and increase effectiveness
Customer-centered new product development
finding new ways to solve customer problems
create more customer satisfying experiences
Systematic new-product development
Creates an innovation-oriented culture
Yields a large number of new-product ideas
Additional product and service considerations
product decisions and social responsibility
carefully consider public issues and regulations regarding
product quality and safety
patent protection
product warranties
acquiring or dropping products
international product and services marketing
figure out what products and services to introduce and in which countries
decide how much to standardize or adapt their products and services for world markets
New product development strategy
a firm can obtain new product in two way
acquisition
by buying a whole company, a patent, or a license to product someone else'product
new product development
bring new solutions and variety to customer's lives
a key source of growth for companies
development of original products, product improvements, product modifications and new brand
can be very expensive and very risky , face tough odds