New Product Development and Product Life-Cycle Strategies
New Product Development Strategy
Acquisition
The buying of a whole company, a patent, or a license to produce someone else's product
New prodcut development
Original products, product improvements, product modifications
New brands developed
The New-Product Development Process
Idea generation
Internal sources
Company's own formal R&D, management and staff, and intrapreneurial programs
External sources
Sources outside the company: customers, competitors, distributors, suppliers, and outside design firms
Idea Screening
Identify good ideas
Drop poor ideas
Concept Development and Testing
Concept Development
Concept testing
Product idea
Product concept
Product image
An idea for a possible product that the company can see itdelf offering to the market
A detailed version of the idea stated in meaningful consumer terms
The way consumers perceive an actual or potential product
Testing new-product concepts with groups of target consumers
Marketing Strategy Development
Description of the target market
Value proposition
Sales and profit goals
Business analysis
A review of the sales, costs, and profit projections to find out whether they satisfy the company's objectives
Product development
The creation and testing of one or more physical versions by the R&D or engineering departments
Requires an increase in investment
Test marketing
At which the product and marketing program are introduced into more realistic marketing settings
Provides the marketer with experience in testing the product and entire marketing program before full introduction
Types of Test Markets
Standard
Controlled
Simulated
Commercialization
Introduction a new product into the market
Additional Product and Service Considerations
Interational Product and Services Marketing - Challenges
Packaging and labeling
Customs, values, laws
Determining what products and services to introduce in which countries
Standardization versus customization
Product Decisions and Social Responsibility
Public policy and regulations regarding developing and dropping products, patents, quality, and safety
Product Life-Cycle Strategies
Fads
Temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Stages
Introduction
Slow sales growth
Little or no profit
High distribution and promotion expense
Growth
Profits increase
Price stability or decline to increase volume
Sales increase
New competitors enter the market
Consumer education
Promotion and manufacturing costs gain economies of scales
Maturity
Many suppliers
Substitute products
slowdown in sales
Decline
Drop the product
Maintain the product
Harvest the product
Managing New-Product Development
Customer-centered new product development
Finding new ways to solve customer problems
Create more customer satisfying experiences
Begins and ends with sloving customer problems
Sequential new-product development
Where company departments work closely together individually to complete each stage of the process before passing along to the next department or stage
Increased control in risky or complex projects
Slow
Team-based new-product development
Where company department work closely together in cross-functional teams, overlapping in the product-development process to save time and increase effectiveness
Systematic new-product development
An innovative development approach that collects, reviews, evaluated, and manages new-product ideas
Creates an innovation-oriented culture
Yields a large number of new-product ideas