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Chapter 9: Developing New Products and Managing the Product Life Cycle -…
Chapter 9: Developing New Products and Managing the Product Life Cycle
New Product Development
Development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts.
Ways to Obtain New Products
Acquisition
Buying of a whole company, a patent, or a license to produce someone else’s product.
New product development
Original products, product improvements, product modifications, and new brands developed from the firm’s own research and development.
New Product Development Process
4. Marketing Strategy Development
designing an initial marketing strategy for a
new product based on the product concept
5. Business Analysis
a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives
3. Concept development and testing
product concept
a detailed version of the new-product idea stated in meaningful consumer terms
concept testing
testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
6. Product Development
developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
2. Idea Screening
screening new-product ideas to spot good ideas and drop poor ones as soon as possible.
7.Test Marketing
the stage of new-product development in which the product and its proposed marketing program are tested in realistic market settings
1. Idea Generation
the systematic search for new-product ideas
8. Commercialization
introducing a new product into the market
Successful
new product
development should be:
Team based
an approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness
Systematic
Innovation management system creates an innovation-oriented company culture and yields a large number of new product ideas
Customer Centered
new-product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences
Product Life Cycle
the course of a product's sales and profit over its lifetime
PLC Concept
Fashion
a currently accepted or popular style in a given field
Fad
a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Style
a basic and distinctive mode of expression
PLC Stages
2.Growth Stage
the PLC stage in which a product's
sales start climbing quickly
Economies of scale
Consumer education
Profits increase
New competitors enter the market
Sales increase
Lowering prices to attract more buyers
3. Maturity Stage
the PLC stage in which a product's
sales growth slows or levels off
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D
to support sales and profits
1. Introduction Stage
the PLC stage in which a new product is first
distributed and made available for purchase
High distribution and promotion expenses
Little or no profit
Slow sales growth
4. Decline Stage
the PLC stage in which a
product's sales fade away
Harvest the product
Drop the product
Maintain the product