Please enable JavaScript.
Coggle requires JavaScript to display documents.
Developing New Products and Managing the Product Life Cycle, NUR SHAKIRAH…
Developing New Products and Managing the Product Life Cycle
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.
Stages of New Product Development
Idea Generation
Internal sources
: company’s own formal research and development, management and staff, and intrapreneurial programs.
External sources
: customers, competitors, distributors, suppliers, and outside
Crowdsourcing
: inviting customers, employees, independent scientists and researchers into the new product innovation process
Idea Screening
Identify good ideas and drop poor ideas
Concept Development and Testing
Product idea
is an idea for a possible product that the company can see itself offering to the market.
Product concept
is a detailed version of the idea stated in meaningful consumer terms.
Product image
is the way consumers perceive an actual or potential product.
Marketing Strategy Development
Target market description
Value proposition planned
Sales, market-share, and marketing mix
Business Analysis
review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.
Product Development
developing the product concept into a physical product.
Test Marketing
proposed marketing program are tested in realistic market settings
Commercialization
Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).
Product Life-Cycle Strategies (Characteristics & Objectives)
Introduction Stage
Sales: Low
Costs: High cost per customer
Profits: Negative or low
Customers: Innovators
Competitors: Few
objective: Create product awareness and trials.
Product Development
Sales: Zero
Growth
Sales: Rapidly rising
Costs: Average cost per customer
Profits: Rising profits
Customers: Early adopters
Competitors: Growing number
objective: Maximize market share
Maturity
Sales: Peak sales
Costs: Low cost per customer
Profits: High profits
Customers: Middle majority
Competitors: Stable number beginning to decline
objective: Maximize profits while defending market share.
Decline
Sales: Declining sales
Costs: Low cost per customer
Profits: Declining profits
Customers: Laggards
Competition: Declining number
objective: Reduce expenditures and milk the brand.
Managing New-Product Development
Customer centered new-product development:
Focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.
Team-based new-product development:
Various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.
Systematic new-product development:
Innovation management systems collect, review, evaluate, and manage new-product ideas.
New Product Development in Turbulent Times
Tempted to reduce spending, become less competitive
Product Life-Cycle Strategies (Strategies)
Maturity
Product: Diversify brand and models.
Price: Match our best competitors.
Distribution: Build more intensive distribution.
Advertising: Stress brand differences and benefits.
Promotion: Increase to encourage brand switching.
Decline
Product: Phase out weak items.
Price: Cut price.
Distribution: Go selective—phase out unprofitable outlets.
Advertising: Reduce to level needed to retain hardcore loyals.
Promotion: Reduce to minimal level.
Growth
Product: Offer product extensions, service, warranty.
Price: Price to penetrate the market.
Distribution: Build intensive distribution.
Advertising: Build awareness and interest in the mass market.
Promotion: Reduce to take advantage of heavy consumer demand.
Introduction Stage
Product: Offer a basic product.
Price: Use cost-plus pricing.
Distribution: Build selective distribution.
Advertising: Build product awareness among early adopters and dealers.
Promotion: Use heavy promotion to entice product trial.
Additional Product and Service Considerations
Product Decisions and Social Responsibility
International Product and Service Marketing
NUR SHAKIRAH BINTI MOHD SEDEK - KME2 - 1220834