These questions are the learning objectives guiding the chapter and will be explored in more detail in the following slides.
A new product can be anything from a slight redesign to new-to-the-world offerings. Ask students: What is an example of a slightly redesigned product? What about a new-to-the-world product? Ask students : Think of a new product that interested you as a consumer. Did this new product alter your opinion of the firm that offered it?
Despite first-mover advantages, pioneers often lose out to superior competitors. For example, DVD walkmans have been taken over by apple iPods. First movers must staunchly defend their territory. After establishing the market, they generally must switch to a defender mode to fend off newcomers.
Group activity: Have groups pick one product. Ask them; what group of consumers would purchase this product? Why? Example answer: TiVo has been around for about 10 years, it is probably in the early or late majority stages. Cable television, on the other hand, is now appealing to laggards; whereas some new cell phones are appealing to innovators and early adopters. Ask students where they are on the curve? If they are laggards – what have they recently purchased or not yet purchased?
Different products diffuse at different rates. Various factors increase the speed of diffusion of a new product. Group activity : Continue with the previous group activity. Assess why some of the products chosen by the groups diffused more quickly than others by applying the four criteria in the boxes.
This slide is designed to introduce the new product development process and the steps to follow. Group activity: Have each student group think of a new product. It need not be a “new-to-the-world” product. Then have them follow the steps in the New Product Development Process and describe what they would do at each step. This exercise might take an hour or so, so it may be used as an out of class assignment. Have students present their process to the rest of the group .
Firms must constantly scan the environment looking for new product ideas. Depending on the company strategy, they use different sources.
Larger firms often maintain their own R&D department and rely on it to generate new products that will lead the market. This YouTube link (always check before class) is for Pepsi Crystal – a new product invented by Pepsi which did not last long on the market.
To defray large new product development costs, firms/governments may join forces with educational institutions. Group activity: Investigate whether any research groups work through your university. How might their findings help firms develop new products?
Firms license the use of new products, technology and processes. Small biotech firms frequently license their inventions to larger pharmaceutical firms
Many firms, such as ConAgra, now give employees time to develop new products and new ideas, and then showcase them in employee new product shows. This web link brings you to IDEO.com. Like Inventables from the first slide, they are a design firm that helps clients generate new product ideas .
Products with patents or other proprietary protections cannot be copied, so reverse engineered products must be substantively different from their source product.
Fashion-based product lines often identify trend leaders and watch them to gather new ideas. Ask students: Have you ever modified a product, e.g., apparel, a car? Why did you do it?
Concepts are presented to potential buyers or users to gauge their reactions. Marketing research techniques discussed in chapter 9 are used to test these concepts.
A prototype allows consumers to interact physically with the product. Some prototypes, such as the concept cars revealed at auto shows, never actually go into production. Before releasing its new Vista package in 2007, Microsoft began beta testing in August 2005 to gather feedback from computer aficionados.
Premarket test are conducted by research firms, such as ACNielsen (BASES II). Because test marketing reveals a new product to competitors, it might be inappropriate to expose some new products this way. Ask students : Think of some products that you think should not be subjected to test marketing. Why not? Answer: incremental improvements on existing products (such as a new flavor of soda), small niche products because they only appeal to small market, products that could easily be copied by competition, etc. This YouTube link (always check before class) is a funny commercial for Dodge where they are getting input from customers.
Ask students : In the rush to get a product to the market, some firms fail to conduct the necessary market tests. What happens then? Students will realize that these new products often fail because the either don’t offer value or cannot communicate value to the end consumer.
Launching a new product is part art and part science. Each of these products offered unique benefits. Ask students if they feel each would be successful? Drink and Crunch is still only in limited release so its success in not yet known. Minute Maid Heart Wise was introduced in 2003 and has been extremely successful. Aquafresh Floss N’Cap has been expanded to other Aquafresh lines including whitening.
The right product must hit the market at the right time and for the right price. It matters little how good a product is if the launch lacks sufficient resources. Group activity : Continue with the same products the students have been working with. Design the marketing mix required to launch it. How will you communicate its benefits? What types of distribution will you use? How will you determine the price? When will you launch?
“ Timing is everything” may be an old saying, but it is only too true for new product success.
Marketers cannot only celebrate success but also must understand failure. The question of why a product fails is just as important as why another succeeded. An underperforming product may require further development.
The PLC represents an important tool managers use to plan their marketing activities.
At each stage of the lifecycle, the marketing mix elements change in response to the marketplace. Group activity : List products that currently exist in each of the stages. What marketing mix would you design for each of these products?
Understanding where your product is on the PLC is difficult. If a firm misdiagnoses the stage, it can mean trouble for the firm. Ask students : What happens to a product that is misdiagnosed as being in the decline stage? Answer: It will surely decline!
Visit the inventables playground through this web link which links to their “playground” blog . Their “technology Hunters” go out to find what is new and interesting. Ask students who would be interested in this job and why? Ask them what kind of background they would need? Most “hunters” have some experience in material sciences and need skills in interviewing and researching.
Discuss the difficulties associated with the introduction stage, especially if the product is totally new to the world. Ask students : What challenges do firms face in this stage?
This ad is very good to discuss how the PLC can be for a product category, a brand, or an individual product in the line. The Mucinex brand itself is in a very mature category. The brand has only been around for a few years and is still in the growth stage. This particular product is in the introduction stage of the PLC.
Discuss the concept of the “tipping point” — the transition between introduction and growth when the product either gains market acceptance or must exit the market. The majority of new products fail at this point.
Clorox wipes compete in a market that is attracting many new offerings every year. They must continue to fight for customer acceptance and market share.
Most U.S. products are in the maturity stage, which means most U.S. firms must engage in defending their market share. In the battle for soft drinks, a very mature market,, a 1% market share switch between Coke and Pepsi can account for millions of dollars in revenue Ask students : What marketing activities should firms engage in at this stage? .
The market for mattresses is very mature. However, brand like Sealy continue to innovate to prolong the maturity phase.
Ask students : If your company’s product were in its decline stage, how would you determine whether to update the product, continue offering it for a small segment, or exit the market completely?
Pirating is big – many would like to see a decline in this behavior and for related products to be in the decline stage of the PLC. In fact, there is huge growth in downloadable products to help copy software, movies and music.
Innovators, early adopters, early majority, late majority, laggards. Relative advantage, compatibility, complexity and trialability
First, they generate ideas for the product or service. Second, firms test their concepts by either describing the idea of the new product or service to potential customers or showing them images of what the product would look like. Third, the design process entails determining what the product or service will actually include and provide. Fourth, firms test market their designs. Fifth, if everything goes well in the test market, the product is launched. Sixth, firms must evaluate the new product or service to determine its success. Internal research and development (R&D) efforts, collaborate with other firms and institutions, license technology from research-intensive firms, brainstorm, research competitors’ products and services, and/or conduct consumer research;
Introduction, growth, maturity, decline Profits and sales grow until maturity and then begin to decline