0
CONCEPT GENERATION & METHODOLOGY
Methods for Generating Product Concepts

Two Broad Categories of Methods:
• Gathering Ready-Made Product Concepts
• Using ...
Problem-Based Concept Generation
Major Stages in
New-Product Development

10- 4
New Product Development Strategy
• New Product Development Process:
– Stage 1: Idea Generation
• Internal idea sources:
–R...
3M’s corporate
culture
encourages,
supports, and
rewards new
product ideas
and innovation

10- 6
New Product Development Process
New Product Development Process
Step 1. Idea Generation
Step 1. Idea Generation

Systemati...
Using the Web to Solicit Product Ideas

Procter and Gamble

To see how P&G solicits ideas from customers, visit
the Procte...
New Product Development Strategy
• New Product Development Process:
– Stage 2: Idea Screening
• Product development
costs ...
New Product Development Process
New Product Development Process
Step 2. Idea Screening
Step 2. Idea Screening

• Process t...
New Product Development Strategy
• New Product Development Process:
– Stage 3: Concept Development and Testing
• Product c...
New Product Development Process
New Product Development Process

Step 3. Concept Development & Testing
Step 3. Concept Dev...
New Product Development Strategy
• New Product Development Process:
– Stage 4: Marketing Strategy Development
• Strategy s...
New Product Development Process
New Product Development Process

Step 4. Marketing Strategy Development
Step 4. Marketing ...
New Product Development Strategy
• New Product Development Process:
– Stage 5: Business Analysis
• Sales, cost, and profit...
New Product Development Process
New Product Development Process
Step 5. Business Analysis
Step 5. Business Analysis
Step 6...
THE NEW-PRODUCT PROCESSBusiness Analysis
• if positive, build a prototype
Demand
Considerations
Considerations
in
in
Busin...
New Product Development Strategy
• New Product Development Process:
– Stage 7: Test Marketing
• Standard test markets
• Co...
New Product Development Process
New Product Development Process
Step 7. Test Marketing
Step 7. Test Marketing
Standard
Sta...
THE NEW-PRODUCT PROCESSMarketing

Test

The limited introduction of a product
and a marketing program to determine
the rea...
When Test Markets Don’t Work
Limited time to market
Service nature of the item
Time to see product benefit is long
 Nu...
Daimler is currently road-testing its
prototype NECAR 5 (New Electric Car)

10- 22
BusinessNow
Sensable Video Clip
Computer modeling
is being used to aid
in product design

10- 23
Benefits of test marketing
• Yields a more reliable forecast of future sales
than no testing.
• Can pre-test alternative m...
Actions from test marketing
• High trial, high repurchase rate
GO
• High trial, low repurchase rateDrop or
redesign produc...
New Product Development Strategy
IRI BehaviorScan
provides an inmarket laboratory
for testing new
products and
marketing p...
Sales and Profits
Over A Product’s Life

10- 27
Product Life-Cycle Strategies
• The Typical Product Life Cycle (PLC) Has
Five Stages
– Product Development, Introduction,
...
Figure 10-3:

Styles, Fashions, and Fads

10- 29
Companies
want their
products to
enjoy a long
life cycle.
Hershey’s
actively
promotes
the fact that
it has been
“unchanged...
Product Life-Cycle Strategies
• Additional marketing
investments can move a
product back into the
growth stage, as in the
...
Product Life-Cycle Strategies
PLC Stages
• Product
development
• Introduction
• Growth
• Maturity
• Decline

10- 32

• Beg...
Product Life-Cycle Strategies
PLC Stages
• Product
development
• Introduction
• Growth
• Maturity
• Decline

10- 33

• Low...
Marketing Strategies: Introduction
Stage
•
•
•
•

Product – Offer a basic product
Price – Use cost-plus basis to set
Distr...
Introduction Stage of the PLC
Sales
Sales

Low sales
Low sales

Costs
Costs

High cost per customer
High cost per customer...
Product Life-Cycle Strategies
PLC Stages
• Product
development
• Introduction
• Growth
• Maturity
• Decline

10- 36

• Rap...
Marketing Strategies:
Growth Stage
• Product – Offer product extensions, service,
warranty
• Price – Penetration pricing
•...
Growth Stage of the PLC
Sales
Sales

Rapidly rising sales
Rapidly rising sales

Costs
Costs

Average cost per customer
Ave...
Product Life-Cycle Strategies
PLC Stages
• Product
development
• Introduction
• Growth
• Maturity
• Decline

10- 39

• Sal...
Marketing Strategies:
Maturity Stage
•
•
•
•

Product – Diversify brand and models
Price – Set to match or beat competitio...
Maturity Stage of the PLC
Sales
Sales

Peak sales
Peak sales

Costs
Costs

Low cost per customer
Low cost per customer

Pr...
Product Life-Cycle Strategies
PLC Stages
• Product
development
• Introduction
• Growth
• Maturity
• Decline

10- 42

• Dec...
Marketing Strategies: Decline Stage
• Product – Phase out weak items
• Price – Cut price
• Distribution – Use selective di...
Decline Stage of the PLC

Sales
Sales

Declining sales
Declining sales

Costs
Costs

Low cost per customer
Low cost per cu...
Upcoming SlideShare
Loading in...5
×

Np process

370

Published on

Published in: Business, Design
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
370
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Clicking the Video Clip icon will launch a short video (typically between 20 seconds and 1 minute in length) extracted from one of the BusinessNow Video shorts that accompany the text. You must have RealPlayer, QuickTime, or Windows Media Player installed for the video clip to function correctly. From the VIEW menu, select COMMENTS to hide this box.
  • Transcript of "Np process"

    1. 1. CONCEPT GENERATION & METHODOLOGY
    2. 2. Methods for Generating Product Concepts Two Broad Categories of Methods: • Gathering Ready-Made Product Concepts • Using a Managed Process Run by the New Products Team
    3. 3. Problem-Based Concept Generation
    4. 4. Major Stages in New-Product Development 10- 4
    5. 5. New Product Development Strategy • New Product Development Process: – Stage 1: Idea Generation • Internal idea sources: –R&D • External idea sources: – Customers, competitors, distributors, suppliers 10- 5
    6. 6. 3M’s corporate culture encourages, supports, and rewards new product ideas and innovation 10- 6
    7. 7. New Product Development Process New Product Development Process Step 1. Idea Generation Step 1. Idea Generation Systematic Search for New Product Ideas Internal sources Customers Competitors Distributors Suppliers
    8. 8. Using the Web to Solicit Product Ideas Procter and Gamble To see how P&G solicits ideas from customers, visit the Procter and Gamble home page, click on the Resources and Offers button, then select the Share Your Thoughts listing. Procter & Gamble 10- 8
    9. 9. New Product Development Strategy • New Product Development Process: – Stage 2: Idea Screening • Product development costs increase dramatically in later stages. • Ideas are evaluated against criteria; most are eliminated. 10- 9
    10. 10. New Product Development Process New Product Development Process Step 2. Idea Screening Step 2. Idea Screening • Process to spot good ideas and drop poor ones • Criteria – Market Size – Product Price – Development Time & Costs – Manufacturing Costs – Rate of Return
    11. 11. New Product Development Strategy • New Product Development Process: – Stage 3: Concept Development and Testing • Product concepts provide detailed versions of new product ideas. • Consumers evaluate ideas in concept tests. 10- 11
    12. 12. New Product Development Process New Product Development Process Step 3. Concept Development & Testing Step 3. Concept Development & Testing 1. Develop Product Ideas into 1. Develop Product Ideas into Alternative Alternative Product Concepts Product Concepts 2. Concept Testing --Test the 2. Concept Testing Test the Product Concepts with Groups Product Concepts with Groups of Target Customers of Target Customers 3. Choose the Best One 3. Choose the Best One
    13. 13. New Product Development Strategy • New Product Development Process: – Stage 4: Marketing Strategy Development • Strategy statements describe: – The target market, product positioning, and sales, share, and profit goals for the first few years. – Product price, distribution, and marketing budget for the first year. – Long-run sales and profit goals and the marketing mix strategy. 10- 13
    14. 14. New Product Development Process New Product Development Process Step 4. Marketing Strategy Development Step 4. Marketing Strategy Development Marketing Strategy Statement Formulation Part One -- Overall: Part One Overall: Target Market Target Market Planned Product Positioning Planned Product Positioning Sales & Profit Goals Sales & Profit Goals Market Share Market Share Part Two -- Short-Term: Part Two Short-Term: Product’s Planned Price Product’s Planned Price Distribution Distribution Marketing Budget Marketing Budget Part Three -- Long-Term: Part Three Long-Term: Sales & Profit Goals Sales & Profit Goals Marketing Mix Strategy Marketing Mix Strategy
    15. 15. New Product Development Strategy • New Product Development Process: – Stage 5: Business Analysis • Sales, cost, and profit projections – Stage 6: Product Development • Prototype development and testing 10- 15
    16. 16. New Product Development Process New Product Development Process Step 5. Business Analysis Step 5. Business Analysis Step 6. Product Development Step 6. Product Development Business Analysis Business Analysis Review of Product Sales, Costs, Review of Product Sales, Costs, and Profits Projections to See if and Profits Projections to See if They Meet Company Objectives They Meet Company Objectives If No, Eliminate If No, Eliminate Product Concept Product Concept If Yes, Move to If Yes, Move to Product Development Product Development
    17. 17. THE NEW-PRODUCT PROCESSBusiness Analysis • if positive, build a prototype Demand Considerations Considerations in in Business Business Analysis Stage Analysis Stage Cost Sales Profitability
    18. 18. New Product Development Strategy • New Product Development Process: – Stage 7: Test Marketing • Standard test markets • Controlled test markets • Simulated test markets – Stage 8: Commercialization 10- 18
    19. 19. New Product Development Process New Product Development Process Step 7. Test Marketing Step 7. Test Marketing Standard Standard Test Market Test Market Full marketing campaign Full marketing campaign in a small number of in a small number of representative cities. representative cities. Controlled Controlled Test Market Test Market A few stores that have A few stores that have agreed to carry new agreed to carry new products for a fee. products for a fee. Simulated Simulated Test Market Test Market Test in a simulated Test in a simulated shopping environment shopping environment to a sample of to a sample of consumers. consumers.
    20. 20. THE NEW-PRODUCT PROCESSMarketing Test The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
    21. 21. When Test Markets Don’t Work Limited time to market Service nature of the item Time to see product benefit is long  Number of units produced is small
    22. 22. Daimler is currently road-testing its prototype NECAR 5 (New Electric Car) 10- 22
    23. 23. BusinessNow Sensable Video Clip Computer modeling is being used to aid in product design 10- 23
    24. 24. Benefits of test marketing • Yields a more reliable forecast of future sales than no testing. • Can pre-test alternative marketing plans. • May discover a product fault missed in the product development stage. • Discover clues to distribution problems. • Gain better insights into the behavior of different market segments.
    25. 25. Actions from test marketing • High trial, high repurchase rate GO • High trial, low repurchase rateDrop or redesign product • Low trial, high repurchase rate Increase advertising and sales promotion • Low trial, low repurchase rate Drop product
    26. 26. New Product Development Strategy IRI BehaviorScan provides an inmarket laboratory for testing new products and marketing programs IRI BehaviorScan 10- 26
    27. 27. Sales and Profits Over A Product’s Life 10- 27
    28. 28. Product Life-Cycle Strategies • The Typical Product Life Cycle (PLC) Has Five Stages – Product Development, Introduction, Growth, Maturity, Decline – Not all products follow this cycle: • Fads • Styles • Fashions 10- 28
    29. 29. Figure 10-3: Styles, Fashions, and Fads 10- 29
    30. 30. Companies want their products to enjoy a long life cycle. Hershey’s actively promotes the fact that it has been “unchanged since 1899” 10- 30
    31. 31. Product Life-Cycle Strategies • Additional marketing investments can move a product back into the growth stage, as in the case of Cracker Jack. 10- 31
    32. 32. Product Life-Cycle Strategies PLC Stages • Product development • Introduction • Growth • Maturity • Decline 10- 32 • Begins when the company develops a new-product idea • Sales are zero • Investment costs are high • Profits are negative
    33. 33. Product Life-Cycle Strategies PLC Stages • Product development • Introduction • Growth • Maturity • Decline 10- 33 • Low sales • High cost per customer acquired • Negative profits • Innovators are targeted • Little competition
    34. 34. Marketing Strategies: Introduction Stage • • • • Product – Offer a basic product Price – Use cost-plus basis to set Distribution – Build selective distribution Advertising – Build awareness among early adopters and dealers/resellers • Sales Promotion – Heavy expenditures to create trial 10- 34
    35. 35. Introduction Stage of the PLC Sales Sales Low sales Low sales Costs Costs High cost per customer High cost per customer Profits Profits Negative Negative Marketing Objectives Marketing Objectives Create product awareness Create product awareness and trial and trial Product Product Offer a basic product Offer a basic product Price Price Use cost-plus Use cost-plus Distribution Distribution Advertising Advertising Build selective distribution Build selective distribution Build product awareness among early Build product awareness among early adopters and dealers adopters and dealers
    36. 36. Product Life-Cycle Strategies PLC Stages • Product development • Introduction • Growth • Maturity • Decline 10- 36 • Rapidly rising sales • Average cost per customer • Rising profits • Early adopters are targeted • Growing competition
    37. 37. Marketing Strategies: Growth Stage • Product – Offer product extensions, service, warranty • Price – Penetration pricing • Distribution – Build intensive distribution • Advertising – Build awareness and interest in the mass market • Sales Promotion – Reduce expenditures to take advantage of consumer demand 10- 37
    38. 38. Growth Stage of the PLC Sales Sales Rapidly rising sales Rapidly rising sales Costs Costs Average cost per customer Average cost per customer Profits Profits Rising profits Rising profits Marketing Objectives Marketing Objectives Maximize market share Maximize market share Product Product Offer product extensions, service, Offer product extensions, service, warranty warranty Price to penetrate market Price to penetrate market Price Price Distribution Distribution Advertising Advertising Build intensive distribution Build intensive distribution Build awareness and interest in the Build awareness and interest in the mass market mass market
    39. 39. Product Life-Cycle Strategies PLC Stages • Product development • Introduction • Growth • Maturity • Decline 10- 39 • Sales peak • Low cost per customer • High profits • Middle majority are targeted • Competition begins to decline
    40. 40. Marketing Strategies: Maturity Stage • • • • Product – Diversify brand and models Price – Set to match or beat competition Distribution – Build more intensive distribution Advertising – Stress brand differences and benefits • Sales Promotion – Increase to encourage brand switching 10- 40
    41. 41. Maturity Stage of the PLC Sales Sales Peak sales Peak sales Costs Costs Low cost per customer Low cost per customer Profits Profits High profits High profits Marketing Objectives Marketing Objectives Maximize profit while defending Maximize profit while defending market share market share Product Product Diversify brand and models Diversify brand and models Price Price Price to match or best competitors Price to match or best competitors Distribution Distribution Advertising Advertising Build more intensive distribution Build more intensive distribution Stress brand differences and benefits Stress brand differences and benefits
    42. 42. Product Life-Cycle Strategies PLC Stages • Product development • Introduction • Growth • Maturity • Decline 10- 42 • Declining sales • Low cost per customer • Declining profits • Laggards are targeted • Declining competition
    43. 43. Marketing Strategies: Decline Stage • Product – Phase out weak items • Price – Cut price • Distribution – Use selective distribution: phase out unprofitable outlets • Advertising – Reduce to level needed to retain hard-core loyalists • Sales Promotion – Reduce to minimal level 10- 43
    44. 44. Decline Stage of the PLC Sales Sales Declining sales Declining sales Costs Costs Low cost per customer Low cost per customer Profits Profits Declining profits Declining profits Marketing Objectives Marketing Objectives Reduce expenditure and milk the brand Reduce expenditure and milk the brand Product Product Phase out weak items Phase out weak items Price Price Cut price Cut price Distribution Distribution Advertising Advertising Go selective: phase out unprofitable Go selective: phase out unprofitable outlets outlets Reduce to level needed to retain Reduce to level needed to retain hard-core loyal customers hard-core loyal customers
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×