New+products+f2012

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New+products+f2012

  1. 1. New Products• New product strategy• New product development process• Adoption and diffusion• Product Life Cycle (PLC)
  2. 2. New Product Strategies• Pioneering, New-to-the-world – Never seen before – High risk • Technological • Market/commercial – High expense – High potential return• Incremental – “Second but better” – Medium risk – Medium expense – Medium potential return
  3. 3. New Product Strategies• “Me-Too” – Copy of existing competitor’s product – Low risk – Low expense – Low potential return• MP3 Players – Invention of player – iPod, better than previous versions • Design • Coordination with downloading service – iPod clones
  4. 4. New Product Development Process New-Product Development Process New-Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization New Product2 Chapter 9 Cop yright ©2006 by S outh-Western , a division of Thomson L ear nin g. All 9 righ ts reserved
  5. 5. New Product Development Process• Idea generation – Sources of ideas: employees, customers, collaborators, etc.• Idea screening – Technology, market, fit with current strategies and products, etc.• Business analysis – Forecasting, pro forma accounting• Development – Prototype – Scaleup• Testing – , , test markets• Commercialization – 5% success rate, 1-2% profitable
  6. 6. Percentage of Adopters Adoption and Diffusion Early Early Late Innovators Adopters Majority Majority Laggards 2.5% 13.5% 34% 34% 16% Time
  7. 7. Adoption and Diffusion• Variables affecting adoption – Complexity – Compatibility – Relative advantage – Observability – Trialability• Diffusion – Patterns – Word-of-mouth, opinion leaders
  8. 8. Product Life Cycle Introductory Growth Maturity Decline Stage Stage Stage Stage SalesDollars Profits 0 Time
  9. 9. Product Life Cycle• Introductory – Growing industry sales, few competitors, look to generate trial, seek to gain distribution• Growth – Rapidly growing industry sales, more competitors, price to penetrate, expand distribution, trying to grab market share• Maturity – Industry sales level off at peak, market shares stabilize, price for profit, shakeout of competitors, widest distribution, differentiate products• Decline – Industry sales drop, more shakeout, milk remaining markets, cull distributors• Note industry, length, possibility of new growth

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