2. Why New Products FailWhy New Products Fail
““Over Championing”Over Championing”
Overestimated DemandOverestimated Demand
Poor DesignPoor Design
Poor Marketing ExecutionPoor Marketing Execution
High Development CostsHigh Development Costs
Strong Competitive ReactionStrong Competitive Reaction

3. Challenges in NPDChallenges in NPD
Idea ShortageIdea Shortage
Fragmented MarketsFragmented Markets
Social & Governmental ConstraintsSocial & Governmental Constraints
CostCost
Capital ShortageCapital Shortage
Need for SpeedNeed for Speed
Shorter Product Life CyclesShorter Product Life Cycles

4. New Product DevelopmentNew Product Development
ProcessProcess
IdeaIdea
GenerationGeneration
ConceptConcept
DevelopmentDevelopment
and Testingand Testing
MarketingMarketing
StrategyStrategy
DevelopmentDevelopment
IdeaIdea
ScreeningScreening
BusinessBusiness
AnalysisAnalysis
ProductProduct
DevelopmentDevelopment
MarketMarket
TestingTesting
CommercializationCommercialization

5. Probability of SuccessProbability of Success
ProbabilityProbability
of technicalof technical
completioncompletion
OverallOverall
probabilityprobability
of successof success ==
Probability ofProbability of
commercializationcommercialization
given technicalgiven technical
completioncompletion
XX
Probability ofProbability of
economiceconomic
success givensuccess given
commercializationcommercialization
XX

6. Concept Development &Concept Development &
TestingTesting
1. Develop Product Ideas into
Alternative Product Concepts
1. Develop Product Ideas into
Alternative Product Concepts
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
3. Choose the Best One3. Choose the Best One

7. High price/oz.High price/oz.
LowincaloriesLowincalories
Low price/oz.Low price/oz.
HighincaloriesHighincalories
Product & BrandProduct & Brand
PositioningPositioning
(a) Product-positioning(a) Product-positioning
mapmap
(breakfast market)(breakfast market)
ExpensiveExpensive
SlowSlow
InexpensiveInexpensive
QuickQuickBacon
and
eggs
Pancakes Instant
breakfast
Cold
cereal
Hot
cereal
b) Brand-positioningb) Brand-positioning
mapmap
(instant breakfast market)(instant breakfast market)
Brand C
Brand B
Brand A

8. Consumer-Goods MarketConsumer-Goods Market
TestingTesting
Sales-
Wave
Research
Test offering trail to
a sample of
consumers in
successive
periods.
Sales-
Wave
Research
Test offering trail to
a sample of
consumers in
successive
periods.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.

9. CommercializationCommercialization
When
Whom
Where

10. 2 1
/2%
Innovators
13 1
/2%
Early
adopters
34%
Early
majority
34%
Late
majority
16%
Laggards
Time of adoption innovations
Adopter Categorization of the Basis ofAdopter Categorization of the Basis of
Relative Time of Adoption of InnovationsRelative Time of Adoption of Innovations

11. Characteristics of theCharacteristics of the
Innovation Rate of AdoptionInnovation Rate of Adoption
Relative advantageRelative advantage
CompatibilityCompatibility
ComplexityComplexity
DivisibilityDivisibility
CommunicabilityCommunicability