Chapter 20 intro new market offer
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This document discusses introducing new market offerings and managing new product development. It outlines the challenges of continuous innovation and new product success or failure. The key stages in development are outlined from idea generation through commercialization. Ideas can come from customers, trade shows, or employees. Concepts are tested and marketing strategies developed. Products then go through test markets and market adoption involves different stages as consumers become aware and eventually regular users. The challenges are developing good ideas, rigorous testing, and influencing consumer adoption which depends on many factors.
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Chapter 20 intro new market offer
- 1. 1 Introducing New Market Offerings Arnold A. Tolentino 7 February 2014 ONE
- 2. 5 Things to Know in Introducing New Market Offerings 1 Challenges 2 Organizational structures & processes 3 Stages in Development 4 Best ways to manage NPD ONE 5 Consumer Adoption
- 3. Challenges Continuous Innovation New Product Success Unique, superior product Well-defined product concept Produce locally, think globally New Product Failure ONE to seize new market opportunities and to create new choices Accept as part of the “game” to be successful
- 4. 5 Types of New Products 1 New to the World 2 Additions 3 Improvements 4 Repositioning 5 Cost reductions ONE
- 5. Organizational Structures for the Development Process SVP – Product Development Budget New Product Management ONE R&D Marketing
- 6. What is a Venture Team? A venture team is a crossfunctional group charged with developing a specific product or business; intrapreneurs are relieved of other duties and provided a budget and time frame. ONE
- 7. Criteria for Staffing Venture Teams Desired team leadership style Desired level of leader expertise Team member skills and expertise Level of interest in concept Potential for personal reward Diversity of team members ONE
- 8. New-Product Development Decision Process 1 Idea Generation Y Is it worth considering ? N 2 Idea Screening Is it compatible with corporate objectives? N Y 3 Concept Dev’t & Testing Can we find a good concept consumers say they would try? N DROP ONE Y 4 Mktg Strat Dev’t Can we find a costeffective, affordable mktg strategy? N Y 5 B’ness Analysis Will this product meet our businesss goals? N Y
- 9. New-Product Development Decision Process 6 Prod Dev’t Y Have we got a technically and c’mercially sound product? 7 Market Testing Have product sales met xpectations ? Y Send it back for prod dev’t? DROP ONE Y 8 Commer cialization Are product sales meeting xpectations ? Modify the prod or mktg program? Y Y Lay Future Plans
- 11. Stages in Managing the Development Process 1 Dream to Ideas 2 Concept to Strategy 3 Development to Commercialization ONE
- 12. Ideas : 10 Ways to Find Them 1. Run informal sessions 2. Technical people to putter on pet projects 3. Customer brainstorming as part of plant tours 4. Survey your customers 5. Undertake “fly on the wall” research 6. Use iterative rounds with customers 7. Do keyword search to scan trade publications 8. Treat trade shows as intelligence missions 9. Have employees visit supplier labs 10. Set up an idea vault ONE
- 13. Ideas : How to Obtain from Customers Observe how they use the product Ask about their problems with the products Ask about their dream products Use advisory board or a brand community of enthusiasts to discuss product Challenge them to change or improve your product ONE
- 14. Concept Testing Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency ONE
- 15. Marketing Strategy First Stage: Target market’s size, structure, and behavior Second Stage: Planned price, distribution, and promotion for year one Third Stage: Long-run sales and profit goals and marketing-mix strategy over time ONE
- 16. Test Market Decisions Select test cities Which cities Length of test What information to collect What action to take ONE
- 17. What is Adoption? Adoption is an individual’s decision to become a regular user of a product. ONE
- 18. 5 Stages in the Adoption Process Awareness (aware but lacks info) Interest (seek info) Evaluation (consider to try product) Trial (try to improve his estimate of its value) Adoption (decide as regular user) ONE
- 19. In Summary Company, to be competitive, must welcome all ideas for consideration to develop appropriate new products; New products developed must passed series of processes and rigid market tests, the challenge is on marketeer’s ability to ensure product adoption; The consumer-adoption process may be influenced by many factors beyond marketeer’s control, including consumers willingness to try new products. ONE
- 20. ONE ONE
Editor's Notes
- New-product development shapes the company’s future. Improved or replacement products and services can maintain or build sales; new-to-the-world products and services can transform industries and companies and change lives. But the low success rate of new products and services points to the many challenges they face. Companies are doing more than just talking about innovation. They are challenging industry norms and past conventions to develop new products and services that delight and engage consumers. This chapter provides a detailed analysis of the new-product development process.
- New-product development shapes the company’s future. Improved or replacement products and services can maintain or build sales; new-to-the-world products and services can transform industries and companies and change lives. But the low success rate of new products and services points to the many challenges they face. Companies are doing more than just talking about innovation. They are challenging industry norms and past conventions to develop new products and services that delight and engage consumers. This chapter provides a detailed analysis of the new-product development process.
- New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Some of the most successful recent new consumer products have been brand extensions: Tide Total Care, Gillette Venus Embrace, Bounce Extra Soft, Always Infinity, and Secret Flawless deodorant. At Sony, modifications of established products account for over 80 percent of new-product activity. It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up and also broaden the brand meaning.
- New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Some of the most successful recent new consumer products have been brand extensions: Tide Total Care, Gillette Venus Embrace, Bounce Extra Soft, Always Infinity, and Secret Flawless deodorant. At Sony, modifications of established products account for over 80 percent of new-product activity. It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up and also broaden the brand meaning.
- New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Some of the most successful recent new consumer products have been brand extensions: Tide Total Care, Gillette Venus Embrace, Bounce Extra Soft, Always Infinity, and Secret Flawless deodorant. At Sony, modifications of established products account for over 80 percent of new-product activity. It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up and also broaden the brand meaning.
- New products range from new-to-the-world products that create an entirely new market to minor improvements or revisions of existing products. Most new-product activity is devoted to improving existing products. Some of the most successful recent new consumer products have been brand extensions: Tide Total Care, Gillette Venus Embrace, Bounce Extra Soft, Always Infinity, and Secret Flawless deodorant. At Sony, modifications of established products account for over 80 percent of new-product activity. It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up and also broaden the brand meaning.
- The stages in the new-product development process are shown in Figure 20.1. Many firms have parallel sets of projects working through the process, each at a different stage. Think of the process as a funnel: A large number of initial new-product ideas and concepts are winnowed down to a few high-potential products that are ultimately launched. But the process is not always linear. Many firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.
- The stages in the new-product development process are shown in Figure 20.1. Many firms have parallel sets of projects working through the process, each at a different stage. Think of the process as a funnel: A large number of initial new-product ideas and concepts are winnowed down to a few high-potential products that are ultimately launched. But the process is not always linear. Many firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.
- The stages in the new-product development process are shown in Figure 20.1. Many firms have parallel sets of projects working through the process, each at a different stage. Think of the process as a funnel: A large number of initial new-product ideas and concepts are winnowed down to a few high-potential products that are ultimately launched. But the process is not always linear. Many firms use a spiral development process that recognizes the value of returning to an earlier stage to make improvements before moving forward.
- The new-product development process starts with the search for ideas. Some marketing experts believe the greatest opportunities and highest leverage with new products are found by uncovering the best possible set of unmet customer needs or technological innovation. New-product ideas can come from interacting with various groups and using creativity-generating techniques. The Marketing Memo explains ten ways (listed on this slide and the next) to find great new-product ideas.
- The new-product development process starts with the search for ideas. Some marketing experts believe the greatest opportunities and highest leverage with new products are found by uncovering the best possible set of unmet customer needs or technological innovation. New-product ideas can come from interacting with various groups and using creativity-generating techniques. The Marketing Memo explains ten ways (listed on this slide and the next) to find great new-product ideas.
- Customers can be a great place to get new ideas.
- Concept testing means presenting the product concept to target consumers, physically or symbolically, and getting their reactions. In the past, creating physical prototypes was costly and time consuming, but today firms can use rapid prototyping to design products on a computer and then produce rough models to show potential consumers for their reactions. After receiving this information, researchers measure product dimensions by having consumers respond to questions like these: 1. Communicability and believability—“Are the benefits clear to you and believable?” If the scores are low, the concept must be refined or revised. 2. Need level—“Do you see this product solving a problem or filling a need for you?” The stronger the need, the higher the expected consumer interest. 3. Gap level—“Do other products currently meet this need and satisfy you?” The greater the gap, the higher the expected consumer interest. Marketers can multiply the need level by the gap Purchase intention—“Would you (definitely, probably, probably not, definitely not) buy the product?” Consumers who answered the first three questions positively should answer “Definitely” here. 4. Perceived value—“Is the price reasonable in relationship to value?” The higher the perceived value, the higher is expected consumer interest.
- Concept testing means presenting the product concept to target consumers, physically or symbolically, and getting their reactions. In the past, creating physical prototypes was costly and time consuming, but today firms can use rapid prototyping to design products on a computer and then produce rough models to show potential consumers for their reactions. After receiving this information, researchers measure product dimensions by having consumers respond to questions like these: 1. Communicability and believability—“Are the benefits clear to you and believable?” If the scores are low, the concept must be refined or revised. 2. Need level—“Do you see this product solving a problem or filling a need for you?” The stronger the need, the higher the expected consumer interest. 3. Gap level—“Do other products currently meet this need and satisfy you?” The greater the gap, the higher the expected consumer interest. Marketers can multiply the need level by the gap Purchase intention—“Would you (definitely, probably, probably not, definitely not) buy the product?” Consumers who answered the first three questions positively should answer “Definitely” here. 4. Perceived value—“Is the price reasonable in relationship to value?” The higher the perceived value, the higher is expected consumer interest.
- The ultimate way to test a new consumer product is to put it into full-blown test markets. The company chooses a few representative cities and puts on a full marketing communications campaign, and the sales force tries to sell the trade on carrying the product and giving it good shelf exposure. Test marketing also measures the impact of alternative marketing plans by implementing them in different cities. A full-scale test can cost over $1 million, depending on the number of test cities, the test duration, and the amount of data the company wants to collect. Management faces several decisions listed in the slide.
- The adoption decision is that made when a consumer decides to become a user of a product.
- An innovation is any good, service, or idea that someone perceives as new, no matter how long its history. The innovation diffusion process is “the spread of a new idea from its source of invention or creation to its ultimate users or adopters.” In other words, it is the process over which consumers adopt innovations. The steps include awareness, interest, evaluation, trial, and adoption.
- We have covered several questions with this chapter.
- We have covered several questions with this chapter.