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  1. 1. Marketing Management, 12/e A South Asian Perspective 20 Introducing New Market Offerings
  2. 2. Chapter Questions <ul><li>What challenges does a company face in developing new products? </li></ul><ul><li>What organizational structures are used to manage new-product development? </li></ul><ul><li>What are the main stages in developing new products? </li></ul><ul><li>What is the best way to set up the new-product development process? </li></ul><ul><li>What factors affect the rate of diffusion and consumer adoption of newly launched products? </li></ul>
  3. 3. Categories of New Products <ul><li>New-to-the-world </li></ul><ul><li>New product lines </li></ul><ul><li>Additions to product lines </li></ul><ul><li>Improvements to products </li></ul><ul><li>Repositionings </li></ul><ul><li>Cost reductions </li></ul>
  4. 4. Factors That Limit New Product Development <ul><li>Shortage of ideas </li></ul><ul><li>Fragmented markets </li></ul><ul><li>Social and governmental constraints </li></ul><ul><li>Cost of development </li></ul><ul><li>Capital shortages </li></ul><ul><li>Faster required development time </li></ul><ul><li>Shorter product life cycles </li></ul>
  5. 5. Venture Team Cross-functional group charged with developing a specific product or business; Intrapreneurs are relieved of other duties and provided a budget and time frame.
  6. 6. Criteria for Staffing Venture Teams <ul><li>Desired team leadership style </li></ul><ul><li>Desired level of leader expertise </li></ul><ul><li>Team member skills and expertise </li></ul><ul><li>Level of interest in concept </li></ul><ul><li>Potential for personal reward </li></ul><ul><li>Diversity of team members </li></ul>
  7. 7. Idea Generation: Creativity Techniques <ul><li>Attribute listing </li></ul><ul><li>Forced relationships </li></ul><ul><li>Morphological analysis </li></ul><ul><li>Reverse assumption analysis </li></ul><ul><li>New contexts </li></ul><ul><li>Mind mapping </li></ul>
  8. 8. Variations on Failure <ul><li>Absolute product failure </li></ul><ul><li>Partial product failure </li></ul><ul><li>Relative product failure </li></ul>
  9. 9. Concepts in Concept Development <ul><li>Product idea </li></ul><ul><li>Product concept </li></ul><ul><li>Category concept </li></ul><ul><li>Brand concept </li></ul><ul><li>Concept testing </li></ul>
  10. 10. Concept Testing <ul><li>Communicability and believability </li></ul><ul><li>Need level </li></ul><ul><li>Gap level </li></ul><ul><li>Perceived value </li></ul><ul><li>Purchase intention </li></ul><ul><li>User targets, purchase occasions, purchasing frequency </li></ul>
  11. 11. Marketing Strategy <ul><li>Target market’s size, structure, and behavior </li></ul><ul><li>Planned price, distribution, and promotion for Year 1 </li></ul><ul><li>Long-run sales and profit goals and marketing-mix strategy over time </li></ul>
  12. 12. Product Development <ul><li>Quality function deployment (QFD) </li></ul><ul><ul><li>Customer attributes </li></ul></ul><ul><ul><li>Engineering attributes </li></ul></ul>
  13. 13. Prototype Testing <ul><li>Alpha testing </li></ul><ul><li>Beta testing </li></ul><ul><ul><li>Rank-order method </li></ul></ul><ul><ul><li>Paired-comparison method </li></ul></ul><ul><ul><li>Monadic-rating method </li></ul></ul><ul><li>Market testing </li></ul>
  14. 14. Consumer Goods Market Testing <ul><li>Sales-Wave Research </li></ul><ul><li>Simulated Test Marketing </li></ul><ul><li>Controlled Test Marketing </li></ul><ul><li>Test Markets </li></ul>
  15. 15. Test Market Decisions <ul><li>How many test cities? </li></ul><ul><li>Which cities? </li></ul><ul><li>Length of test? </li></ul><ul><li>What information? </li></ul><ul><li>What action to take? </li></ul>
  16. 16. Timing of Market Entry <ul><li>First entry </li></ul><ul><li>Parallel entry </li></ul><ul><li>Late entry </li></ul>
  17. 17. Criteria for Choosing Rollout Markets <ul><li>Market potential </li></ul><ul><li>Company’s local reputation </li></ul><ul><li>Cost of filling pipeline </li></ul><ul><li>Cost of communication media </li></ul>
  18. 18. Consumer-Adoption Process Adoption is an individual’s decision to become a regular user of a product.
  19. 19. Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption
  20. 20. Adopter Categorization <ul><li>Innovators </li></ul><ul><li>Early adopters </li></ul><ul><li>Early majority </li></ul><ul><li>Late majority </li></ul><ul><li>Laggards </li></ul>
  21. 21. Characteristics of an Innovation <ul><li>Relative advantage </li></ul><ul><li>Compatibility </li></ul><ul><li>Complexity </li></ul><ul><li>Divisibility </li></ul><ul><li>Communicability </li></ul>