20

Introducing
New Market Offerings

Marketing Management, 13th ed

Chapter Questions
What challenges does a company face
in developing new products and
services?
What organizational structures and
processes do managers use to manage
new-product development?
What are the main stages in developing
new products and services?
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Questions (cont.)

What is the best way to manage the
new-product development process?
What factors affect the rate of diffusion
and consumer adoption of newly
launched products and services?

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Categories of New Products

New-to-the-world
New product lines
Additions
Improvements
Repositionings
Cost reductions
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

The Worlds
Most Innovative Companies

Apple
Google
Toyota
General Electric
Microsoft
Procter & Gamble
3M
Walt Disney

IBM
Sony
Wal-Mart
Honda
Starbucks
Target
BMW
Samsung

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Seven Notions of Innovation

See the future through the eyes of your
customer
Intellectual property and brand power are key
assets
Use digital technology to create tools for
customers
Build a championship team
Innovation is a state of mind
Speed is critical, so push your organization
Partner up if youre not the best
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Factors That Limit

New Product Development

Shortage of ideas
Fragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

What is a Venture Team?

A venture team is a cross-functional
group charged with developing a
specific product or business;
intrapreneurs are relieved of other
duties and provided a
budget and time frame.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

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

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ways to Find Great New Ideas

Run informal sessions with customers
Allow time off for technical people to
putter on pet projects
Make customer brainstorming a part of
plant tours
Survey your customers
Undertake fly on the wall research to
customers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

More Ways to Find Great Ideas

Use iterative rounds with customers
Set up a keyword search to scan trade
publications
Treat trade shows as intelligence
missions
Have employees visit supplier labs
Set up an idea vault
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Drawing Ideas from Customers

Observe customers using product
Ask customers about problems with
products
Ask customers about their dream
products
Use a customer advisory board or a
brand community of enthusiasts to
discuss product
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Idea Generation: Creativity

Techniques

Attribute listing
Forced relationships
Morphological analysis
Reverse assumption analysis
New contexts
Mind mapping

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Lateral Mapping

Gas stations + food

Cafeteria + Internet
Cereal + snacking
Candy + toy
Audio + portable

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Variations on Failure
Absolute product failure
Partial product failure
Relative product failure

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Concepts in Concept Development

Product idea
Product concept
Category concept
Brand concept
Concept testing

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Concept Testing

Communicability and believability

Need level
Gap level
Perceived value
Purchase intention
User targets, purchase occasions,
purchasing frequency

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Marketing Strategy
Target markets size, structure, and
behavior
Planned price, distribution, and
promotion for Year One
Long-run sales and profit goals and
marketing-mix strategy over time

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Product Development
Quality function deployment (QFD)
Customer attributes
Engineering attributes

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Prototype Testing
Alpha testing
Beta testing
Rank-order method
Paired-comparison method
Monadic-rating method

Market testing

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Consumer Goods Market Testing

Sales-Wave Research
Simulated Test Marketing
Controlled Test Marketing
Test Markets

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Test Market Decisions

How many test cities?

Which cities?
Length of test?
What information to collect?
What action to take?

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Timing of Market Entry

First entry
Parallel entry
Late entry

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Criteria for
Choosing Rollout Markets

Market potential
Companys local reputation
Cost of filling pipeline
Cost of communication media

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

What is Adoption?
Adoption is an individuals decision to
become a regular user of a product.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Stages in the Adoption Process

Awareness
Interest
Evaluation
Trial
Adoption
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Characteristics of an Innovation

Relative advantage
Compatibility
Complexity
Divisibility
Communicability

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall