1 20 Introducing New Market Offerings Chapter Questions

1 20 Introducing New Market Offerings

Chapter Questions § § § What challenges does a company face in developing new products and services? What organizational structures and processes do managers use to oversee new-product development? What are the main stages in developing new products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -2

Chapter Questions § § What is the best way to manage the newproduct development process? What factors affect the rate of diffusion and consumer adoption of newly launched products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -3

Categories of New Products New to the World Additions Improvements Repositionings Cost reductions Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -4

The Innovation of Wii Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -5

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 © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -6

Table 201. Finding One Successful Product Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -7

What is a Venture Team? § A venture team is a cross-functional group charged with developing a specific product or business. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -8

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 © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -9

Figure 20. 1 New-Product Development Decision Process Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -10

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 © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -11

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 © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -12

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 © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -13

Demand-First Innovation and Growth (DIG) Framework Demand Landscape Opportunity Space Strategic Blueprint Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -14

Idea Generation: Creativity Techniques § § § Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -15

Lateral Mapping § § § Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -16

Table 20. 2 Product Idea Rating Device Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -17

Figure 20. 2 Forces Fighting New Ideas Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -18

Figure 20. 3 Product and Brand Positioning Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -19

Concept Testing § § § Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -20

Figure 20. 4 Conjoint Analysis Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -21

Figure 20. 5 Utility Functions Based on Conjoint Analysis Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -22

Figure 20. 6 Product Life-Cycle Sales for Three Types of Products Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -23

Table 20. 3 Projected Five-Year Cash Flow Statement Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -24

Prototype Testing § § § Alpha testing Beta testing § Rank-order method § Paired-comparison method § Monadic-rating method Market testing Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -25

Consumer Goods Market Testing § § Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -26

Test Market Decisions § § § How many test cities? Which cities? Length of test? What information to collect? What action to take? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -27

Timing of Market Entry § § § First entry Parallel entry Late entry Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -28

What is Adoption? Adoption is an individual’s decision to become a regular user of a product. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -29

Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -30

Figure 20. 7 Adopter Categorization on the Basis of Relative time of Adoption Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -31

Characteristics of an Innovation § § § Relative advantage Compatibility Complexity Divisibility Communicability Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -32

For Review § § § What challenges does a company face in developing new products and services? What organizational structures and processes do managers use to oversee new-product development? What are the main stages in developing new products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -33

For Review § § What is the best way to manage the newproduct development process? What factors affect the rate of diffusion and consumer adoption of newly launched products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20 -34