20 Introducing New Market Offerings Marketing Management 13

20 Introducing New Market Offerings Marketing Management, 13 th 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 20 -2

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 20 -3

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 20 -4

The World’s Most Innovative Companies • • Apple Google Toyota General Electric Microsoft Procter & Gamble 3 M Walt Disney • • IBM Sony Wal-Mart Honda Starbucks Target BMW Samsung Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -5

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 you’re not the best Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -6

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 20 -7

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 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 © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -9

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 20 -10

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 20 -11

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 20 -12

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 20 -13

Lateral Mapping • • • Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -14

Variations on Failure • Absolute product failure • Partial product failure • Relative product failure Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -15

Concepts in Concept Development • • • Product idea Product concept Category concept Brand concept Concept testing Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -16

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 20 -17

Marketing Strategy • Target market’s 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 20 -18

Product Development • Quality function deployment (QFD) • Customer attributes • Engineering attributes Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -19

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 20 -20

Consumer Goods Market Testing • • Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -21

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 20 -22

Timing of Market Entry • First entry • Parallel entry • Late entry Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -23

Criteria for Choosing Rollout Markets • • Market potential Company’s local reputation Cost of filling pipeline Cost of communication media Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -24

What is Adoption? Adoption is an individual’s decision to become a regular user of a product. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -25

Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -26

Characteristics of an Innovation • • • Relative advantage Compatibility Complexity Divisibility Communicability Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 -27