Marketing An Introduction New Product Development and Product

Marketing: An Introduction New Product Development and Product Life-Cycle Strategies • Chapter Nine • Lecture Slides –Express Version • Course • Professor • Date ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Looking Ahead • After studying this chapter you should be able to: • Explain how companies find and develop new product ideas • List and define the steps in the new product development process • Describe the stages of the product life cycle • Describe how marketing strategies change during the product’s life cycle 2 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction New Product Development • Important to: – – – Follow changing market demands Remain competitive Keep up to changing technology Replace dying products Diversify product offering to reduce risk • Successful new products: – Offer a unique superior product – Have a well-defined product concept • Products fail: – Market size may have been overestimated – Poor quality or design – Incorrect positioning, pricing, or promotion 3 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction - Idea generation Idea screening Amount of investment Concept development & testing Marketing strategy Business analysis Product development + Test marketing Stages in New Product Development Commercialization 4 ©Copyright 2004, Pearson Education Canada Inc. Figure 9 -1

Marketing: An Introduction The New Product Development Process • Sources of new ideas: – Internal sources; all departments – External sources: customers, suppliers, channel partners, competitors • Product concept: – A detailed version of the product idea – Stated in meaningful consumer terms • Concept development: – Expanding the product idea into various alternative forms – Testing for consumer interest is the next step 5 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction The New Product Development Process • Marketing strategy statement: – Target market – Product positioning – Sales, market share, and profit objectives • Business analysis: – Review of sales, costs, and profit projections – Will this product meet corporate objectives? • Test marketing: – Testing the product in more realistic market settings – Can use field tests, simulated store environments, and virtual reality – Expensive, time consuming, and can show your hand to competitors 6 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Product Life-Cycle Strategies Sales Profit ($) Sales Profits Loss ($) Development 7 Introduction Growth Maturity ©Copyright 2004, Pearson Education Canada Inc. Decline Figure 9 -2

Marketing: An Introduction Special Life Cycles • Styles: – Basic and distinctive mode of expression – Once accepted, popularity will vary over time • Fashion: – A currently accepted or popular style – Gains acceptance, peaks, then declines – Tend to go in cycles with generations • Fads: – Gain rapid acceptance, peak early, and decline quickly – Tend to attract limited market – Products that are novel and do not address basic needs 8 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Summary of PLC/Marketing Mix 9 ©Copyright 2004, Pearson Education Canada Inc. Table 9 -2

Marketing: An Introduction Looking Back • New product development • Stage in development process • Stages in product life cycle • Marketing strategies during product life cycle 10 ©Copyright 2004, Pearson Education Canada Inc.