New Product development

Transcription

1 New Product development

2 New product could be: New-to-the-World Product: New product that creates essentially new market. New Product Lines: New product that allows a company to enter an established market for first time. Improvements/Revisions of Existing Product Lines: New product gives increased performance & Replaces existing products.

3 New product could be: Repositioning: Existing products targeted to new market/market segment. Cost Reduction: New product that provide similar performance at lower cost.

4 Two ways to obtain New Products Acquisition The buying of a whole company, a patent, or a license to produce someone else s product New product development Original products, product improvements, product modifications, and new brands developed from the firm s own research and development

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6 The World s Most Innovative Companies Apple Google Toyota General Electric Microsoft Procter & Gamble 3M Walt Disney IBM Sony Wal-Mart Honda Starbucks Target BMW Samsung

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8 Major Stages in New-Product Development

9 Ways to Find Great New Ideas Run informal sessions with customers Allow time off for technical people to putter on pet projects Survey your customers about competitor s product. Use iterative rounds with customers Set up a keyword search to scan trade publications for new product announcements.

10 Continue. Treat trade shows as intelligence missions Set up an idea vault

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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

13 Idea Generation: Creativity Techniques Attribute listing Forced relationships Reverse assumption analysis New contexts Mind mapping

14 Idea Screening Identify good ideas and drop poor ideas Company must avoid 2 types of Errors A Drop error: A company dismissing an otherwise good idea. A Go Error: A company permitting a poor idea to move into development & commercialization.

15 Does the proposed product have the Lego Look? Will children learn while having fun? Does the product maintain high quality standards? Does it stimulate creativity?

16 Product Idea rating device Product Success Requirements Unique or superior product High Performance-tocost ratio High Marketing dollar support Lack of strong competition Relative Weight (a) Product Score (b) Product Rating (C=a*b) Total Rating scale: poor, fair; good. Minimum acceptance rate:.61

17 Concept Development and Testing Product idea is an idea for a possible product that the company can see itself offering to the market. Product concept is a detailed version of the idea stated in meaningful consumer terms. Who will use this product? Primary benefits should this product provide? When will people consume it?

18 Product Concept Concept 1: An instant breakfast drink for adults who want a quick nutritious breakfast without preparation. Concept 2: A tasty snack drink for children as midday refreshment. Concept 3: A health supplement for older adults to drink in the late evening before they go to bed.

19 Continues. Category concept defines products competition. Brand concept

20 Concept testing Our product is powdered mixture that is added to milk to make and instant breakfast that gives the person all the needed nutrition along with good taste and high convenience. The product would be offered in three flavors (chocolate, vanilla & strawberry)and would come in individual packets, six to a box, at $2.49 a box.

21 Concept Testing Communicability and Believability: Are the benefits believable? Need level: Product meeting the need? Gap level: Do other product satisfy this need? Perceived value: Value for money? Purchase intention: Intention to buy User targets, purchase occasions, purchasing frequency

22 Conjoint Analysis A Method for deriving the utility values that consumers attach to varying levels of product s attributes. Product A Product B Product C

23 Utility Functions Based on Conjoint Analysis

24 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.

25 Business analysis It s a review of the sales, costs, and profit projections to find out whether they satisfy the company s objectives. Estimating Total Sales: Sum of estimated first time sale, replacement sales and repeat sales. Estimating Costs & Profits: Estimated by Finance, marketing and R&D department.

26 Product development Developing the product concept into physical product in order to ensure that the product idea can be turned into a workable market offering. Alpha testing Beta testing Market testing

27 Commercialization Introducing the new product into the market. When: First, Parallel or Late entry? Where: A region, a national market, several regions or international market? To whom: Target market How: Introductory Marketing Strategy