New Product Strategy Why do new products fail? Inability of the company to match up its offerings to the needs of the customers Common Misconceptions about NPD Process (Marketing Highlight 7-1, p. 106)

Categories of New Product 1. New-to-the-world product Product that are inventions; products that change consumption behavior 2. New category entries Products that take a firm into a category new to it. Products are not new to the world

Categories of New Product 3. Additions to product lines (product line extension) Products that are line extensions to firm’s current markets 4. Product improvements Improved performance; greater perceived value

Categories of New Product 5. Repositionings Products retargeted for a new use or application

Applications: Ensuring Success Factors associated with new product success (p. 107) 1. Product superiority/quality 2. Overall company/project fit 3. etc.

Applications: Ensuring Success Product superiority/quality – The competitive advantage the product has by virtue of features, benefits, quality, uniqueness, and so on Make the use easier: ask customers why they don’t use the product as much Packages that can be placed directly in a microwave

Applications: Ensuring Success Overall company/project fit – the product’s synergy with the company-marketing, managerial, business fit New category entries: find commonality in distribution, marketing, or brand name recognition. Family branding:

Challenge in Developing New Products Need to shorten products “time to market” Reduce time between idea generation and product availability Reduce market risk and internal risk A short “time to market” can create a competitive advantage

Challenge in Developing New Products Research – need for timely and accurate information: tracking competitors and customers; tracking marketing environment Is new product development consistent with organizational mission and objectives?

Challenge in Developing New Products Will customers benefit? Are there manufacturing, marketing, or distribution cost efficiencies with the new product?

Challenge in Developing New Products Does the firm have the needed competencies and resources in R&D, manufacturing, and marketing to successfully develop product? Adding wood stains to a line of paints: includes totally new manufacturing effort, raw materials technology, or marketing effort.