Chapter Eight New-Product Development and Product Life-Cycle Strategies.

Slides:



Advertisements
Similar presentations
New-Product Development and Product Life-Cycle Strategies
Advertisements

Copyright © 2007 Pearson Education Canada9-1 Chapter Nine New Product Development and Product Life Cycle Strategies with Duane Weaver.
New-Product Development and Product Life-Cycle Strategies 9 Principles of Marketing.
Learning Goals Learn how companies find and develop new-product ideas
Copyright © 2007 Pearson Education Canada9-1 Chapter Nine New Product Development and Product Life Cycle Strategies with Duane Weaver.
New-Product Development and Product Life-Cycle Strategies
New Product Development and Product Life-Cycle Strategies
Principles of Marketing
C HAPTER 8 New-Product Development and Product Life-Cycle Strategies.
© 2002 Pearson Education Canada Inc. 9-1 principles of MARKETING Chapter 9 New Product Development and Life Cycle Strategies.
New-Product Development and Product Life-Cycle Strategies
New-Product Development and Product Life-Cycle Strategies
9- 1 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall i t ’s good and good for you Chapter Nine New-Product Development and Product.
New-Product Development & Product Life-Cycle Strategies.
 Copyright 1999 Prentice Hall 9-1 Chapter 9 New Product Development and Product Life-Cycle Strategies PRINCIPLES OF MARKETING Eighth Edition Philip Kotler.
Objectives Understand how companies find and develop new-product ideas. Learn the steps in the new-product development process. Know the stages of the.
Developing New Products and Managing the Product Life-Cycle
New Product Development and Product Life-Cycle Strategies
New Product Development & Product Life Cycles
New-Product Development and Product Life-Cycle Strategies
Developing New Products And Managing the Product Life-Cycle
Chapter Nine New-Product Development and Product Life-Cycle Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved.
New-Product Development and Product Life-Cycle Strategies 8.
Major Stages in New-Product Development
Paul Dishman, Ph.D. Department of Business Management
New-Product Development and Product Life-Cycle Strategies
New-Product Development and Product Life-Cycle Strategies
Copyright © 2005 Pearson Education Inc. New Product Development and Product Life-Cycle Strategies Principles of Marketing.
Chapter 1 New-Product Development and Product Life-Cycle Strategies
Copyright © 2008 Pearson Education CanadaPrinciples of Marketing, Seventh Canadian Edition Chapter 10 New-Product Development and Life-Cycle Strategies.
New-Product Development and Product Life-Cycle Strategies
The Product Lifecycle and New Product Development
Copyright © 2007 Pearson Education Canada9-1 Marketing: An Introduction Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and Buchwitz Chapter.
Principles of Marketing Chapter 8: Developing New Products And Managing The Product Life-Cycle.
Chapter Eight New-Product Development and Product Life-Cycle Strategies.
The Product Life Cycle Presented by : Muhammad Arqum (bsit 06-24) Presented to : Madam Ammara.
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Nine New-Product Development and Product Life-Cycle Strategies.
Developing New Products Developing New Products and Managing the Product Life-Cycle Chapter 8.
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Class Six Chapter Nine New-Product Development and Product Life-Cycle.
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Nine New-Product Development and Product Life-Cycle Strategies.
Product Life-Cycle Strategies & Diffusion of Innovation Session-31.
Product Life-Cycle The Product Life Cycle (PLC) has Five Stages
Copyright © 2007 Pearson Education Canada 9-1 Chapter Nine New Product Development and Product Life Cycle Strategies with Duane Weaver.
Developing New Products Developing New Products and Managing the Product Life-Cycle Chapter 8.
New-Product Development and Product Life-Cycle Strategies
Low sales High cost per customer Negative or low Create product awareness & trial Offer a basic product Usually is high; use cost-plus formula High distribution.
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Seven New-Product Development and Product Life-Cycle Strategies.
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Nine New-Product Development and Product Life-Cycle Strategies.
9- 1 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall i t ’s good and good for you Chapter Nine New-Product Development and Product.
Chapter 9- slide 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Observing a marketplace and make a report on it - New market, Gawsia,
C HAPTER 8 New-Product Development and Product Life-Cycle Strategies.
Chapter Nine New-Product Development and Product Life-Cycle Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved.
MGT301 Principles of Marketing Lecture-22. Summary of Lecture-21.
1 New-Product Development and Life-Cycle Strategies Chapter 9.
Learning Goals Know the stages of the product life cycle
Developing New Products
New-Product Development and Life-Cycle Strategies
Learning Objectives After studying this chapter, you should be able to: Explain how companies find and develop new-product ideas List and define the steps.
Copyright © 2009 Pearson Education South Asia Pte Ltd
Principles of Marketing
Product Life Cycle Products have a limited life.
PRODUCT LIFE CYCLE.
New-Product Development and Life-Cycle Strategies
Life-Cycle Strategies
Principles of Marketing
Chapter 9- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Nine New-Product Development and Product Life-Cycle Strategies.
Life-Cycle Strategies
New product development & product life-cycle strategies
Life-Cycle Strategies
Principles of Marketing
Presentation transcript:

Chapter Eight New-Product Development and Product Life-Cycle Strategies

Roadmap: Previewing the Concepts Copyright 2007, Prentice Hall, Inc Explain how companies find and develop new-product ideas. 2.List and define the steps in the new- product development process. 3.Describe the stages of the product life cycle. 4.Describe how marketing strategies change during the product’s life cycle.

Copyright 2007, Prentice Hall, Inc.8-3 Firm History  Steve Jobs’s creativity led to innovation in user friendliness of computers.  LazerWriters and the Macintosh established Apple firmly in desktop publishing market.  Status as market share leader and innovator was lost in the late 1980s after Jobs left the company. Apple Computer – Innovation at Work Case Study Firm Recovery  Steve Jobs returns in 1997 and revitalizes Apple by first launching the iMac.  The Mac OS X next breaks ground and acts as a launching pad for a new generation of computers and software products.  iPod and iTunes change the face of music and are the hit of the decade.

Copyright 2007, Prentice Hall, Inc.8-4 New-Product Development Strategy  Strategies for obtaining new-product ideas: –Acquisition of companies, patents, licenses –New product development, product improvements and modifications

Copyright 2007, Prentice Hall, Inc.8-5 New-Product Failures  Only 10% of new consumer products are still on the market and profitable after 3 years.  Industrial products failure rate as high as 30%.  Why do products fail? –Overestimation of market size –Design problems –Incorrectly positioned, priced, or advertised –Pushed despite poor marketing research findings –Development costs –Competition

Copyright 2007, Prentice Hall, Inc.8-6 Major Stages in New-Product Development  Idea generation  Idea screening  Concept development and testing  Marketing strategy development  Business analysis  Product development  Test marketing  Commercialization

Copyright 2007, Prentice Hall, Inc.8-7 Idea Generation  Internal sources: –Company employees at all levels  External sources: –Customers –Competitors –Distributors –Suppliers –Outsourcing

Copyright 2007, Prentice Hall, Inc.8-8 Idea Screening  Process used to spot good ideas and drop poor ones. –Executives provide a description of the product along with estimates of market size, product price, development time and costs, manufacturing costs, and rate of return. –Evaluated against a set of company criteria for new products.

Copyright 2007, Prentice Hall, Inc.8-9 Concept Development and Testing  Product Idea: –idea for a possible product that the company can see itself offering.  Product Concept: –detailed version of the idea stated in meaningful consumer terms.  Product Image: –the way consumers perceive an actual or potential product.

Copyright 2007, Prentice Hall, Inc.8-10 Marketing Strategy Development  Part One: –Describes the target market, planned product positions, sales, market share, and profit goals.  Part Two: –Outlines the product’s planned price, distribution, and marketing budget.  Part Three: –Describes the long-run sales and profit goals, marketing mix strategy.

Copyright 2007, Prentice Hall, Inc.8-11 Business Analysis  Involves a review of the sales, costs, and profit projections to assess fit with company objectives.  If results are positive, project moves to the product development phase.

Copyright 2007, Prentice Hall, Inc.8-12 Product Development  Develop concept into physical product.  Calls for large jump in investment.  Prototypes are made.  Prototype must have correct physical features and convey psychological characteristics.

Copyright 2007, Prentice Hall, Inc.8-13 Test Marketing  Product and program introduced in more realistic market setting.  Not needed for all products.  Can be expensive and time consuming, but better than making major marketing mistake.

Copyright 2007, Prentice Hall, Inc.8-14 Commercialization  Must decide on timing (i.e., when to introduce the product).  Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).  Must develop a market rollout plan.

Copyright 2007, Prentice Hall, Inc.8-15 Organizing New-Product Development  Sequential Approach: –Each stage completed before moving to next phase of the project.  Simultaneous Approach: –Cross-functional teams work through overlapping steps to save time and increase effectiveness.

Copyright 2007, Prentice Hall, Inc.8-16 The Product Life Cycle  Product development  Introduction  Growth  Maturity  Decline

Copyright 2007, Prentice Hall, Inc.8-17 Product Life-Cycle Applications  Product class has the longest life cycle (e.g., gas- powered cars)  Product form tends to have the standard PLC shape (e.g., dial telephone)  Brand can change quickly because of changing competitive attacks and responses (e.g., Tide, Cheer)  Style is a basic and distinctive mode of expression (e.g., formal clothing, Danish modern furniture)  Fashion is a popular style in a given field (e.g., business casual)  Fad is a fashion that enters quickly, is adopted quickly, and declines fast (e.g., pet rocks)

Copyright 2007, Prentice Hall, Inc.8-18 Practical Problems of PLC  Hard to identify which stage of the PLC the product is in.  Hard to pinpoint when the product moves to the next stage.  Hard to identify factors that affect product’s movement through stages.  Hard to forecast sales level, length of each stage, and shape of PLC.  Strategy is both a cause and result of the PLC.

Copyright 2007, Prentice Hall, Inc.8-19 Introduction Stage of PLC  Sales: low  Costs: high cost per customer  Profits: negative  Marketing Objective: create product awareness and trial  Product: offer a basic product  Price: use cost-plus formula  Distribution: build selective distribution  Promotion: heavy to entice product trial

Copyright 2007, Prentice Hall, Inc.8-20 Growth Stage of PLC  Sales: rapidly rising  Costs: average cost per customer  Profits: rising  Marketing Objective: maximize market share  Product: offer extension, service, warranty  Price: penetration strategy  Distribution: build intensive distribution  Promotion: reduce to take advantage of demand

Copyright 2007, Prentice Hall, Inc.8-21 Maturity Stage of PLC  Sales: peak  Costs: low cost per customer  Profits: high  Marketing Objective: maximize profits while defending market share  Product: diversify brand and models  Price: match or best competitors  Distribution: build more intensive distribution  Promotion: increase to encourage brand switching

Copyright 2007, Prentice Hall, Inc.8-22 Maturity Stage of the PLC  Modifying the Market: –Increase the consumption of the current product.  How? –Look for new users and market segments. –Reposition the brand to appeal to larger or faster-growing segment. –Look for ways to increase usage among present customers.

Copyright 2007, Prentice Hall, Inc.8-23 Maturity Stage of the PLC  Modifying the Product: –Changing characteristics such as quality, features, or style to attract new users and to inspire more usage.  How? –Improve durability, reliability, speed, taste. –Improve styling and attractiveness. –Add new features. –Expand usefulness, safety, convenience.

Copyright 2007, Prentice Hall, Inc.8-24 Maturity Stage of the PLC  Modifying the Marketing Mix: –Improving sales by changing one or more marketing mix elements.  How? –Cut prices. –Launch a better ad campaign. –Move into larger market channels.

Copyright 2007, Prentice Hall, Inc.8-25 Decline Stage of PLC  Sales: declining  Costs: low cost per customer  Profits: declining  Marketing Objective: reduce expenditures and milk the brand  Product: phase out weak items  Price: cut price  Distribution: selective--phase out unprofitable outlets  Promotion: reduce to minimal level

Rest Stop: Reviewing the Concepts Copyright 2007, Prentice Hall, Inc Explain how companies find and develop new-product ideas. 2.List and define the steps in the new- product development process. 3.Describe the stages of the product life cycle. 4.Describe how marketing strategies change during the product’s life cycle.