Launching a New Product Dr. Carol Gwin Baylor University July 14, 2005

Slide Handspring Treo Brand Video What is involved developing a new product?

Slide What Separates New-Product Winners From Losers?

Slide Stages in the New-Product Process

SETTING STRATEGIC DIRECTIONS Where are we now? –Internal (your company) Core Competencies Other strengths Weaknesses –External (outside of the company) Trends changing customer needs and wants (sociocultural, demographics, technology) Industry and competitive strengths and weaknesses Technological developments The economy Political, legal and regulatory restrictions and changes Where are the greatest opportunities?

1. Create a Sustainable Competitive Advantage Different from competition in a way that is meaningful to the customer. –Product/service, image, price Difficult to copy (sustainable). Profitable.

Potential Sources for Product/Service Differentiation  Patents  Brand equity  Exclusive supplier agreements  Exclusive distribution agreements  Product reliability & quality  Unique processes

 Obtain lower prices from suppliers.  Create efficient operations.  Control overhead costs.  Move down the experience curve.  Achieve economies of scale.  Obtain lower prices from suppliers.  Create efficient operations.  Control overhead costs.  Move down the experience curve.  Achieve economies of scale. Potential Sources for Cost Competitive Advantage

Identifying the Target Market Who is most likely to buy your product? Why is it important to precisely define the target market? – –Efficiencies Marketing - Focused on specific target. Operations – Focused on specific features/attributes. – –Price premium Greater value to customer since deliver to specific target market’s needs.

Customer Value CostsBenefits

Consumer Segmentation Variables FIGURE 7.3

Slide 2-43 Elements of the Marketing Mix

Slide Information is Key to Developing a Successful New Product

Slide Growth of the Internet and E-Commerce

Slide Online Consumer Sales by Category: 2001 and 2005

Slide Why Consumers Shop and Buy Online

Why Do Some Consumers Not Shop Online?

Slide Creating the Customer Experience Online Country Selector Amazon.com: Online shopping for electronics, apparel, music, books, DVDs & more

Online Marketing Tools Search engines Online ads Viral marketing Affiliation programs Community/relationships Interactive sites –Personalization, customization, games Personalized

What is the biggest barrier to creating a successful online business? Profitability –Attracting consumers to your web site. –Getting consumers to buy (or advertisers). –The infrastructure for product availability, packing and shipping. –Keeping competitors from copying real- time. –Price sensitivity.