New Product Development and Product Life-Cycle Strategies Chapter 11 PowerPoint slides Express version Instructor name Course name School name Date Principles of Marketing, Sixth Canadian Edition

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 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 Principles of Marketing, Sixth Canadian Edition

Major Stages in New Product Development Idea generation: systematic search for new ideas Internal sources: brainstorming External sources: customers, competitors, distributors and suppliers Figure 11.1 Idea screening: identify good ideas and drop poor ones Usefulness to consumers Good for company Fit with objectives and strategies Have the resources Add value Principles of Marketing, Sixth Canadian Edition

Major Stages in New Product Development Concept development: detailed version of the product concept in meaningful consumer terms Concept testing: testing new-product concepts for consumer appeal Figure 11.1 Marketing strategy: initial strategy for product concept: Target market, positioning, and sales, market share, and profit goals Price, distribution, and marketing budget Strategy statement, long-run sales, profit goals, and marketing mix Principles of Marketing, Sixth Canadian Edition

Major Stages in New Product Development Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives. Figure 11.1 Product development: developing the product concept into a physical product Large investment Building a prototype Testing for safety, durability, and acceptability Principles of Marketing, Sixth Canadian Edition

Major Stages in New Product Development Test marketing: testing the product in more realistic market settings Determine the target market profile Figure 11.1 Assess consumer acceptability, trial, repeat purchase rate Evaluate trade reception and distribution penetration Design effective media plans Standard test markets Controlled test markets Simulated test market Principles of Marketing, Sixth Canadian Edition

Major Stages in New Product Development Commercialization: introducing a new product into the market Introduction timing Figure 11.1 Market rollout or full-scale introduction Sequential product development Simultaneous (team-based) product development Principles of Marketing, Sixth Canadian Edition

Product Life-Cycle Strategies Product life cycle (PLC): the course of a product’s sales and profits over its life Figure 11.2 Principles of Marketing, Sixth Canadian Edition

Styles, Fashions, and Fads Style: basic and distinctive mode of expression Fashion: currently accepted or popular style in a given field Fad: a fashion the enters quickly, adopted with great zeal, peaks early, and decline very fast Figure 11.3 Principles of Marketing, Sixth Canadian Edition

Summary of PLC (Table 11.2) Source: Philip Kotler and Peggy Cunningham, Marketing Management: Analysis, Planning, Implementation, and Control, Canadian 11th Edition, Pearson Education Canada, Toronto, Ontario, 2004, p. 347 Principles of Marketing, Sixth Canadian Edition

In Conclusion… The learning objectives for this chapter were: 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 Principles of Marketing, Sixth Canadian Edition