Marketing: An Introduction New Product Development and Product Life-Cycle Strategies Chapter Nine Lecture Slides –Express Version Course Professor Date

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-2 Looking Ahead 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

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-3 New Product Development Important to: –Follow changing market demands –Remain competitive –Keep up to changing technology –Replace dying products –Diversify product offering to reduce risk Successful new products: –Offer a unique superior product –Have a well-defined product concept Products fail: –Market size may have been overestimated –Poor quality or design –Incorrect positioning, pricing, or promotion

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-4 Stages in New Product Development Idea generation Idea screening Concept development & testing Commercialization Marketing strategy Business analysis Product development Test marketing Figure 9-1 Amount of investment + -

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-5 The New Product Development Process Sources of new ideas: –Internal sources; all departments –External sources: customers, suppliers, channel partners, competitors Product concept: –A detailed version of the product idea –Stated in meaningful consumer terms Concept development: –Expanding the product idea into various alternative forms –Testing for consumer interest is the next step

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-6 The New Product Development Process Marketing strategy statement: –Target market –Product positioning –Sales, market share, and profit objectives Business analysis: –Review of sales, costs, and profit projections –Will this product meet corporate objectives? Test marketing: –Testing the product in more realistic market settings –Can use field tests, simulated store environments, and virtual reality –Expensive, time consuming, and can show your hand to competitors

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-7 Product Life-Cycle Strategies Profits Sales DevelopmentIntroductionGrowthMaturityDecline Sales Profit ($) Loss ($) Figure 9-2

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-8 Special Life Cycles Styles: –Basic and distinctive mode of expression –Once accepted, popularity will vary over time Fashion: –A currently accepted or popular style –Gains acceptance, peaks, then declines –Tend to go in cycles with generations Fads: –Gain rapid acceptance, peak early, and decline quickly –Tend to attract limited market –Products that are novel and do not address basic needs

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 9-9 Summary of PLC/Marketing Mix Table 9-2

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc Looking Back New product development Stage in development process Stages in product life cycle Marketing strategies during product life cycle