Marketing Management 16 May 2011

Managing New Product Development Successful new product development requires a customer-centred, team based and systematic effort

Customer-Centred New Product Development New product development must be customer-centred It begins with a thorough understanding of what customers need and value Customer-Centred New Product Development: New Product Development which focuses on finding new ways to solve customer challenges and create more satisfying customer experiences It begins and ends with solving customer problems Successful new products are differentiated, solve customer problems, offer customer value, engage customers in their processes

Team-Based New Product Development Good new product development requires total company, cross-functional and multi-levelled efforts The sequential product development approach is orderly and brings control to projects The sequential approach is also extremely slow and can lead to product failures, lost sales, profits and crumbling market positions Team-Based New Product Development: A new product development approach in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness

Team-Based New Product Development Team-based new product development teams usually include the marketing, finance, design, manufacturing, legal functions and at times suppliers Whereas the sequential approach may have bottlenecks, the team-based resolves them efficiently and its quick Advantages of the team-based approach include being fast and flexible Disadvantages of the team-based approach include organisational tensions To gain a competitive advantage rather combine a customer-centred approach with a team-based new product development team

Systematic New-Product Development The new product development process must be holistic and systematic, not compartmentalized and haphazard An innovation management system is used to collect, review, evaluate and manage new product ideas Innovation Management System yields 2 outcomes: Creates and innovation-orientated company culture Creates a large number of new product ideas Successful new product development requires holistic company commitment and releasing wants satisfying products

Product Life-Cycle Strategies Product Life Cycle: The course of a product’s sales and profits over its lifetime. It involves 5 distinct stages, namely; product development, introduction, growth, maturity and decline. Product Development: company finds and develops a new product idea Introduction: the product is introduced to the market Growth: period of rapid market acceptance and increasing profits Maturity: product has achieved acceptance by buyers and commences a slowdown in sales growth Decline: the period when sales fall and profits drop

Product’s Life from Inception to Decline

Product Life-Cycle Strategies Not all products have the same product life cycle Products can be revived and recycled back to growth through promos and repositioning The Product Life-Cycle concept can describe a Product Class, Product Form or a Brand Product classes have the longest longevity, product form have standard product life cycle shapes Brand life cycles alter rapidly due to competition and responses The Product Life Cycle can also be applied to Styles, Fashions, and Fads

Product Life-Cycle Strategies Style: A basic and distinctive mode of expression Fashion: A currently accepted or popular style in a particular field Fad: A temporary period of extremely high sales driven by customer enthusiasm and product or brand popularity Product Life Cycles can be used to develop marketing strategies at different stages of a product’s life cycle A product’s strategies can affect the product’s performance during later life cycle stages

Product Life-Cycle Strategies Challenges with using Product Life Cycles –Difficult to forecast sales during each cycle –Can’t determine length and shape of the life cycle curve –Strategy is a cause and result of a product’s life cycle Marketers should never push products through the life cycle stages Companies need to consistently innovate and develop new products that bring value to customers A company needs to monitor and manage the life cycle of existing products to remain successful

Product Decisions Responsibility and International Marketing Marketers need to carefully consider public policy regulations regarding the acquiring and the disposal of products Patent protection, product quality, safety and product warranties are all important considerations to be mindful of International product and services marketing faces challenges of which products and services to introduce and in which markets The adaption or standardisation of products across countries is also a major consideration Standardisation assists in lowering production and design costs and develops a consistent image

International Marketing

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