1. Developing & Managing Products Chapter 11

2. New Product Development New Product StrategyIdea GenerationIdea ScreeningBusiness AnalysisDevelopmentTest MarketingCommercialization

3. New-product Strategy Link product development to MKT strategy Link product development to MKT strategy 3M 3M Identify markets and strategic roles Identify markets and strategic roles Environmental scanning Environmental scanning SWOT analysis SWOT analysis Source: http://www.logotecs.com

4. Idea Generation Customers Customers Employees Employees Distributors Distributors Vendors Vendors Competitors Competitors Research & Development Research & Development Consultants Consultants Source: http://www.clker.com/clipart-9721.html

5. Idea Screening First filter First filter Committee Reviews Committee Reviews Concept test Concept test

6. Business Analysis Last checkpoint before capital is committed Last checkpoint before capital is committed Look at product and marketing strategy needed to commercialize it Look at product and marketing strategy needed to commercialize it Preliminary figures Preliminary figures

7. Development “Paper into prototype” “Paper into prototype” Testing against standards Testing against standards Work on marketing mix Work on marketing mix Team-based analysis Team-based analysis Internet Internet Customer panels Customer panels

8. Market Testing Company chooses a specific market, based on criteria Company chooses a specific market, based on criteria Advantages Advantages Disadvantages Disadvantages Internet Internet

9. Commercialization Positioning and launching a product Positioning and launching a product Most expensive step Most expensive step Slotting fee Slotting fee Failure fee Failure fee

10. Diffusion of Innovation Innovators (2.5%) Innovators (2.5%) Early adopters (13.5%) Early adopters (13.5%) Early majority (34%) Early majority (34%) Late majority (34%) Late majority (34%) Laggards (16%) Laggards (16%) Source: http://tutor2u.net

11. Diffusion of Innovation Factors for Adoption Factors for Adoption Complexity Complexity Compatibility Compatibility Relative advantage Relative advantage Observability Observability Trialability Trialability Implications Implications

12. The Product Life Cycle Introduction Stage Introduction Stage Growth Stage Growth Stage Maturity Stage Maturity Stage Decline Stage Decline Stage

13. Introduction Stage Create awareness and encourage customers to try the product Create awareness and encourage customers to try the product Advertising Advertising Primitive demand Primitive demand Distribution issues Distribution issues Pricing issues Pricing issues

14. Growth Stage Rapid increases in sales Rapid increases in sales Competition Competition Advertising Advertising Selective demand Selective demand Who is buying? Who is buying? Distribution Distribution

15. Maturity Stage Slowing sales and decreasing profits Slowing sales and decreasing profits Marketing strategy Marketing strategy Hold market share Hold market share

16. Decline Stage Sales and profits drop Sales and profits drop Marketing strategy Marketing strategy Deletion Deletion Harvesting Harvesting

17. Product Cycle Dimensions Length Length Shape Shape Generalized product Generalized product High learning product High learning product Low learning product Low learning product Fashion product Fashion product Fad product Fad product Source: www.your90s.com

18. Why do New Products Fail? Insignificant “point of difference” Insignificant “point of difference” Incomplete market and product definition before development starts Incomplete market and product definition before development starts Too little market attentiveness Too little market attentiveness Poor execution of marketing mix Poor execution of marketing mix Bad timing Bad timing No economical access to buyers No economical access to buyers