1. MARKETING MANAGEMENT 12 th edition 20 Introducing New Market Offerings KotlerKeller

2. 20-2 Chapter Questions What challenges does a company face in developing new products? What organizational structures are used to manage new-product development? What are the main stages in developing new products? What is the best way to set up the new-product development process? What factors affect the rate of diffusion and consumer adoption of newly launched products?

3. 20-3 3M Emphasizes New Product Development

4. 20-4 Categories of New Products New-to-the-world Cost reductions New product lines Additions Improvements Repositionings

5. 20-5 Innovations

6. 20-6 Factors That Limit New Product Development Shortage of ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles

7. 20-7 Table 20.1 Finding One Successful New Product

8. 20-8 Venture Team Cross-functional group charged with developing a specific product or business; intrapreneurs are relieved of other duties and provided a budget and time frame.

9. 20-9 Criteria for Staffing Venture Teams Desired team leadership style Desired level of leader expertise Team member skills and expertise Level of interest in concept Potential for personal reward Diversity of team members

10. 20-10 Figure 20.1 The New Product- Development Decision Process

11. 20-11 Idea Generation: Creativity Techniques Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping

12. 20-12 Lateral Mapping Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable

13. 20-13 Variations on Failure Absolute product failure Partial product failure Relative product failure

14. 20-14 Table 20.2 Product-Idea Rating Device

15. 20-15 Concepts in Concept Development Product idea Product concept Category concept Brand concept Concept testing

16. 20-16 Concept Testing Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency

17. 20-17 Figure 20.5 Utility Functions Based on Conjoint Analysis

18. 20-18 Airlines Use Conjoint Analysis

19. 20-19 Marketing Strategy Target market’s size, structure, and behavior Planned price, distribution, and promotion for Year 1 Long-run sales and profit goals and marketing-mix strategy over time

20. 20-20 Figure 20.6 PLS Sales for Three Product Types

21. 20-21 Table 20.3 Projected 5-year Cash-Flow Statement (in thousands $)

22. 20-22 Product Development Quality function deployment (QFD) –Customer attributes –Engineering attributes

23. 20-23 Prototype Testing Alpha testing Beta testing –Rank-order method –Paired-comparison method –Monadic-rating method Market testing

24. 20-24 Consumer Goods Market Testing Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets

25. 20-25 Test Market Decisions How many test cities? Which cities? Length of test? What information? What action to take?

26. 20-26 Timing of Market Entry First entry Parallel entry Late entry

27. 20-27 Criteria for Choosing Rollout Markets Market potential Company’s local reputation Cost of filling pipeline Cost of communication media

28. 20-28 Consumer-Adoption Process Adoption is an individual’s decision to become a regular user of a product.

29. 20-29 Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption

30. 20-30 Figure 20.7 Adopter Categorization

31. 20-31 Characteristics of an Innovation Relative advantage Compatibility Complexity Divisibility Communicability

32. 20-32 Marketing Debate Who should you target with new products? Take a position: 1.New products should always target new adopters. 2. New products should target the broadest market possible.

33. 20-33 Marketing Discussion Think about the last new product you bought. How do you think its success will be affected by the five characteristics of an innovation?