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2. Exhibit 8-1 Decline Introduction Growth Maturity Time Sales Revenue/ period Development 2 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

3. Continuous period between development and introduction  No sales volume  Product is not yet completely defined  Profits do not exist  Price/value are being determined  Promotion may be oriented towards publicity about technological developments  Heavy investment to prepare the offering that satisfies customer needs 3 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4.  Low sales volume  Product is somewhat basic  Profits are typically negative  Price/value are being determined  Promotion is used to build awareness  If offering elements are outsourced or reside in a first-time value network, the logistical process experiences a learning curve 4 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

5.  Profits increase, new adopters and pragmatists accept product  Market penetration pricing  Product differentiation is important  Distribution is often important in the training and education of customers 5 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

6.  Profits have peaked  Promotion reinforces buyer decisions and focuses on supplier reputation and value  Remaining major players compete in an oligopoly  Distribution serves market sub-segments  Price is a major component of the marketing mix  New customers do not replace sales volumes as old customers move to newer products 6 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

7.  Consolidation usually occurs among suppliers  Product line is reduced to minimize product variation  Promotion reduced to minimal levels to accommodate existing customers  Price in relation to long-term contracts is a major part of the marketing mix 7 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

8. Idea Generation Product Screening Business Case Analysis Product/ Strategy/ Plan Dev. Test Market Product Launch Hand off to innovation/ translation team Stage 1 Stage 2Stage 3 Stage 4Stage 5 Stage 6 Stage 7 8 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

9.  New ideas can come from anywhere. customers technical department, marketing department, the sales team or anyone else within the company.  Ideas must then be screened––a process that is best carried out within the company, where internal experts know what is technically feasible. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 9

10.  Product description – a detailed explanation of the product including: - purpose of the product, - technical specifications, - market drivers, - barriers, - competitive environment, etc. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 10

11.  Project justification – a breakdown of the market size and potential in terms of: › the total addressable market (i.e. notional spend from all audiences who could be consumers of the new product); › the served available market (i.e. current spend on all products with which the new product would compete); › pricing strategy and revenue potential. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11

12.  Project plan – next steps and criteria for successful product launch,  Technical and manufacturing feasibility,  CAPEX requirements,  Risks,  Costs  Timings  Annual sales targets Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 12

13.  This is development of the physical product.  Prototypes are created for review, and the manufacturing and marketing plans delineated.  A quick and small scale customer review of the prototype so as to identify any major potential flaws in the product as early as possible. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 13

14.  Once sufficient prototypes have been made, it is highly recommended that the product is tested in the field. Software is typically put through a “beta” test to  Industrial products can be placed with potential customers for them to trial and then comment on their likelihood to buy the product if it were on the market. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 14

15.  The final stage kicks off the commercialization of the product with full-scale production.  Some companies choose to carry out further research upon launch of the new product to monitor its uptake and keep a pulse on its “health” within the market. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 15

16. Two development approaches:  Engineering Driven  Market/Customer Driven 16 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

17.  cross functional approach - Lead usually by Product Managers - Several departments involved - difficult to manage - complex interactions 17 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

18. Market Driven Standards:  New ideas are often question marks  Concept must fit and support the organization 18 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

19.  Understand the technology in depth  Define and redefine current and future customer needs and guide development with this process  Motivate other company departments and organizations  Screen and select ideas from all sources  Reward the efforts of the technical and support staff  Catalyze company resources to get the right talent on the job 19 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

20. - B2B new prdocut development is a cooperative environment between seller & buyer - Product/services are mostly modified according to special needs of different customers - R&D, engineering, design, operations, purchasing & sales departments of companies work together 20 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

21.  The missing marketing plan  No real need exists  The market size is overestimated or a “Me Too” product fails to penetrate the market  The offering fails to meet needs adequately  Market will not pay  Contrary perceptions of innovation A good marketing plan is a solution to all of these! 21 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

22. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall1-22 Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.