Marketing An Introduction 8 New Product Development and

Marketing An Introduction 8 New Product Development and

Marketing An Introduction 8 New Product Development and Product LifeCycle Strategies Copyright 2015 Pearson Education, Inc. 3-1 Learning Objectives

Explain how companies find and develop new product ideas. List and define the steps in the new product development process and the major considerations in managing this process. Copyright 2015 Pearson Education Ltd. 8-2 Learning Objectives

Describe the stages of the product life cycle and how marketing strategies change during a products life cycle. Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Copyright 2015 Pearson Education Ltd. 8-3

First Stop: SamsungEnriching Customers Lives through New Product Innovation Transition from a low-cost knock-off to a cutting-edge technology brand Aimed to dethrone Sony Set out to become a premier brand Focused on customer-centered new product Wants to be the first company that finds and develops the next product in consumer electronics Copyright 2015 Pearson Education Ltd.

8-4 New Product Development Development of new products through the firms own research and development efforts New product - Original products, product improvement and modifications, and new brands Creating successful new products requires: Understanding consumers, markets, and competitors Developing products that deliver superior value

to customers Copyright 2015 Pearson Education Ltd. 8-5 Figure 8.1 - Major Stages in New Product Development Copyright 2015 Pearson Education Ltd. 8-6 Idea Generation

Systematic search for new product ideas Internal idea sources: Intrapreneurial programs Internal social networks External idea sources: Competitors Customers Distributors and suppliers Copyright 2015 Pearson Education Ltd. 8-7

Idea Generation Crowdsourcing: Inviting broad communities of people into the new product innovation process Copyright 2015 Pearson Education Ltd. 8-8 Idea Screening

Screening new product ideas to spot good ones and drop poor ones as soon as possible Ways of screening new ideas: New idea write-up reviewed by a committee R-W-W frameworkReal, win, worth doing Copyright 2015 Pearson Education Ltd. 8-9 Product Concept A product concept is a detailed version of the new product idea stated in meaningful

consumer terms.MM A product idea is an idea for a possible product that the company can see itself Role of Marketing offering to the market. A product image is the way a product is perceived by consumers. Copyright 2015 Pearson Education Ltd. 8 - 10 Concept Development Developing a new product into alternative

product concepts Find out how attractive each concept is to customers Choose the best one Copyright 2015 Pearson Education Ltd. 8 - 11 Concept Testing Testing a group of target consumers to find out the degree of consumer appeal toward the concepts

Methods: Presenting the concepts to consumers symbolically or physically or with a word or picture description Asking customers about their reactions to the concepts Copyright 2015 Pearson Education Ltd. 8 - 12 Marketing Strategy Development Initial marketing strategy for a new product The marketing strategy statement

Describes the target market, the planned value proposition, and the sales, market-share, and profit goals for the first few years Outlines the planned product price, distribution, and marketing budget for the first year Describes the planned long-run sales, profit goals, and marketing mix strategy Copyright 2015 Pearson Education Ltd. 8 - 13 Business Analysis and Product Development

Business analysis: Review of the sales, costs, and profit projections for a new product To find out whether the projections satisfy the companys objectives Product development: Develop the product concept into a physical product To ensure that the product idea can be turned into a workable market offering Copyright 2015 Pearson Education Ltd. 8 - 14

Test Marketing The product and its proposed marketing program are introduced into realistic market settings. Gives the marketer an experience with marketing a product before the introduction Tests the product and its marketing program Costs can be high Time consuming Copyright 2015 Pearson Education Ltd. 8 - 15

Test Marketing Alternatives to standard test markets Controlled test markets Simulated test markets Reasons for using alternative test markets Reduce the costs of test marketing Speed up the process Copyright 2015 Pearson Education Ltd. 8 - 16

Commercialization Introducing a new product into the market Considerations for launching a new product Time Place Single location, region, national market, or international market Copyright 2015 Pearson Education Ltd. 8 - 17

Managing New Product Development Requires a holistic approach Customer-centered new product development Team-based new product development Systematic new product development Copyright 2015 Pearson Education Ltd. 8 - 18 Customer-Centered New Product Development Focuses on finding new

ways to solve customer problems and create more customersatisfying experiences Copyright 2015 Pearson Education Ltd. 8 - 19 Team-Based and Systematic New Product Development Team-based new product development Various company departments work together, overlapping the steps in the product development process.

Saves time and increases effectiveness May create more organizational tension and confusion than a sequential approach Systematic new product development Innovation management systems collect, review, evaluate, and manage new product ideas. Avoids the surfacing and sputtering of ideas Helps create an innovation-oriented company culture Yields a larger number of new product ideas Copyright 2015 Pearson Education Ltd. 8 - 20

Figure 8.2 - Sales and Profits over the Products Life from Inception to Decline Copyright 2015 Pearson Education Ltd. 8 - 21 Figure 8.3 - Styles, Fashions, and Fads Copyright 2015 Pearson Education Ltd.

8 - 22 Table 8.2 - Summary of Product LifeCycle Characteristics and Objectives Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317. 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. Copyright 2015 Pearson Education Ltd. 8 - 23 Table 8.2 - Summary of Product Life-Cycle Strategies

Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317. 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. Copyright 2015 Pearson Education Ltd. 8 - 24 Product Decisions and Social Responsibility Considerations for companies Public policy issues Regulations regarding acquiring or dropping

products Patent protection Product quality and safety Product warranties Copyright 2015 Pearson Education Ltd. 8 - 25 International Product and Services Marketing Challenges To find what products and services to introduce

and in which countries To decide on how much to standardize or adapt the products and services for world markets Copyright 2015 Pearson Education Ltd. 8 - 26

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