Chapter 20 intro new market offer

1Introducing New Market

Offerings

Arnold A. Tolentino7 February 2014

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5 Things to Know in Introducing New Market Offerings

1Challenges

2Organizational structures

& processes

3Stages in Development

4Best ways to manage NPD

5Consumer Adoption

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Continuous Innovation to seize new market opportunities and to create new choices

New Product Success Unique, superior product Well-defined product concept Produce locally, think globally

New Product Failure Accept as part of the “game” to be

successful

Challenges

5 Types of New Products

1New to the World

2Additions

3Improvements

4Repositioning

5Cost reductions

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Organizational Structures for the Development Process

New Product Management

Budget R & D

Marketing

SVP – Product Development

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What is a Venture Team?

A venture team is a cross-functional group charged with

developing a specific product or business; intrapreneurs are relieved of other duties and provided a budget and time

frame.

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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

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New-Product Development Decision Process

DROP

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1 Idea

Genera-tion

Is it worth considering

?

2 Idea

Screen-ing

Is it compatible

with corporate

objectives?

3Concept Dev’t & Testing

Can we find a good concept

consumers say they

would try?

4 Mktg Strat Dev’t

Can we find a cost-

effective, affordable

mktg strategy?

5B’ness

Analysis

Will this product

meet our businesss

goals?

Y Y Y Y Y

N N N N N

New-Product Development Decision Process

DROP

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6 Prod Dev’t

Have we got a

technically and

c’mercially sound

product?

7 Market Testing

Have product

sales met xpectations

?

8Commercializa-

tion

Are product sales

meeting xpectations

?

Y Y Y Lay Future Plans

Send it back for

prod dev’t?

Modify the prod or mktg

program?

Y

Y

New-Product Development Decision Process

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Stages in Managing the Development Process

1Dream to Ideas

2Concept to Strategy

3Development to

Commercialization

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Ideas : 10 Ways to Find Them

1. Run informal sessions

2. Technical people to putter on pet projects

3. Customer brainstorming as part of plant tours

4. Survey your customers

5. Undertake “fly on the wall” research

6. Use iterative rounds with customers

7. Do keyword search to scan trade publications

8. Treat trade shows as intelligence missions

9. Have employees visit supplier labs

10. Set up an idea vault

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Ideas : How to Obtain from Customers Observe how they use the product Ask about their problems with the

products Ask about their dream products Use advisory board or a brand

community of enthusiasts to discuss product

Challenge them to change or improve your product

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Concept Testing

Communicability and believability

Need level Gap level Perceived value Purchase intention User targets,

purchase occasions, purchasing frequency

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Marketing Strategy

First Stage:

Target market’s size, structure, and behavior

Second Stage:Planned price, distribution, and promotion for year one

Third Stage:Long-run sales and profit goals and marketing-mix

strategy over time

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Test Market Decisions

Select test cities Which cities Length of test What information to

collect What action to take

What is Adoption?

Adoption is an individual’s decision to become a regular user of a product.

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5 Stages in the Adoption Process

Awareness(aware but lacks info)

Interest(seek info)

Evaluation(consider to try product)

Trial(try to improve his estimate of its value)

Adoption(decide as regular user)

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In Summary Company, to be competitive,

must welcome all ideas for consideration to develop appropriate new products;

New products developed must passed series of processes and rigid market tests, the challenge is on marketeer’s ability to ensure product adoption;

The consumer-adoption process may be influenced by many factors beyond marketeer’s control, including consumers willingness to try new products.

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