Introducing New Market Offerings Marketing Management, 13 th ed.

Introducing New Market Offerings

Marketing Management, 13th ed

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20-2

Chapter Questions

• What challenges does a company face in developing new products and services?

• What organizational structures and processes do managers use to manage new-product development?

• What are the main stages in developing new products and services?


Chapter Questions (cont.)

• What is the best way to manage the new-product development process?

• What factors affect the rate of diffusion and consumer adoption of newly launched products and services?


Categories of New Products

New-to-the-world

Cost reductions

New product lines

Additions

Improvements

Repositionings


The World’s Most Innovative Companies

• Apple• Google• Toyota• General Electric• Microsoft• Procter & Gamble• 3M• Walt Disney

• IBM• Sony• Wal-Mart• Honda • Starbucks• Target• BMW• Samsung


Seven Notions of Innovation

• See the future through the eyes of your customer

• Intellectual property and brand power are key assets

• Use digital technology to create tools for customers

• Build a championship team• Innovation is a state of mind• Speed is critical, so push your organization• Partner up if you’re not the best


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


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.


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


Ways to Find Great New Ideas

• Run informal sessions with customers

• Allow time off for technical people to putter on pet projects

• Make customer brainstorming a part of plant tours

• Survey your customers

• Undertake “fly on the wall” research to customers


More Ways to Find Great Ideas

• Use iterative rounds with customers

• Set up a keyword search to scan trade publications

• Treat trade shows as intelligence missions

• Have employees visit supplier labs

• Set up an idea vault


Drawing Ideas from Customers

• Observe customers using product

• Ask customers about problems with products

• Ask customers about their dream products

• Use a customer advisory board or a brand community of enthusiasts to discuss product


Idea Generation: Creativity Techniques

• Attribute listing

• Forced relationships

• Morphological analysis

• Reverse assumption analysis

• New contexts

• Mind mapping


Lateral Mapping

• Gas stations + food

• Cafeteria + Internet

• Cereal + snacking

• Candy + toy

• Audio + portable


Variations on Failure

• Absolute product failure

• Partial product failure

• Relative product failure


Concepts in Concept Development

• Product idea

• Product concept

• Category concept

• Brand concept

• Concept testing


Concept Testing

• Communicability and believability

• Need level

• Gap level

• Perceived value

• Purchase intention

• User targets, purchase occasions, purchasing frequency


Marketing Strategy

• Target market’s size, structure, and behavior

• Planned price, distribution, and promotion for Year One

• Long-run sales and profit goals and marketing-mix strategy over time


Product Development

• Quality function deployment (QFD)• Customer attributes• Engineering attributes


Prototype Testing

• Alpha testing

• Beta testing• Rank-order method• Paired-comparison method• Monadic-rating method

• Market testing


Consumer Goods Market Testing

• Sales-Wave Research• Simulated Test Marketing• Controlled Test Marketing• Test Markets


Test Market Decisions

• How many test cities?

• Which cities?

• Length of test?

• What information to collect?

• What action to take?


Timing of Market Entry

• First entry• Parallel entry• Late entry


Criteria for Choosing Rollout Markets

• Market potential

• Company’s local reputation

• Cost of filling pipeline

• Cost of communication media


What is Adoption?

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


Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption


Characteristics of an Innovation

• Relative advantage• Compatibility• Complexity• Divisibility• Communicability

Introducing New Market Offerings Marketing Management, 13 th ed.

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