20 Introducing New Market Offerings 1
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20Introducing New Market Offerings
1
Chapter Questions
What challenges does a company face in developing new products and services?
What organizational structures and processes do managers use to oversee new-product development?
What are the main stages in developing new products and services?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-2
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-3
Chapter Questions
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?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-4
Categories of New Products
New to the World
Additions
Improvements
Repositionings
Cost reductions
The Innovation of Wii
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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
Table 201. Finding One Successful Product
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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.
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 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
Figure 20.1 New-Product Development Decision Process
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-10
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-11
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
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-12
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
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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
Demand-First Innovation and Growth (DIG) Framework
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Demand Landscape
Opportunity Space
Strategic Blueprint
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Idea Generation: Creativity Techniques
Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping
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Lateral Mapping
Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable
Table 20.2 Product Idea Rating Device
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Figure 20.2 Forces Fighting New Ideas
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Figure 20.3 Product and Brand Positioning
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-20
Concept Testing
Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions,
purchasing frequency
Figure 20.4 Conjoint Analysis
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Figure 20.5 Utility Functions Based on Conjoint Analysis
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Figure 20.6 Product Life-Cycle Sales for Three Types of Products
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Table 20.3 Projected Five-Year Cash Flow Statement
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-25
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
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-27
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
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-29
What is Adoption?
Adoption is an individual’s decision to become a regular user of a product.
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Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
Figure 20.7 Adopter Categorization on the Basis of Relative time of Adoption
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Characteristics of an Innovation
Relative advantage Compatibility Complexity Divisibility Communicability
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For Review
What challenges does a company face in developing new products and services?
What organizational structures and processes do managers use to oversee new-product development?
What are the main stages in developing new products and services?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-33
For Review
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?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-34
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