MARKETING MANAGEMENT 12 th edition 20 Introducing New Market Offerings KotlerKeller.

MARKETING MANAGEMENT12th edition

20 Introducing New Market Offerings

Kotler Keller

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Chapter Questions

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

• What organizational structures are used to manage new-product development?

• What are the main stages in developing new products?

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

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

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3M Emphasizes New Product Development

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Categories of New Products

New-to-the-world

Cost reductions

New product lines

Additions

Improvements

Repositionings

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Innovations

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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

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Table 20.1 Finding One Successful New Product

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Venture Team

Cross-functional group charged withdeveloping a specific product or business; intrapreneurs are relieved of other dutiesand 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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Figure 20.1 The New Product-Development Decision Process

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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

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Variations on Failure

• Absolute product failure• Partial product failure• Relative product failure

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Table 20.2 Product-Idea Rating Device

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Concepts in Concept Development

• Product idea

• Product concept

• Category concept

• Brand concept

• Concept testing

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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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Figure 20.5 Utility Functions Based on Conjoint Analysis

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Airlines Use Conjoint Analysis

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Marketing Strategy

• Target market’s size, structure, and behavior

• Planned price, distribution, and promotion for Year 1

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

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Figure 20.6 PLS Sales for Three Product Types

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Table 20.3 Projected 5-year Cash-Flow Statement (in thousands $)

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Product Development

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

attributes

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Prototype Testing

• Alpha testing

• Beta testing

– Rank-order method

– Paired-comparison method

– Monadic-rating method

• Market testing

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Consumer Goods Market Testing

• Sales-Wave Research• Simulated Test

Marketing• Controlled Test

Marketing• Test Markets

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Test Market Decisions

• How many test cities?

• Which cities?

• Length of test?

• What information?

• What action to take?

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Timing of Market Entry

• First entry

• Parallel entry

• Late entry

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Criteria for Choosing Rollout Markets

• Market potential

• Company’s local reputation

• Cost of filling pipeline

• Cost of communication media

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Consumer-Adoption Process

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

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Figure 20.7 Adopter Categorization

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Characteristics of an Innovation

• Relative advantage

• Compatibility

• Complexity

• Divisibility

• Communicability

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Marketing Debate

Who should you target with new products?

Take a position:1. New products should always target newadopters.2. New products should target the broadestmarket possible.

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Marketing Discussion

Think about the last new productyou bought. How do you thinkits success will be affected by the five characteristics of an

innovation?