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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 9
Developing New Products and Services
1-2
MIrwin/McGraw-Hill
cGraw-Hill/Irwin
Copyright
© 2001
by The
McGraw-Hill
Inc.
rights
reserved.
Copyright
© 2004
by The
McGraw-Hill Companies,
Companies, Inc.
All All
rights
reserved.
After studying this chapter you
should be able to:

Recognize the different types of new products.

Discuss the different sources of new products.

Understand the stages in the new-product
development process.

Describe the way marketing research is used in
the new-product development process.

Appreciate the keys to new-product success.
1-3Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
New-Product Overview
New products
drive sales and
profit growth.
New Product
Failure Rate
May Be 80%
New products
may gain market share
from competitors.
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Types of New Products
New to the World Products
New Category Entries
Additions to Product Lines
Product Improvements
Repositionings
1-5Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Sources of New Products
External
Sourcing
Internal
Development
Collaborative
Venture
1-6Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
New-Product Development Process
Idea Generation
Prototype
Development
Idea Screening
Test Marketing
Concept
Development
& Testing
Commercialization
Business
Analysis
1-7Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
New-Product Development Approaches
1-8Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Idea Generation

Idea Generation:

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The initial stage for the new-product
development process.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Idea Screening

Idea Screening:

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Evaluate the idea pool and reduce it to a
smaller and more attractive set of potential
new products.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Concept Development and Testing

Concept Development:

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The process of shaping and refining the idea into a
more complete product concept.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Business Analysis

Business Analysis:

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1-12
Stage of the new-development process that
calls for preparing initial marketing plans for the
product.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Prototype Development

Prototype Development:

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Converting the concept into an actual product.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Test Marketing

Test Marketing:

Testing the product
prototype and marketing
strategy in simulated or
actual market situations.

Simulated Test
Marketing:

Irwin/McGraw-Hill
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Evaluating a new product
in situations contrived to
be similar to how
consumers would
purchase and use it.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Test Marketing

Standard Test Marketing:

Irwin/McGraw-Hill
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Testing a new product and its marketing strategy
in actual market situations.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Commercialization

Commercialization:

The firm introduces the product on a full-scale basis,
involving:
 Understanding Consumer Adoption
 Timing
 Coordination
Irwin/McGraw-Hill
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Consumer Adoption Process
Consumer
Adoption Stage
Marketing Strategy
Objective
Awareness
Communicate Availability
Interest
Communicate Product Benefits
Evaluation
Emphasize Advantages
Trial
Motivate Customers to Try
Adoption
Ensure Customer Satisfaction
Irwin/McGraw-Hill
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Keys to New-Product Success
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Organizational Approaches to New
Product Development
Balanced Matrix
Organization
Project Team
Organization
Project Matrix
Organization
Irwin/McGraw-Hill
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing-Research Support
Prelaunch
Focus Groups
 Market Definition
Studies
 Target Segment
Identification
 Concept Tests
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Name & Package
Evaluation
 Product Tests
 Copy Tests
 Simulated Test
Markets
 Test Markets

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Market-Research Support
Rollout
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Awareness & Attitude Studies
Usage Studies
Tracking Studies
Product Refinement Tests
New Advertising Strategy Tests
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
“The Best Products for 2001”
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Harmony low-fat cereal from General
Mills
The Samsung 1300 from Sprint PCS
Microsoft’s Xbox
Credit Watch
Hitachi’s DZ-MV100A Camcorder
Apple’s I Pod
Listerine’s PocketPaks
Irwin/McGraw-Hill
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.