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Developing & Managing
Products
Chapter 11
New Product Development Process
New Product Strategy
Idea Generation
Idea Screening
Business Analysis
Development
Test Marketing
Commercialization
New-product Strategy

Link product
development to MKT
strategy
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3M
Identify markets and
strategic roles

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Environmental
scanning
SWOT analysis
Source: http://www.logotecs.com
Idea Generation
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Customers
Employees
Distributors
Vendors
Competitors
Research &
Development
Consultants
Source: http://www.clker.com/clipart-9721.html
Idea Screening

First filter

Committee Reviews

Concept test
Business Analysis

Last checkpoint before capital is
committed
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Look at product and marketing strategy
needed to commercialize it
Preliminary figures
Development

“Paper into prototype”
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Testing against standards

Work on marketing mix

Team-based analysis
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Internet
Customer panels
Market Testing
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Company chooses a specific market, based
on criteria
Advantages
Disadvantages
Internet
Commercialization
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Positioning and launching a product
Most expensive step
Slotting fee
Failure fee
Diffusion of Innovation

Innovators (2.5%)
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Early adopters (13.5%)

Early majority (34%)

Late majority (34%)
Source: http://tutor2u.net
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Laggards (16%)
Diffusion of Innovation

Factors for Adoption
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Complexity
Compatibility
Relative advantage
Observability
Trialability
Implications
The Product Life Cycle
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Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Introduction Stage

Create awareness and encourage
customers to try the product

Advertising

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Primitive demand
Distribution issues
Pricing issues
Growth Stage

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Rapid increases in sales
Competition
Advertising

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Selective demand
Who is buying?
Distribution
Maturity Stage

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Slowing sales and decreasing profits
Marketing strategy

Hold market share
Decline Stage

Sales and profits drop

Marketing strategy

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Deletion
Harvesting
Product Cycle Dimensions

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Length
Shape
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Generalized product
High learning product
Low learning product
Fashion product
Fad product
Why do New Products Fail?
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Insignificant “point of difference”
Incomplete market and product definition
before development starts
Too little market attentiveness
Poor execution of marketing mix
Bad timing
No economical access to buyers