Kotler POM13e Student 09

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Chapter 9- slide 1Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

Chapter Nine

New-Product Development andProduct Life-Cycle Strategies


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New-Product Development and

Product Life-Cycle Strategies

New-Product Development Strategy

The New-Product DevelopmentProcess

Managing New-Product Development

Product Life-Cycle Strategies Additional Product and Service

Considerations

Topic Outline


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New-Product Development Strategy

Acquisition refers to the buying of a wholecompany, a patent, or a license to produce

someone elses product

New product development refers to originalproducts, product improvements, product

modifications, and new brands developedfrom the firms own research anddevelopment

Two ways to obtain new products


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New-Product Development

Reasons for new product failure


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The New-Product Development

Process

Idea generation is the systematic searchfor new-product ideas

Sources of new-product ideas

Internal

External

Idea Generation


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New-Product Development Process

Internal sources refer to the companys own

formal research and development,management and staff, and intrapreneurial

programs

External sources refer to sources outside the

company such as customers, competitors,distributors, suppliers, and outside design

firms

Idea Generation


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Copyright 2010 Pearson Education, Inc.



Process

Identify good ideas and drop poor ideas

R-W-W Screening Framework: Is it real?

Can we win?

Is it worth doing?

Idea Screening






Process

Product idea is an idea for a possible

product that the company can see itself

offering to the market Product concept is a detailed version of

the idea stated in meaningful consumer

terms Product image is the way consumers

perceive an actual or potential product

Concept Development and Testing






Process

Concept testing refers to testing new-

product concepts with groups of targetconsumers

Concept Development and Testing






Process

Marketing strategy development refers

to the initial marketing strategy for

introducing the product to the market Marketing strategy statement includes:

Description of the target market

Value proposition

Sales and profit goals

Marketing Strategy Development






Process

Business analysis involves a review of

the sales, costs, and profit projectionsto find out whether they satisfy the

companys objectives



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Process

Product development involves the

creation and testing of one or morephysical versions by the R&D or

engineering departments

Requires an increase in investment



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Process

Test marketing is the stage at which the

product and marketing program areintroduced into more realistic marketing

settings

Provides the marketer with experience intesting the product and entire marketing

program before full introduction



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Process

Types of Test Markets


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Process

Advantages of simulated test markets

Less expensive than other test methods Faster

Restricts access by competitors

Disadvantages Not considered as reliable and accurate

due to the controlled setting



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Process



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Process

Commercialization is the introduction

of the new product

When to launch

Where to launch Planned market rollout



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Managing New-Product

Development

Successful new-product development

should be:

Customer centered

Team centered

Systematic


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Managing New-Product

Development

Customer-centered new product

development focuses on finding new

ways to solve customer problems and

create more customer satisfying

experiences

Begins and ends with solving customer

problems

New-Product Development Strategies


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Sequential new-product development is adevelopment approach where company

departments work closely togetherindividually to complete each stage of theprocess before passing along to the nextdepartment or stage

Increased control in risky or complexprojects

Slow



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Chapter 9- slide 21Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall


Team-based new-product development is a

development approach where companydepartments work closely together in cross-

functional teams, overlapping in the product-

development process to save time and

increase effectiveness



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Systematic new-product development

is an innovative development

approach that collects, reviews,evaluates, and manages new-product

ideas

Creates an innovation-oriented culture Yields a large number of new-product

ideas



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Fads are temporary periods of unusually

high sales driven by consumer

enthusiasm and immediate product orbrand popularity



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Slow sales growth

Little or no profit

High distribution and promotion

expense

Introduction Stage


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Sales increase

New competitors enter the market

Price stability or decline to increase

volume

Consumer education

Profits increase

Promotion and manufacturing costs

gain economies of scale

Growth Stage


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Slowdown in sales

Many suppliers

Substitute products

Overcapacity leads to competition

Increased promotion and R&D tosupport sales and profits

Maturity Stage


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Market modifying

Product modifying

Marketing mix modifying

Maturity Stage Modifying Strategies


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Maintain the product

Harvest the product

Drop the product

Decline Stage


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Additional Product and Service

Considerations

Public policy and regulations regarding

developing and dropping products,patents, quality, and safety

Product Decisions and SocialResponsibility


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Additional Product and Service

Considerations

Determining what products and services to

introduce in which countries Standardization versus customization

Packaging and labeling

Customs, values, laws

International Product andServices MarketingChallenges


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Chapter 9 slide 31Copyright 2010 Pearson Education, Inc.

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retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc.Copyright 2010 Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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Kotler POM13e Student 09