pomppt-131126083608-phpapp02

8/18/2019 pomppt-131126083608-phpapp02

1/24

Chapter NineChapter Nine

New-Product Development andNew-Product Development and

Product Life-Cycle StrategiesProduct Life-Cycle Strategies

8/18/2019 pomppt-131126083608-phpapp02

2/24

New-Pro uct Deve opmentand Product Life-Cycle

Strategies

• New-Product Development Strategy

• New-Product Development Process• Managing New-Product Development

• Product Life-Cycle Strategies

• Additional Product and Service

Considerations

8/18/2019 pomppt-131126083608-phpapp02

3/24

New-Product

Development StrategyTwo ways to obtain new products

Acquisition refers to the uying of a whole company! apatent! or a license to produce someone else"s product#

New product development refers to original products!product improvements! product modifications! and newrands developed from the firm"s own research anddevelopment#

8/18/2019 pomppt-131126083608-phpapp02

4/24

$easons for new productfailure

8/18/2019 pomppt-131126083608-phpapp02

5/24

New-Product

Development Processa!or Stages in New-Product Development

8/18/2019 pomppt-131126083608-phpapp02

6/24

New-Product

Development ProcessIdea Generation

"dea generation is the systematic search

for new-product ideasSources of new-product ideas• %nternal

• &'ternal

8/18/2019 pomppt-131126083608-phpapp02

7/24

New-Product

Development Process"nternal sources refer to thecompany"s own formalresearch and development!management and staff! and

entrepreneurial programs##$ternal sources refer to

sources outside the companysuch as customers!competitors! distriutors!

suppliers! and outside designfirms#

8/18/2019 pomppt-131126083608-phpapp02

8/24

"dea Screening• %dentify good ideas and drop poorideas

• $-(-( Screening )ramewor*+,# %s it real

.# Can we win

/# %s it worth doing

8/18/2019 pomppt-131126083608-phpapp02

9/24

Concept Development and

Testing

Product idea is an idea for a possile product that thecompany can see itself offering to the mar*et#

Product concept is a detailed version of the idea statedin meaningful consumer terms#

Product image is the way consumers perceive an actualor potential product#

8/18/2019 pomppt-131126083608-phpapp02

10/24

ar%eting StrategyDevelopment

• Mar*eting strategy development refers to theinitial mar*eting strategy for introducing theproduct to the mar*et

• Mar*eting strategy statement includes+0 Description of the target mar*et0 1alue proposition0 Sales and profit goals

&usiness analysis involves a review of the sales!costs! and profit pro2ections to find out whetherthey satisfy the company"s o2ectives

8/18/2019 pomppt-131126083608-phpapp02

11/24

Marketing Strategy

DevelopmentProduct development involves the

creation and testing of one or morephysical versions y the $3D orengineering departments

• $e4uires an increase in investment

Test mar%eting is the stage at which theproduct and mar*eting program areintroduced into more realistic mar*etingsettings#

• Provides the mar*eter with e'perience in

testing the product and entire mar*etingprogram efore full introduction#

8/18/2019 pomppt-131126083608-phpapp02

12/24

Types of Test ar%ets

8/18/2019 pomppt-131126083608-phpapp02

13/24

ar%eting Strategy

Development• Advantages of

simulated testmar*ets0 Less e'pensive than

other test methods0 )aster0 $estricts access y

competitors• Disadvantages

0 Not considered asreliale and accurate

due to the controlledsetting

8/18/2019 pomppt-131126083608-phpapp02

14/24

Managing New-Product

Development Successful new-product development

should e+

• Customer centered• 5eam centered

• Systematic

8/18/2019 pomppt-131126083608-phpapp02

15/24

New-Product Development

StrategiesCustomer-centered new product development focuses on

finding new ways to solve customer prolems and createmore customer satisfying e'periences#

• 6egins and ends with solving customer prolems#

Sequential new-product development is a developmentapproach where company departments wor* closely togetherindividually to complete each stage of the process eforepassing it along to the ne't department or stage#

• %ncreased control in ris*y or comple' pro2ects#• Slow#

8/18/2019 pomppt-131126083608-phpapp02

16/24

Team-based new-product development is a developmentapproach where company departments wor* closely togetherin cross-functional teams! overlapping in the product-

development process to save time and increaseeffectiveness#

Systematic new-product development is an innovativedevelopment approach that collects! reviews! evaluates! andmanages new-product ideas#

• Creates an innovation-oriented culture• 7ields a large numer of new-product ideas

8/18/2019 pomppt-131126083608-phpapp02

17/24

Product Life-Cycle StrategiesProduct Life Cycle

P d L f C l

8/18/2019 pomppt-131126083608-phpapp02

18/24

• Product development– Sales are zero and investment costs mount

• Introduction

– Slow sales growth and profts are nonexistent

• Growth– Rapid market acceptance and increasing profts.

• aturit!

– Slowdown in sales growth and profts level o" ordecline

• #ecline

– Sales $all o" and profts drop

Product Life-CycleStrategies

8/18/2019 pomppt-131126083608-phpapp02

19/24

Product Life-Cycle Strategies

• Slow sales growth

• %ittle or no proft• &igh distri'ution and promotion

expense

Introduction Stage

8/18/2019 pomppt-131126083608-phpapp02

20/24


• Sales increase

• (ew competitors enter the market

• Price sta'ilit! or decline to increase volume

• )onsumer education

• Profts increase

• Promotion and manu$acturing costs gaineconomies o$ scale

Growth Stage

8/18/2019 pomppt-131126083608-phpapp02

21/24


• Slowdown in sales

• an! suppliers

• Su'stitute products

• *vercapacit! leads to competition

• Increased promotion and R+# to support salesand profts

Maturity Stage

8/18/2019 pomppt-131126083608-phpapp02

22/24


• aintain the product

•&arvest the product• #rop the product

Decline Stage

8/18/2019 pomppt-131126083608-phpapp02

23/24

Product Life-Cycle StrategiesStyle is a 'asic and distinctive mode o$ expression.

• )lothing

Fashion is a currentl! accepted or popular st!le in agiven feld.

• arriages in 'an,uet halls.

Fads are temporar! periods o$ unusuall! high salesdriven '! consumer enthusiasm and immediateproduct or 'rand popularit!.

• Sales o$ countr! -ags on national independenceda!.

8/18/2019 pomppt-131126083608-phpapp02

24/24


Documents

pomppt-131126083608-phpapp02