Marketing I

Lecture 7
Winter Semester 2021/2022
Course Lecturers: Dr. Sara El-Deeb
Dr. Hadeer Hammad
Chapter 9:
New-Product Development
and Product Life-Cycle
Strategies

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Agenda
New-product Stages of product- Types of product-life
development process life cycle cycles

1 3 5

2 4

Definition of product- Product-life cycle

life cycle strategies

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The New Product Development Process
Major Stages in New-product Development

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The New Product Development Process

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The New Product Development Process
Idea Generation

Idea generation is the systematic search for new-product ideas.

Sources of new-product ideas:

•Internal
•External

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The New Product Development Process
Idea Generation

Internal Sources External Sources

Refer to the company’s Refer to sources outside the
own formal research and company such as customers,
development, management competitors, suppliers, and
and staff. outside design firms.

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The New Product Development Process
Example: Internal Sources

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The New Product Development Process
Example: External Sources

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The New Product Development Process
Example: External Sources

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The New Product Development Process
Idea Screening

Idea screening refers to identifying good ideas and dropping poor ideas

R-W-W Screening Framework:

• Is it real?
• Can we win?
• Is it worth doing?

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The New Product Development Process
Idea Screening: Example

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The New Product Development Process
Concept Development and Testing

Under concept development and testing, an attractive idea must be developed

into a product concept.

Concept testing refers to testing new product concepts with groups of target
consumers.

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The New Product Development Process
Concept Development and Testing

The marketer’s task is to:

• Develop the new product idea into alternative product concepts

• Find out how attractive each concept is to customers
• Choose the best one

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The New Product Development Process
Concept Development and Testing: Example

Concept 1: An affordable midsized car designed as a second family car to be

used around town for running errands and visiting friends.

Concept 2: A green car appealing to environmentally conscious people who

want practical, low-polluting transportation.

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The New Product Development Process
Concept Development and Testing

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The New Product Development Process
Concept Development and Testing

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The New Product Development Process
Concept Development and Testing

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The New Product Development Process
Concept Development and Testing

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The New Product Development Process
Market Strategy Development
Marketing strategy development refers to the initial marketing strategy for
introducing the product to the market.

It consists of three parts:

1. Describes the target market, planned value proposition, sales, market
share, and profit goals for the first few years.
2. Outlines the product’s marketing mix and marketing budget for the first
year.
3. Describes the planned long-run sales, profit goals, and changes in the
marketing-mix strategy.

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The New Product Development Process
Business Analysis

Business analysis involves a review of the sales, costs, and profit projections
to find out whether they satisfy the company’s objectives.

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The New Product Development Process
Product Development

Product development involves the creation and testing of one or more

physical versions by the R&D or engineering departments.

Developing the product concept into a physical product to ensure that the
product idea can be turned into a workable market offering.

Requires increase in investment.

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The New Product Development Process
Test Marketing

Test marketing is the stage at which the product and marketing program are
introduced into more realistic marketing settings.

Provides the marketer with experience in testing the product and entire
marketing program before full introduction.

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The New Product Development Process
Test Marketing

Firms may not test market Firms must test market

-Simple line extension -New product with large investment
-Copy of competitor product -Uncertainty about product or
-Low costs marketing program
-Management confidence

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The New Product Development Process
Example

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The New Product Development Process
Example

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The New Product Development Process
Commercialization

Commercialization: Introducing the new product into the market.

The company must decide on:

• Introduction timing
• Where to launch the product

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Product Life Cycle
PLC Stages

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Product Life Cycle
PLC Stages

Product Development: Zero sales and increasing investment costs

Introduction: Slow sales and nonexistent profits

Growth: Rapid market acceptance and increasing profits

Maturity: Slow sales growth and profits level off or decline

Decline: Sales fall off and profits drop

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Product Life Cycle
Example: GOOGLE Maps VPS – Product Development Stage

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Product Life Cycle Stratgies
Introduction Stage

• Slow sales growth

• Little or no profit
• High distribution and promotion expenses

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Product Life Cycle Stratgies
Growth Stage

• Sales increase
• New competitors enter the market
• Profits increase
• Economies of scale

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Product Life Cycle Stratgies
Maturity Stage

• Slowdown in sales
• Increased competition
• Substitute products
• Increased promotion and R&D to support sales and profits

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Product Life Cycle Stratgies
Decline Stage

• Maintain the product

• Harvest the product
• Drop the product

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Product Life Cycle Stratgies

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Product Life Cycle Stratgies
Example: PLC

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Product Life Cycle Stratgies
Example: PLC

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Product Life Cycle Stratgies
Guess which Stage?

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Product Life Cycle Stratgies
Types of PLCs

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Product Life Cycle Stratgies
Types of PLCs

Style: A basic and distinctive mode of expression. A style has a cycle showing
several periods of renewed interest.

Fashion: A currently accepted or popular style in a given field. Fashions tend to

grow slowly, remain popular for a while, and then decline slowly.

Fad: A temporary period of unusually high sales driven by consumer enthusiasm

and immediate product or brand popularity.

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Product Life Cycle Stratgies
Example: Style

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Product Life Cycle Stratgies
Example: Fashion

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Product Life Cycle Stratgies
Example: Fad

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ANNOUNCEMENT
Berlin Workshops

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ANNOUNCEMENT 2
• Sally Elsaid Elzeiny

• Job Title: Communications Excellence

Manager - Unilever North Africa, Levant, and
Iraq

• Monday 28 November in H15 at 3:45 (5th slot)

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Thanks!
Any questions?

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