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20 Introducing New Market Offerings

Chapter Questions

What challenges does a company face in developing new products and services? What organizational structures and processes do managers use to oversee new-product development? What are the main stages in developing new products and services?

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Chapter Questions

What is the best way to manage the newproduct development process? What factors affect the rate of diffusion and consumer adoption of newly launched products and services?

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Categories of New Products

New to the World Additions

Improvements
Repositionings Cost reductions
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The Innovation of Wii

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Factors That Limit New Product Development

Shortage of ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles

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Table 201. Finding One Successful Product

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What is a Venture Team?

A venture team is a cross-functional group charged with developing a specific product or business.

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Criteria for Staffing Venture Teams

Desired team leadership style Desired level of leader expertise Team member skills and expertise Level of interest in concept Potential for personal reward Diversity of team members

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Figure 20.1 New-Product Development Decision Process

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Ways to Find Great New Ideas

Run informal sessions with customers Allow time off for technical people to putter on pet projects Make customer brainstorming a part of plant tours Survey your customers Undertake fly on the wall research to customers

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More Ways to Find Great Ideas

Use iterative rounds with customers Set up a keyword search to scan trade publications Treat trade shows as intelligence missions Have employees visit supplier labs Set up an idea vault

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Drawing Ideas from Customers

Observe customers using product Ask customers about problems with products Ask customers about their dream products Use a customer advisory board or a brand community of enthusiasts to discuss product

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Demand-First Innovation and Growth (DIG) Framework

Demand Landscape

Opportunity Space
Strategic Blueprint

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Idea Generation: Creativity Techniques

Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping

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Lateral Mapping

Gas stations + food Cafeteria + Internet Cereal + snacking Candy + toy Audio + portable

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Table 20.2 Product Idea Rating Device

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Figure 20.2 Forces Fighting New Ideas

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Figure 20.3 Product and Brand Positioning

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Concept Testing

Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency

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Figure 20.4 Conjoint Analysis

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Figure 20.5 Utility Functions Based on Conjoint Analysis

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Figure 20.6 Product Life-Cycle Sales for Three Types of Products

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Table 20.3 Projected Five-Year Cash Flow Statement

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Prototype Testing

Alpha testing Beta testing Rank-order method Paired-comparison method Monadic-rating method Market testing

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Consumer Goods Market Testing

Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets

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Test Market Decisions

How many test cities? Which cities? Length of test? What information to collect? What action to take?

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Timing of Market Entry

First entry Parallel entry Late entry

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What is Adoption?
Adoption is an individuals decision to become a regular user of a product.

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Stages in the Adoption Process

Awareness Interest

Evaluation
Trial Adoption

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Figure 20.7 Adopter Categorization on the Basis of Relative time of Adoption

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Characteristics of an Innovation

Relative advantage Compatibility Complexity Divisibility Communicability

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For Review

What challenges does a company face in developing new products and services? What organizational structures and processes do managers use to oversee new-product development? What are the main stages in developing new products and services?

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

20-33

For Review

What is the best way to manage the newproduct development process? What factors affect the rate of diffusion and consumer adoption of newly launched products and services?

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

20-34