Introducing New

Market Offerings
Mara Shaira A. Siega, CPA
2 Chapter Questions
 What challenges does a company face in developing
new products and services?
 What organizational structures and processes do
managers use to manage new-product development?
 What are the main stages in developing new products
and services?
 What is the best way to manage the new-product
development process?
 What factors affect the rate of diffusion and
consumer adoption of newly launched products and
services?

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3 Categories of New Products
New-to-the-world

New product lines

Additions

Improvements

Repositioning

Cost reduction

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4 Seven Notions of Innovation
 See the future through the eyes of your customer
 Intellectual property and brand power are key
assets
 Use digital technology to create tools for
customers
 Build a championship team
 Innovation is a state of mind
 Speed is critical, so push your organization
 Partner up if you’re not the best

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5 Factors that Limit New Product Development

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

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6 Budgeting for New-Product Design

R&D outcomes are so uncertain that it is

difficult to use normal investment criteria when
budgeting for new-product development. Some
companies simply finance as many projects as
possible, hoping to achieve a few winners. Other
companies apply a conventional percentage-of-sales
figure or spend what the competition spends. Still
others decide how many successful new products
they need and work backward to estimate the
required investment

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7 What is a Venture Team?
A venture team is a cross-functional group
charged with developing a specific product or
business; intrapreneurs are relieved of other duties
and provided a budget and time frame.

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8 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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9 The New Product Development Decision Process

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10 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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11 Ways to Find Great New 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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12 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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13 Idea Generation: Creativity Technique

Attribute listing

Forced relationships

Morphological analysis

Reverse assumption analysis

New contexts

Mind map
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14 Concepts in Concept Development

Product idea

Product concept

Category concept

Brand concept

Concept testing

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

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16 Conjoint Analysis
Consumer preferences for alternative product
concepts can be measured with conjoint analysis, a
method for deriving the utility values that
consumers attach to varying levels of a product’s
attributes. Conjoint analysis has become one of the
most popular concept-development and testing
tools.

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17 Marketing Strategy
 Target market’s size, structure, and behavior
 Planned price, distribution, and promotion for
year one
 Long-run sales and profit goals and marketing-
mix strategy over time

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18 Business Analysis
After management develops the product concept
and marketing strategy, it can evaluate the
proposal’s business attractiveness. Management
needs to prepare sales, cost, and profit projections
to determine whether they satisfy company
objectives. If they do, the concept can move to the
development stage. As new information comes in,
the business analysis will undergo revision and
expansion

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19 Product Development
 Quality function deployment (QFD)
 Customer attributes
 Engineering attributes

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20 Prototype Testing

Alpha testing
Rank-order method

Paired-comparison
Beta testing method

Monadic-rating
Market testing method

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21 Consumer Goods Market Testing

Sales-wave Research

Simulated Test Marketing

Controlled Test Marketing

Test Markets

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22 Test Market Decisions
 How many test cities?
 Which cities?
 Length of test?
 What information to collect?
 What action to take?

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23 Timing of Market Entry

First entry

Parallel entry

Late entry

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24 Criteria for Choosing Rollout Markets

 Market potential
 Company’s local reputation
 Cost of filling pipeline
 Cost of communication media

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25 Target Market Prospects

Within the rollout markets, the company must

target initial distribution and promotion to the best
prospect groups. Ideally, they should be early
adopters, heavy users, and opinion leaders it can
reach at low cost. Few groups include all these, so
the company should rate prospects and target the
best group. The aim is to generate strong sales as
soon as possible to attract further prospects.

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26 Introductory Market Strategy

To coordinate the many tasks in launching a

new product, management can use network-
planning techniques such as critical path scheduling
(CPS), which develops a master chart showing the
simultaneous and sequential activities that must
take place. By estimating how much time each
activity takes, planners estimate completion time for
the entire project.

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27 What is Adoption?
Adoption is an individual’s decision to become
a regular user of a product and is followed by the
consumer-loyalty process. New-product marketers
typically aim at early adopters and use the theory of
innovation diffusion and consumer adoption to
identify them.

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28 Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

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29 Adopter Groups

Innovators

Early Adopters

Early Majority

Late Majority

Laggards

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30 Characteristics of an Innovation

Relative advantage

Compatibility

Complexity

Divisibility

Communicability

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31

Thank you and God bless us

all 

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