19 Introducing New Market Offerings

19
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?
Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from 19-2
the United States edition of Marketing Management, 14e.
Chapter Questions
 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
Categories of New Products
New to the World
Additions
Improvements
Repositionings
Cost reductions
The Innovation of Chotukool
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
Table 19.1 Finding One Successful
Product
What is a Venture Team?
 A venture team is a cross-functional group
charged with developing a specific product or
business.
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
Figure 19.1 New-Product
Development Decision Process
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
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
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
Demand-First Innovation and
Growth (DIG) Framework
Demand Landscape
Opportunity Space
Strategic Blueprint
Idea Generation:
Creativity Techniques
 Attribute listing
 Forced relationships
 Morphological analysis
 Reverse assumption analysis
 New contexts
 Mind mapping
Lateral Mapping
 Gas stations + food
 Cafeteria + Internet
 Cereal + snacking
 Candy + toy
 Audio + portable
Table 19.2 Product Idea
Rating Device
Figure 19.2 Forces Fighting
New Ideas
Source: With permission of Jerold Panas, Young &

Partners Inc.
Figure 19.3 Product and
Brand Positioning
Concept Testing
 Communicability and believability
 Need level
 Gap level
 Perceived value
 Purchase intention
 User targets, purchase occasions,
purchasing frequency
Figure 19.4 Conjoint Analysis
Figure 19.5 Utility Functions
Based on Conjoint Analysis
Figure 19.6 Product Life-Cycle
Sales for Three Types of Products
Table 19.3 Projected Five-Year
Cash Flow Statement (in Rupees
Million)
Prototype Testing
 Alpha testing
 Beta testing
 Rank-order method
 Paired-comparison method
 Monadic-rating method
 Market testing
Consumer Goods Market Testing
 Sales-Wave Research
 Simulated Test Marketing
 Controlled Test Marketing
 Test Markets
Test Market Decisions
 How many test cities?
 Which cities?
 Length of test?
 What information to collect?
 What action to take?
Timing of Market Entry
 First entry
 Parallel entry
 Late entry
What is Adoption?
Adoption is an individual’s decision to

become a regular user of a product.
Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
Figure 19.7 Adopter
Categorization on the Basis of
Relative time of Adoption
Source: Tungsten, http://en.wikipedia.ord/wiki/Everett_Rogers. Based on Rogers, E. (1962) Diffusion

of Innovations. Free Press, London, NY, USA.
Characteristics of an Innovation
 Relative advantage
 Compatibility
 Complexity
 Divisibility
 Communicability
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
For Review
 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

19 Introducing New Market Offerings

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 Desired team leadership style

Source: With permission of Jerold Panas, Young &

Adoption is an individual’s decision to

Source: Tungsten, http://en.wikipedia.ord/wiki/Everett_Rogers. Based on Rogers, E. (1962) Diffusion

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