Launching a New ProductLaunching a New Product

Dr. Carol GwinDr. Carol Gwin

Baylor UniversityBaylor University

July 14, 2005July 14, 2005

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Handspring Treo Brand VideoWhat is involved developing a new product?

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What Separates New-Product Winners From What Separates New-Product Winners From Losers?Losers?

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Stages in the New-Product ProcessStages in the New-Product Process

SETTING STRATEGIC DIRECTIONS

Where are we now?Where are we now?– Internal (your company)Internal (your company)

Core CompetenciesCore CompetenciesOther strengthsOther strengthsWeaknessesWeaknesses

– External (outside of the company)External (outside of the company)Trends changing customer needs and wants Trends changing customer needs and wants (sociocultural, demographics, technology)(sociocultural, demographics, technology)Industry and competitive strengths and weaknessesIndustry and competitive strengths and weaknessesTechnological developmentsTechnological developmentsThe economyThe economyPolitical, legal and regulatory restrictions and Political, legal and regulatory restrictions and changeschanges

Where are the greatest opportunities?Where are the greatest opportunities?

1. Create a Sustainable 1. Create a Sustainable Competitive AdvantageCompetitive Advantage

Different from competition in a way Different from competition in a way that is meaningful to the customer.that is meaningful to the customer.– Product/service, image, priceProduct/service, image, price

Difficult to copy (sustainable).Difficult to copy (sustainable).

Profitable.Profitable.

Potential Sources for Potential Sources for Product/Service DifferentiationProduct/Service Differentiation

Patents

Brand equity

Exclusive supplier agreements

Exclusive distribution agreements

Product reliability & quality

Unique processes

Obtain lower prices from suppliers.

Create efficient operations.

Control overhead costs.

Move down the experience curve.

Achieve economies of scale.

Obtain lower prices from suppliers.

Create efficient operations.

Control overhead costs.

Move down the experience curve.

Achieve economies of scale.

Potential Sources for Cost Potential Sources for Cost Competitive AdvantageCompetitive Advantage

Identifying the Target MarketIdentifying the Target Market

Who is most likely to buy your product?Why is it important to precisely define the target market?– Efficiencies

Marketing - Focused on specific target.Operations – Focused on specific features/attributes.

– Price premiumGreater value to customer since deliver to specific target market’s needs.

Customer ValueCustomer Value

Costs Benefits

Consumer Segmentation VariablesConsumer Segmentation Variables

FIGURE 7.3

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Elements of the Marketing MixElements of the Marketing Mix

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Information is Key to Developing a Information is Key to Developing a Successful New ProductSuccessful New Product

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Growth of the Internet and E-CommerceGrowth of the Internet and E-Commerce

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Online Consumer Sales by Category: Online Consumer Sales by Category: 2001 and 20052001 and 2005

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Why Consumers Shop and Buy OnlineWhy Consumers Shop and Buy Online

Why Do Some Consumers Not Why Do Some Consumers Not Shop Online?Shop Online?

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Creating the Customer Experience OnlineCreating the Customer Experience Online

Country Selector Amazon.com: Online shopping for electronics, apparel, music, books, DVDs & more

Online Marketing ToolsOnline Marketing Tools

Search enginesSearch enginesOnline adsOnline adsViral marketingViral marketingAffiliation programsAffiliation programsCommunity/relationshipsCommunity/relationshipsInteractive sitesInteractive sites– Personalization, customization, gamesPersonalization, customization, games

Personalized e-mailPersonalized e-mail

What is the biggest barrier to What is the biggest barrier to creating a successful online creating a successful online

business?business?

ProfitabilityProfitability– Attracting consumers to your web site.Attracting consumers to your web site.– Getting consumers to buy (or Getting consumers to buy (or

advertisers).advertisers).– The infrastructure for product The infrastructure for product

availability, packing and shipping.availability, packing and shipping.– Keeping competitors from copying real-Keeping competitors from copying real-

time.time.– Price sensitivity.Price sensitivity.