mktg_ch10_developing and managing products

8/9/2019 MKTG_Ch10_Developing and Managing Products

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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved 1

MKTG

Designed by

!my #$%uire, &-boo's, Ltd

Prepared by

(eborah &a'er, Te)as Christian *niversity

Lamb, Hair, McDaniel2007-2008

1CHAPTER DevelopingandManagingProducts


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Learning Outcomes

+)p"ain the importan$e of deve"opingne produ$ts and des$ribe the si)$ategories of ne produ$ts

+)p"ain the steps in the ne-produ$tdeve"opment pro$ess

(is$uss g"oba" issues in ne-produ$tdeve"opment

LO1

LO2

LO3


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved

Learning Outcomes

+)p"ain the diffusion pro$ess throughhi$h ne produ$ts are adopted

+)p"ain the $on$ept of produ$t "ife$y$"es

LO4

LO5


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved .

+)p"ain the importan$e

of deve"oping neprodu$ts and des$ribe

the si) $ategories of

ne produ$ts

The Importance of New ProductsThe Importance of New ProductsLO1


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved /

LO1

New Product

! produ$t ne to theor"d, the mar'et, the

produ$er, the se""er, or

some $ombination of

these

e rodu$t


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LO1

Categories of New Products

e-to-the-Wor"d

e-to-the-Wor"d

e rodu$t Lines

e rodu$t Lines

rodu$t Line !dditions

rodu$t Line !dditions

3mprovements or 4evisions

3mprovements or 4evisions

4epositioned rodu$ts

4epositioned rodu$ts

Loer-ri$ed rodu$ts

Loer-ri$ed rodu$ts


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LO1

B

eyond

the

B

ook

New Product for Starbucks

SOURCE: Janet Adamy, Lights, Camera, Action at Starbucks, a!! Street Journa!, A"ri! ##$#%''(, A#)

Starbu$'s re$ent"y mar'eted

the fi"mAkeelah and the Bee.

3t says the fi"m is a natura"

e)tension of the Starbu$'s

e)perien$e

Criti$s say the pervasive $hain

is overe)tending its e"$ome


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REVIEW LEARNING OUTCOMELO1

Developing New Products


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+)p"ain the steps inthe ne-produ$t

deve"opment pro$ess

The New ProductThe New Product

Development ProcessDevelopment ProcessLO2


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The New-Product

Development Process

LO2

Long-term $ommitmentLong-term $ommitment

Company-spe$ifi$ approa$hCompany-spe$ifi$ approa$h

Capita"i7e on e)perien$eCapita"i7e on e)perien$e

+stab"ish an environment+stab"ish an environment

e rodu$t Su$$ess a$tors


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New-Product

Development Process

LO2

e-rodu$t Strategye-rodu$t Strategy

3dea %eneration3dea %eneration

3dea S$reening3dea S$reening

&usiness !na"ysis&usiness !na"ysis

(eve"opment(eve"opment

Test #ar'etingTest #ar'eting

Commer$ia"i7ationCommer$ia"i7ation

e rodu$te rodu$t


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LO2

Idea Generation

Customers

+mp"oyees

(istributors

Competitors

9endors

4 : (

Consu"tants

Sour$es ofSour$es ofe-rodu$te-rodu$t

3deas3deas

;n"ine

http


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LO2

Tips for New Product

Development

(isperse 4 : ( around the g"obe

>eep teams sma"" and empoer emp"oyees

"atten hierar$hy

+n$ourage generation of $ra7y ne ideas

We"$ome mista'es


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LO2

Brainstorming

&rainstorming The pro$ess of getting a

group to thin' of un"imitedays to vary a produ$t or

so"ve a prob"em


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LO2

Idea Screening

3dea S$reening The first fi"ter in the produ$t

deve"opment pro$ess, hi$he"iminates ideas that are

in$onsistent ith the

organi7ation?s ne-produ$t

strategy or are inappropriate

for some other reason


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LO2

Concept Testing

Con$ept Testing ! test to eva"uate a

ne-produ$t idea, usua""ybefore any prototype has

been $reated


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LO2

Business Analsis

ConsiderationsConsiderationsinin

&usiness&usiness!na"ysis Stage!na"ysis Stage

ConsiderationsConsiderationsinin&usiness&usiness

!na"ysis Stage!na"ysis Stage

(emand

Cost

Sa"es

rofitabi"ity


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LO2

Development

Creation of prototype

#ar'eting strategy

a$'aging, branding,

"abe"ing

romotion, pri$e, and

distribution strategy

#anufa$turing feasibi"ity

ina" government approva"s if needed


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LO2

Simultaneous Product

Development

Simu"taneous

rodu$t

(eve"opment

! ne team-oriented

approa$h to ne-produ$t

deve"opment here a""re"evant fun$tiona" areas

and outside supp"iers

parti$ipate in the

deve"opment pro$ess


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LO2

Test !ar"eting

Test

#ar'eting

;n"ine

http


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LO2

Alternatives to Test

!ar"eting

Sing"e-sour$e resear$h using

supermar'et s$anner data

Simu"ated @"aboratoryA mar'et

testing

;n"ine test mar'eting

;n"ine

http


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LO2

Commerciali#ation

rodu$tionrodu$tion

3nventory &ui"dup3nventory &ui"dup

(istribution Shipments(istribution Shipments

Sa"es TrainingSa"es Training

Trade !nnoun$ementsTrade !nnoun$ements

Customer !dvertisingCustomer !dvertising


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New-Product Development Process


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved 2.

Beyond

the

Book

Why Some Products Succeed and Others Fail

*O+E: Su""!ementa! content not in book)

+)p"ain hy someprodu$ts su$$eed

and others fai"


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved 2/

Beyond

the

Book

Why New Products Fail


o dis$ernib"e benefits

oor mat$h beteen features

and $ustomer desires

;verestimation of mar'et si7e 3n$orre$t positioning

ri$e too high or too "o

3nadeBuate distribution

oor promotion

3nferior produ$t


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Beyond

the

Book

Success Factors


Factors in SuccessfulFactors in SuccessfulNew ProductsNew Products

#at$h beteen produ$t and mar'et needs

(ifferent from substitute produ$ts

&enefit to "arge number of peop"e


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Beyond

the

Book

Success Factors


Listening to $ustomers

rodu$ing the best

produ$t

9ision of future mar'et

Strong "eadership

Commitment to ne-

produ$t deve"opment

roe$t-based teamapproa$h

%etting every aspe$t right


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Beyond

the

Book

Why Products Succeed and Others Fail



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(is$uss g"oba" issuesin ne-produ$t

deve"opment

Glo$al Issues inGlo$al Issues in

New-Product DevelopmentNew-Product DevelopmentLO3


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LO3

Glo$al !ar"eting %uestions

(eve"op produ$t forpotentia" or"didedistribution

&ui"d in uniBue

mar'et reBuirements

(esign produ$ts to meetregu"ations and 'ey mar'etreBuirements


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Glo$al Issues in New-ProductDevelopment

Sing"e produ$t or"dideSing"e produ$t or"dide

#odifi$ation of produ$ts#odifi$ation of produ$ts

#u"tip"e produ$ts inmu"tip"e $ountries

#u"tip"e produ$ts inmu"tip"e $ountries


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+)p"ain the diffusionpro$ess through

hi$h ne produ$ts

are adopted

The Spread of New ProductsThe Spread of New ProductsLO4


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Diffusion

LO4

The pro$ess by hi$h theadoption of an innovation

spreads

(iffusion


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Categories of Adopters

LO4LaggardsLaggards

Late #aorityLate #aority

+ar"y #aority+ar"y #aority

+ar"y !dopters+ar"y !dopters

3nnovators3nnovators


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Product Characteristics and

the &ate of Adoption

LO4

Tria"abi"ityTria"abi"ity

;bservabi"ity;bservabi"ity

4e"ative !dvantage4e"ative !dvantage

Compatibi"ityCompatibi"ity

Comp"e)ityComp"e)ity

;n"ine

http


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Sales of New Audio Products

LO4


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!ar"eting Implications

of the Adoption Process

LO4

(ire$t from#ar'eter

(ire$t from#ar'eter

Word of #outhWord of #outh

Communi$ation!ids the

(iffusion ro$ess

Communi$ation!ids the

(iffusion ro$ess


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Diffusion Process for New Products


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+)p"ain the $on$ept

of produ$t "ife $y$"es

Product 'ife CclesProduct 'ife CclesLO5


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Product 'ife Ccle

LO5

rodu$t

Life Cy$"e! $on$ept that provides a

ay to tra$e the stages of

a produ$t?s a$$eptan$e,

from its introdu$tion

@birthA to its de$"ine

@deathA


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Product 'ife Ccle

LO5Time

(o""a

rs

Profits

SalesSales

3ntrodu$tory3ntrodu$toryStageStage

%roth%rothStageStage

#aturity#aturityStageStage

(e$"ine(e$"ineStageStage

0


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Product 'ife Ccles for

Stles( )ashions( and )ads

LO5


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*+S+ Sales of Televisions

LO5


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Chapter 10 Copyright 2008 by South-Western, a division of Thomson Learning !"" rights reserved ..

Introductor Stage

LO5

Digh fai"ure rates

Litt"e $ompetition

reBuent produ$t modifi$ation

Limited distribution

Digh mar'eting and produ$tion $osts

egative profits ith s"o sa"es in$reases

romotion fo$uses on aareness and

information Communi$ation $ha""enge is to stimu"ate

primary demand


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Introductor Stage in ,urope

LO5


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Growth Stage

LO5

3n$reasing rate of sa"es

+ntran$e of $ompetitors

#ar'et $onso"idation

3nitia" hea"thy profits

!ggressive advertising of the

differen$es beteen brandsWider distribution


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!aturit Stage

LO5

Sa"es in$rease at a de$reasing rate

Saturated mar'ets

!nnua" mode"s appear

Lengthened produ$t "ines

Servi$e and repair assume important ro"es

Deavy promotions to $onsumers and dea"ers

#argina" $ompetitors drop out i$he mar'eters emerge


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Decline Stage

LO5

Long-run drop in sa"es

Large inventories of

unso"d items

+"imination of a"" nonessentia"

mar'eting e)penses

E;rgani7ed abandonmentF


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Diffusion Process and P'C Curve

LO5

3nnovators

+ar"y adopters

+ar"y maorityLate maority

Laggards

rodu$trodu$t

"ife $y$"e"ife $y$"e$urve$urve

3ntrodu$tion %roth #aturity (e$"ine

Sa"es

(iffusion(iffusion$urve$urve


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Product 'ife Ccles3T4;(*CT3; %4;WTD #!T*43TG (+CL3+

rodu$tStrategy

(istribution

Strategy

romotion

Strategy

ri$ingStrategy

Limited mode"s

reBuent

$hanges

#ore mode"s

reBuent

$hanges

Large number

of mode"s

+"iminate

unprofitab"e

mode"s

Limited

Who"esa"e=

retai" distributors

+)panded

dea"ers Long-

term re"ations

+)tensive

#argins drop

She"f spa$e

hase out

unprofitab"e

out"ets

!areness

Stimu"ate

demand Samp"ing

!ggressive ads

Stimu"ate

demand

!dvertise

romote

heavi"y

hase out

promotion

Digh to re$oup

deve"opment

$osts

a"" as resu"t of

$ompetition :

effi$ient

produ$tion

ri$es fa""

@usua""yA

ri$es

stabi"i7e at

"o "eve"

Sa"es

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