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Chapter 9

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8 views15 pages

Chapter 9

Uploaded by

Aleena Nawaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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New Product

Development and Product


Life-Cycle Strategies
Chapter 9
New-product development

• The development of original products, product


improvements, product modifications, and new brands
through the firm’s own product development efforts
New Product Development Process

• Idea generation. • Business analysis.

• Idea screening. • Product development.

• Concept development and • Test marketing.


testing. • Commercialization.
• Marketing strategy
development.
Idea Generation

• Internal Idea sources.


• R&D, Intrapreneurial processes.

• External Idea sources.


• Suppliers & Distributors, Competitors, Customers.

• Crowdsourcing.
Idea Screening
• Screening new-product ideas to spot good ideas and
drop poor ones as soon as possible.

• R-W-W (Real-Win-Worth it) framework.


Concept development and testing
• A detailed version of the new-product idea stated in meaningful consumer terms.

• Concept 1: An affordably priced midsize car designed as a second family car to be used around

town for running errands and visiting friends.

• Concept 2: A mid-priced sporty compact appealing to young singles and couples.

• Concept 3: A “green” car appealing to environmentally conscious people who want practical, low-

polluting transportation.

• Concept 4: A high-end midsize utility vehicle appealing to those who love the space SUVs provide

but lament the poor gas mileage.


Concept testing
• Testing new-product concepts with a group of target consumers
to find out if the concepts have strong consumer appeal.
Marketing Strategy Development

• Designing an initial marketing strategy for a new


product based on the product concept.

• Target Market.

• Planned Value Proposition.

• Sales, market share and profit goals.


Business Analysis

• A review of the sales, costs, and profit projections for a


new product to find out whether these factors satisfy
the company’s objectives.
Product Development

• Developing the product concept into a physical product


to ensure that the product idea can be turned into a
workable market offering.

• Minimum viable product.


Test Marketing

• The stage of new-product development in which the


product and its proposed marketing program are tested
in realistic market settings.
Commercialization
• Introducing a new product into the market.

• When & Where to launch.


Product life-cycle strategies
• The course of a product’s sales and profits over its lifetime. It involves five distinct stages: product
development, introduction, growth, maturity, and decline.

1. Product development begins when the company finds and develops a new-product idea. During product
development, sales are zero, and the company’s investment costs mount.

2. Introduction is a period of slow sales growth as the product is introduced in the market. Profits are
nonexistent in this stage because of the heavy expenses of product introduction.

3. Growth is a period of rapid market acceptance and increasing profits.

4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most
potential buyers. Profits level off or decline because of increased marketing outlays to defend the product
against competition.

5. Decline is the period when sales fall off and profits drop.
Product life-cycle strategies
Cont’d
• Product class. • Style.
• (gasoline-powered • A basic and distinctive mode of
automobiles) expression.
• Product form. • Fashion.
• (SUVs) • A currently accepted or popular
style in a given field.
• Brand.
• (the Ford Escape) • Fad.
• A temporary period of unusually
high sales driven by consumer
enthusiasm and immediate
product or brand popularity.

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