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1、Copyright 2003 Prentice-Hall, Inc.Chapter 12Developing New Market OfferingsbyPowerPoint byPowerPoint byMilton M. PressleyMilton M. PressleyUniversity of New OrleansUniversity of New Orleans1Copyright 2003 Prentice-Hall, Inc. Who should ultimately design the product? The customer, of course.Kotler on
2、 Marketing2Copyright 2003 Prentice-Hall, Inc.Chapter Objectives In this chapter, we focus on the following questions:What challenges does a company face in What challenges does a company face in developing new products?developing new products?What organizational structures are used to What organizat
3、ional structures are used to manage new-product development?manage new-product development?What are the main stages in developing new What are the main stages in developing new products, and how can they be managed products, and how can they be managed better?better?What factors affect the rate of d
4、iffusion and What factors affect the rate of diffusion and consumer adoption of newly launched consumer adoption of newly launched products?products?3Copyright 2003 Prentice-Hall, Inc.Developing New Market Offerings Six categories of new products1.New-to-the-world productsNew-to-the-world products2.
5、New product linesNew product lines3.Additions to existing product linesAdditions to existing product lines4.Improvements and revisions of existing Improvements and revisions of existing productsproducts5.RepositioningRepositioning6.Cost reductions4Copyright 2003 Prentice-Hall, Inc.Challenges in New-
6、Product Development Incremental innovationIncremental innovationDisruptive technologiesDisruptive technologiesWhy do new products fail?A high-level executive pushes a favorite idea A high-level executive pushes a favorite idea through in spite of negative research through in spite of negative resear
7、ch findings.findings.The idea is good, but the market size is The idea is good, but the market size is overestimated.overestimated.The product is not well designed.The product is not well designed.5Copyright 2003 Prentice-Hall, Inc.Challenges in New-Product Development The product is incorrectly pos
8、itioned The product is incorrectly positioned in the market, not advertised in the market, not advertised effectively, or overpriced.effectively, or overpriced.The product fails to gain sufficient The product fails to gain sufficient distribution coverage or support.distribution coverage or support.
9、Development costs are higher than Development costs are higher than expected.expected.Competitors fight back harder than Competitors fight back harder than expected.expected.6Copyright 2003 Prentice-Hall, Inc.Challenges in New-Product Development Factors that tend to hinder new-product developmentSh
10、ortage of important ideas in certain areasShortage of important ideas in certain areasFragmented marketsFragmented marketsSocial and governmental constraintsSocial and governmental constraintsCost of developmentCost of developmentCapital shortagesCapital shortagesFaster required development timeFast
11、er required development timeShorter product life cyclesShorter product life cycles7Copyright 2003 Prentice-Hall, Inc.Organizational Arrangements New-product deployment requires specific criteria one company established the following acceptance criteriaThe product can be introduced within five yearsT
12、he product can be introduced within five yearsThe product has a market potential of at least The product has a market potential of at least $50 million and a 15 percent growth rate.$50 million and a 15 percent growth rate.The product would provide at least 30 percent The product would provide at lea
13、st 30 percent return on sales and 40 percent on investment.return on sales and 40 percent on investment.The product would achieve technical or market The product would achieve technical or market leadership.leadership.8Copyright 2003 Prentice-Hall, Inc.Budgeting For New Product Development3Ms approa
14、ch:3Ms approach: 15% rule15% rule Each promising idea gets an Each promising idea gets an “executive champion”“executive champion” Expect some failuresExpect some failures Golden Step awards handed out Golden Step awards handed out each yeareach yearOrganizational Arrangements 9Copyright 2003 Prenti
15、ce-Hall, Inc.3M online: The 3M Innovation Network3M online: The 3M Innovation Network10Copyright 2003 Prentice-Hall, Inc.Table 12.1 Finding One Successful New Product (Starting with 64 New Ideas)StageStageNumber Number of Ideasof IdeasPass Pass RatioRatioCost per Cost per Product IdeaProduct IdeaTot
16、al CostTotal Cost1. Idea screening1. Idea screening64641:41:4$ 1,000$ 1,000$ 64,000$ 64,0002. Concept testing2. Concept testing16161:21:220,00020,000320,000320,0003. Product 3. Product developmentdevelopment8 81:21:2200,000200,0001,600,0001,600,0004. Test marketing4. Test marketing4 41:21:2500,00050
17、0,0002,000,0002,000,0005. National launch5. National launch2 21:21:25,000,0005,000,00010,000,00010,000,000$5,721,000$5,721,000$13,984,000$13,984,00011Copyright 2003 Prentice-Hall, Inc.Organizational ArrangementsOrganizing New-Product DevelopmentProduct managersProduct managersNew-product managersNew
18、-product managersHigh-level management committeeHigh-level management committeeNew product departmentNew product departmentVenture teamsVenture teams12Copyright 2003 Prentice-Hall, Inc.Stage-gate systemStage-gate system Gatekeepers make one of Gatekeepers make one of four decisions:four decisions: G
19、oGo KillKill HoldHold RecycleRecycleOrganizational Arrangements13Copyright 2003 Prentice-Hall, Inc.Idea GenerationInteracting with OthersInteracting with Others Sales representativesSales representatives IntermediariesIntermediaries Product championProduct championManaging the Development Process: I
20、deas14Copyright 2003 Prentice-Hall, Inc.Techniques for stimulating creativity Techniques for stimulating creativity in individuals and groupsin individuals and groups Attribute listingAttribute listing Forced relationshipsForced relationships Morphological analysisMorphological analysis Reverse assu
21、mption analysisReverse assumption analysis New contextsNew contexts Mind-mappingMind-mappingManaging the Development Process: Ideas15Copyright 2003 Prentice-Hall, Inc.Idea ScreeningIdea managerIdea managerIdea committeeIdea committeeTwo types of errors in Two types of errors in screening ideasscreen
22、ing ideas DROP-errorDROP-error GO-errorGO-errorManaging the Development Process: Ideas16Copyright 2003 Prentice-Hall, Inc.Some of the most notable “drop-errors” have come from the most recognizable names in American business. Xerox saw the potential of the copy machine, IBM and Eastman Kodak did not
23、. IBM thought the personal computer market would be miniscule. Can you think of any “drop-errors” that the company didnt survive?17Copyright 2003 Prentice-Hall, Inc.Table 12.2 Product-Idea Rating DeviceRelative Relative WeightWeightProduct Product ScoreScoreProduct Product RatingRatingProduct Succes
24、s RequirementsProduct Success Requirements(a)(a)(b)(b)(c = a x b)(c = a x b)Unique or superior productUnique or superior product.40.40.8.8.32.32High performance to cost ratioHigh performance to cost ratio.30.30.6.6.18.18High marketing dollar supportHigh marketing dollar support.20.20.7.7.14.14Lack o
25、f strong competitionLack of strong competition.10.10.5.5.05.05TotalTotal1.001.00.69.69 Rating scale: .00-.30 poor; .31-.60 fair; .61-.80 good. Minimum acceptance rate: .61 Rating scale: .00-.30 poor; .31-.60 fair; .61-.80 good. Minimum acceptance rate: .6118Copyright 2003 Prentice-Hall, Inc.Managing
26、 the Development Process: Concept to StrategyConcept Development and Testing Product ideaProduct idea Product conceptProduct conceptConcept developmentConcept development Category conceptCategory concept Productpositioning mapProductpositioning map Brand conceptBrand concept19Copyright 2003 Prentice
27、-Hall, Inc.Figure 12.3: Product and Brand Positioning20Copyright 2003 Prentice-Hall, Inc.Sometimes a new product is developed, like the felt-tip pen and the “walkman” style personal music device. Consumers werent clamoring for either of these products before they came to market. Most people hadnt ev
28、en conceived of such an item. Careful planning developed markets for these new lines. Can you think of more recent examples?21Copyright 2003 Prentice-Hall, Inc.Managing the Development Process: Concept to StrategyConcept TestingConcept Testing Rapid prototypingRapid prototyping Virtual realityVirtua
29、l reality Customer-driven engineeringCustomer-driven engineeringQuestions to measure product dimensionsQuestions to measure product dimensions Communicability and believabilityCommunicability and believability Need levelNeed level Gap levelGap level Need-gap scoreNeed-gap score22Copyright 2003 Prent
30、ice-Hall, Inc.Managing the Development Process: Concept to Strategy Perceived valuePerceived value Purchase intentionPurchase intention User targets, purchase occasions, purchasing User targets, purchase occasions, purchasing frequencyfrequencyConjoint AnalysisConjoint Analysis Example: five design
31、elementsExample: five design elements Three package designsThree package designs Three brand namesThree brand names Three pricesThree prices Possible Good Housekeeping sealPossible Good Housekeeping seal Possible money-back guaranteePossible money-back guarantee23Copyright 2003 Prentice-Hall, Inc.Ma
32、naging the Development Process: Concept to StrategyMarketing StrategyBusiness AnalysisEstimating Total SalesEstimating Total Sales24Copyright 2003 Prentice-Hall, Inc.Managing the Development Process: Concept to Strategy Survival-age distributionSurvival-age distributionEstimating Cost and ProfitsEst
33、imating Cost and Profits25Copyright 2003 Prentice-Hall, Inc.Table 12.3 Projected Five-Year-Cash-Flow Statement (in thousands of dollars)Year 0Year 0Year 1Year 1Year 2Year 2Year 3Year 31. Sales revenue1. Sales revenue$ 0$ 0$11,889$11,889$15,381$15,381$19,654$19,6542. Cost of goods sold2. Cost of good
34、s sold0 03,9813,9815,1505,1506,5816,5813. Gross margin3. Gross margin0 07,9087,90810,23110,23113,07313,0734. Development costs4. Development costs-3,500-3,5000 00 00 05. Marketing costs5. Marketing costs0 08,0008,0006,4606,4608,2558,2556. Allocated overhead6. Allocated overhead0 01,1891,1891,5381,53
35、81,9651,965See text for complete table26Copyright 2003 Prentice-Hall, Inc.Managing the Development Process: Concept to Strategy Break-even analysisBreak-even analysis Risk analysisRisk analysis27Copyright 2003 Prentice-Hall, Inc.Managing The Development Process: Development to Commercialization Prod
36、uct DevelopmentQuality Function Deployment (QFD)Quality Function Deployment (QFD)Customer attributes (CAs)Customer attributes (CAs)Engineering Engineering attributes (EAs)attributes (EAs)Lands End Lands End Japan Web siteJapan Web site28Copyright 2003 Prentice-Hall, Inc. Managing The Development Pro
37、cess: Development to CommercializationCustomer testsCustomer testsAlpha testingAlpha testingBeta testingBeta testingConsumer preference measuresConsumer preference measures Rank-orderRank-order Paired-comparisonPaired-comparison Monadic-ratingMonadic-rating29Copyright 2003 Prentice-Hall, Inc. Managi
38、ng The Development Process: Development to CommercializationMarket TestingConsumer-Goods Market TestingConsumer-Goods Market Testing Seeks to estimate four variablesSeeks to estimate four variables TrialTrial First repeatFirst repeat AdoptionAdoption Purchase frequencyPurchase frequency Sales wave r
39、esearchSales wave research30Copyright 2003 Prentice-Hall, Inc. Managing The Development Process: Development to Commercialization Simulated Test MarketingSimulated Test Marketing Controlled Test MarketingControlled Test Marketing Test MarketsTest Markets How many test cities?How many test cities? Wh
40、ich cities?Which cities? Length of test?Length of test? What information?What information? What action to take?What action to take?Business-Goods Market TestingBusiness-Goods Market Testing31Copyright 2003 Prentice-Hall, Inc.Managing The Development Process: Development to Commercialization Philips
41、Pronto Web sitePhilips Pronto Web site CommercializationWhen (Timing)When (Timing)1. 1. First entry First entry2. 2. Parallel entry Parallel entry3. 3. Late entry Late entryWhere (Geographic Where (Geographic Strategy)Strategy)32Copyright 2003 Prentice-Hall, Inc.To Whom (Target-Market Prospects)To W
42、hom (Target-Market Prospects)How (Introductory Market Strategy)How (Introductory Market Strategy) Critical path scheduling (CPS)Critical path scheduling (CPS)Managing The Development Process: Development to Commercialization The iMac, launched with The iMac, launched with a dramatic countdown a dram
43、atic countdown campaigncampaign 33Copyright 2003 Prentice-Hall, Inc.The Consumer-Adoption ProcessAdoptionAdoption Consumer-adoption processConsumer-adoption process Consumer-loyalty processConsumer-loyalty process Mass-market approachMass-market approach Heavy-usage target marketingHeavy-usage targe
44、t marketingStages in the Adoption Process InnovationInnovation Innovation diffusion processInnovation diffusion process34Copyright 2003 Prentice-Hall, Inc.The Consumer-Adoption ProcessAdopters of new products move Adopters of new products move through five stagesthrough five stages AwarenessAwarenes
45、s InterestInterest EvaluationEvaluation TrialTrial AdoptionAdoptionFactors Influencing the Adoption ProcessReadiness to Try New Products and Personal Readiness to Try New Products and Personal InfluenceInfluence35Copyright 2003 Prentice-Hall, Inc.Figure 12.7: Adopter Categorization on the Basis of R
46、elative Time of Adoption of Innovation36Copyright 2003 Prentice-Hall, Inc.The Consumer-Adoption Process Personal influencePersonal influenceCharacteristics of the InnovationCharacteristics of the Innovation Relative advantageRelative advantage CompatibilityCompatibility ComplexityComplexity DivisibilityDivisibility CommunicabilityCommunicabilityOrganizations Readiness to Adopt Organizations Readiness to Adopt InnovationsInnovations37
