Introducing New Market Offerings

aka NPD

20

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Chapter Questions

• What challenges does a company face in developing new products and services?

• What organizational structures and processes do managers use to manage new-product development?

• What are the main stages in developing new products and services?

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Chapter Questions (cont.)

• 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 products and services?

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Categories of New Products

New-to-the-world

Cost reductions

New product lines

Additions

Improvements

Repositionings

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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

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Table 20.4 Finding One Successful New Product

The New Product Development Decision Process

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Idea Generation: Creativity Techniques

• Attribute listing• Forced relationships• Morphological

analysis• Reverse assumption

analysis• New contexts• Mind mapping

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Lateral Mapping

• Gas stations + food• Cafeteria + Internet• Cereal + snacking• Candy + toy• Audio + portable

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Table 20.5 Product-Idea Rating Device

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Concepts in Concept Development

• Product idea

• Product concept

• Category concept

• Brand concept

• Concept testing

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Concept Testing

• Communicability and believability

• Need level

• Gap level

• Perceived value

• Purchase intention

• User targets, purchase occasions, purchasing frequency

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Figure 20.6 Utility Functions Based on Conjoint Analysis

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Marketing Strategy

• Target market’s size, structure, and behavior

• Planned price, distribution, and promotion for year one

• Long-run sales and profit goals and marketing-mix strategy over time

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Figure 20.7 Product Life Cycle Sales for Three Product Types

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Test Market Decisions

• How many test cities?

• Which cities?

• Length of test?

• What information to collect?

• What action to take?

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Criteria for Choosing Rollout Markets

• Market potential

• Company’s local reputation

• Cost of filling pipeline

• Cost of communication media

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Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

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Figure 20.6 Adopter Categorisation

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Characteristics of an Innovation

• Relative advantage• Compatibility• Complexity• Divisibility/Practicalities• Communicability