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20

Introducing New

Market Offerings

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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 oversee new-productdevelopment?

What are the main stages in developing new

products and services?

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Chapter Questions

What is the best way to manage the new-product development process?

What factors affect the rate of diffusion and

consumer adoption of newly launchedproducts and services?

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Categories of New Products

New to the World

 Additions

Improvements

Repositionings

Cost reductions

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The Innovation of Wii

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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 201. Finding One

Successful Product

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What is a Venture Team?

 A venture team is a cross-functional group

charged with developing a specific product or

business.

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Criteria for Staffing Venture Teams

Desired team leadership style

Desired level of leader expertise

Team member skills and expertise

Level of interest in concept

Potential for personal reward

Diversity of team members

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Figure 20.1 New-Product

Development Decision Process

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Ways to Find Great New Ideas

Run informal sessions with customers

 Allow time off for technical people to putter on

pet projects

Make customer brainstorming a part of planttours

Survey your customers

Undertake “fly on the wall” research tocustomers

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More Ways to Find Great Ideas

Use iterative rounds with customers

Set up a keyword search to scan trade

publications

Treat trade shows as intelligence missions

Have employees visit supplier labs

Set up an idea vault

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Drawing Ideas from Customers

Observe customers using product

 Ask customers about problems with products

 Ask customers about their dream products

Use a customer advisory board or a brand

community of enthusiasts to discuss product

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Demand-First Innovation and

Growth (DIG) Framework

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Demand Landscape

Opportunity Space

Strategic Blueprint

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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 20.2 Product Idea

Rating Device

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Figure 20.2 Forces Fighting

New Ideas

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Figure 20.3 Product and

Brand Positioning

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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 20.4 Conjoint Analysis

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Figure 20.5 Utility Functions

Based on Conjoint Analysis

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Figure 20.6 Product Life-Cycle

Sales for Three Types of Products

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Table 20.3 Projected Five-Year

Cash Flow Statement

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Prototype Testing

 Alpha testing

Beta testing

Rank-order method

Paired-comparison method

Monadic-rating method

Market testing

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Consumer Goods Market Testing

Sales-Wave Research

Simulated Test Marketing

Controlled Test Marketing

Test Markets

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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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Timing of Market Entry

First entry

Parallel entry

Late entry

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What is Adoption?

Adoption is an individual’s decision to

become a regular user of a product.

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Stages in the Adoption Process

 Awareness

Interest

Evaluation

Trial

 Adoption

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Figure 20.7 Adopter

Categorization on the Basis of

Relative time of Adoption

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Characteristics of an Innovation

Relative advantage

Compatibility

Complexity

Divisibility

Communicability

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For Review

What challenges does a company face in

developing new products and services?

What organizational structures and processes

do managers use to oversee new-productdevelopment?

What are the main stages in developing new

products and services?

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For Review

What is the best way to manage the new-

product development process?

What factors affect the rate of diffusion and

consumer adoption of newly launchedproducts and services?

Copyright © 2011 Pearson Education Inc Publishing as Prentice Hall 20-34