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Unformatted text preview: Product: New Product Development
BA 303 Week 10.1 Q of the Day Agenda: New Product Development Why New Products? NPD Process Organizing NPD Next Class & Study Tip Idea generation Idea screening Concept development & testing Marketing strategy development Business analysis Product development Test marketing Commercialization BA 303/Coupland Week 10.1/New Product Development 3 Why new products? New products are crucial for the health of the enterprise Rejuvenate _________ Tied to higher stock values and internal motivation for employees BA 303/Coupland Week 10.1/New Product Development 4 NPD process # of ideas/ projects time Having skill sets for one point in the process does not mean you're also good at the others.
BA 303/Coupland Week 10.1/New Product Development 5 1. Idea Generation The systematic search for new product ideas. Internal sources: External sources: _________________at all levels Customers, competitors, distributors, suppliers, outsourcing partners
Week 10.1/New Product Development 6 BA 303/Coupland 2. Idea Screening Screening process to reduce # of ideas by spotting good ones and dropping poor ones. Describe product, target market, and competition. Estimate market size, product price, development time and costs, manufacturing costs, and rate of return. Evaluate against a set of company criteria for new products. BA 303/Coupland Week 10.1/New Product Development 7 3a. Concept Development Concept Development Translate your product idea into a detailed concept stated in meaningful consumer terms (i.e., what will the consumer get out of this product?) e.g., A <descriptor of product> that provides <benefit/feelings/results> BA 303/Coupland Week 10.1/New Product Development 8 3b. Concept Testing Concept Testing Test concepts with a group of target consumers to find out level of appeal. In doing so, describe the product and elicit responses to the concept. BA 303/Coupland Week 10.1/New Product Development 9 Concept Testing: Sample Questions Do you understand the concept behind this product? Is this concept believable? What are the major benefits of this product? How does it compare with other similar products? What improvements might you suggest? What factors might affect your decision to buy this product? BA 303/Coupland Week 10.1/New Product Development 10 4. Marketing Strategy Development An initial marketing strategy is designed for the new product, consisting of:
1. Target market and initial objectives 2. Launch tactics Target market; planned product positioning; and goals for sales, market share, and profit for the first few years. Price, distribution, and marketing budget for the first year. Longrun sales and profit goals, marketing mix (4Ps) to be used. 3. Longterm objectives BA 303/Coupland Week 10.1/New Product Development 11 5. Business Analysis Does the idea make business sense? Involves a review of the sales, costs, and profit projections to assess fit with company objectives. Assess risk under various scenarios. If results are positive, project moves to the product development phase. BA 303/Coupland Week 10.1/New Product Development 12 6. Product Development
Develop from concept into actual product ("_______"). Investment increases considerably: moving from idea into realm of reality. Product testing often happens alongside development. BA 303/Coupland Week 10.1/New Product Development 13 7. Test Marketing
Product & marketing program introduced in a limited setting. Can be expensive and time consuming, and shows your plans to competitors. After test marketing the "Go Active" meal (an adult happy meal) in 150 markets in Indiana, McDonald's decided to sell it across the U.S.
BA 303/Coupland Week 10.1/New Product Development 14 New product failures
Only ____% of new consumer products are still on the market and profitable after 2 years. Less than ___% are considered "truly successful." Failure is due to: _____________________________________ ___________________________ BA 303/Coupland Weeks 10a & 10b/Product NPD & PLC Week 10.1/New Product Development 15 New Product Development
1. "Really new products" Original products __% 1. Incremental improvement __% Source: Marketing News, Feb. 1, 2007
BA 303/Coupland Weeks 10a & 10b/Product NPD & PLC Week 10.1/New Product Development 16 8. Commercialization
"LAUNCH" Must decide when and where to initially introduce the product Must develop a ____________ plan Where to go next? BA 303/Coupland Week 10.1/New Product Development 17 Organizing NPD ___________ Approach Each stage completed before moving to next phase of the project ___________ Approach Crossfunctional teams work through overlapping steps to save time and increase effectiveness
Week 10.1/New Product Development 18 BA 303/Coupland Next Class: Product LifeCycle (PLC) Read through Ch. 8 Study Tip: BA 303/Coupland Week 10.1/New Product Development 19 ...
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This note was uploaded on 09/16/2009 for the course B A 301 taught by Professor Gray,garyjosephwoolridge,joseph during the Fall '07 term at Pennsylvania State University, University Park.
- Fall '07