armstrong08_basic

armstrong08_basic - N ew-Pr oduct D evel opment and Pr...

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Unformatted text preview: N ew-Pr oduct D evel opment and Pr oduct L i fe-Cycl e Str ategi es Chapt er 8 Road M ap: Pr eviewing t he Concept s Explain • E xplain how companies find and develop new-pr oduct ideas. n ew-pr • L ist and define t he st eps in t he newpr oduct development pr ocess. • Descr ibe t he st ages of t he pr oduct life cycle. Descr • D escr ibe how mar ket ing st r at egies change dur ing t he pr oduct ’s life cycle. dur 8-2 New-Pr oduct Development St r at egy • St r at egies for Obt aining NewPr oduct I deas: A cquisit ion of companies, Acquisit pat ient s, licenses pat Or iginal pr oduct s, impr ovement s, Or modificat ions m odificat 8-3 New-Pr oduct Failur es • • • Only 10% of new pr oduct s st ill on t he Only mar ket and pr ofit able aft er 3 year s. m ar F ailur e r at e for indust r ial pr oduct s as Failur high as 30%. h igh Why? Over est imat ion of mar ket size Design pr oblems I ncor r ect ly posit ioned, pr iced, or adver t ised Pushed despit e poor mar ket ing r esear ch Pushed findings f indings Development cost s Compet it ion 8-4 M ajor St ages in NewPr oduct Development • • • • • • • • I dea gener at ion I dea scr eening Concept development and t est ing M ar ket ing st r at egy development Business analysis Pr oduct development Test mar ket ing Commer cializat ion 8-5 I dea Gener at ion • • • • • Company employees Cust omer s Compet it or s Dist r ibut or s Supplier s Supplier 8-6 I dea Scr eening • • Pr ocess t o spot good ideas and dr op Pr poor ones. poor D evelop syst em t o est imat e: Develop m ar ket size, pr oduct pr ice, development t ime and cost s, m anufact ur ing cost s, and r at e of r et ur n. E valuat e t hese findings against set Evaluat of company cr it er ia for new pr oduct s. pr 8-7 • Concept Development and T est ing • • • Pr oduct I dea: iidea for a possible dea pr oduct t hat t he company can see it self offer ing. it Pr oduct Concept : det ailed ver sion det of t he idea st at ed in meaningful consumer t er ms. consumer Pr oduct I mage: t he way consumer s per ceive an act ual or pot ent ial pr oduct . pr 8-8 M ar ket ing St r at egy D evelopment • Par t One Descr ibes: T he t ar get mar ket , planned pr oduct The posit ions, sales, mar ket shar e, and pr ofit goals goals • Par t Two Out lines t he Fir st Year ’s: Pr oduct ’s planned pr ice, dist r ibut ion, and Pr mar ket ing budget m ar • Par t Thr ee Descr ibes L ong-Run: Sales and pr ofit goals, mar ket ing mix Sales 8-9 Business Analysis • I nvolves a r eview of t he sales, cost s, and pr ofit pr oject ions t o assess fit wit h company object ives. object I f yes, move t o t he pr oduct development phase. development 8 - 10 • Pr oduct Development • • • • D evelop concept int o physical Develop pr oduct pr Calls for lar ge jump in Calls invest ment i nvest Pr ot ot ypes ar e made Pr ot ot ype must have cor r ect Pr physical feat ur es and convey psychological char act er ist ics psychological 8 - 11 Test M ar ket ing • Pr oduct and pr ogr am Pr i nt r oduced in mor e r ealist ic mar ket set t ing. m ar Not needed for all pr oduct s. Can be expensive and t ime Can consuming, but bet t er t han m aking major mar ket ing mist ake. m ist • • 8 - 12 Commer cializat ion • • M ust decide on tii mi ng (i.e., t when t o int r oduce t he pr oduct ). w hen M ust decide on wher e t o w her i nt r oduce t he pr oduct (e.g., single locat ion, st at e, r egion, nat ionally, int er nat ionally). n at M ust develop a mar ket r ol l out m ar plan. plan. 8 - 13 • Or ganizing New-Pr oduct D evelopment • Sequent ial Appr oach: each Sequent st age complet ed befor e moving t o next phase of t he pr oject . Simult aneous Appr oach: Simult Cr oss-funct ional t eams wor k t hr ough over lapping st eps t o save t ime and incr ease effect iveness. effect 8 - 14 • The Pr oduct L ife Cycle • • • • • Pr oduct development I nt r oduct ion Gr owt h M at ur it y D ecline Decline 8 - 15 Pr oduct L ife Cycle A pplicat ions • • • • • • Pr oduct cl ass h as t he longest life cycle (e.g., gas-power ed car s) gas-power Pr oduct for m t ends t o have t he st andar d PL C shape (e.g., dial t elephone) shape Br and can change quickly because of changing compet it ive at t acks and r esponses (e.g., Tide, Cheer ) Cheer Styl e i s a basic and dist inct ive mode of expr ession (e.g., for mal clot hing, Danish moder n fur nit ur e) m oder Fashi on i s a popular st yle in a given field (e.g., business casual) business Fad i s a fashion t hat ent er s quickly, is adopt ed quickly, and declines fast (e.g., pet r ocks) quickly, 8 - 16 Pr act ical Pr oblems of PL C • • • • • H ar d t o ident ify which st age of t he PL C t he pr oduct is in. H ar d t o pinpoint when t he pr oduct moves t o t he next st age. m oves H ar d t o ident ify fact or s t hat affect pr oduct ’s movement t hr ough st ages. pr H ar d t o for ecast sales level, lengt h of each st age, and shape of PL C. each St r at egy is bot h a cause and r esult of t he St PL C. PL 8 - 17 I nt r oduct ion St age of PL C • • • • • • • Sales: low Cost s: high cost per cust omer Pr ofit s: negat ive M ar ket ing Object ive: cr eat e pr oduct awar eness and t r ial awar Pr oduct : offer a basic pr oduct Pr ice: use cost -plus for mula D ist r ibut ion: build select ive Dist dist r ibut ion dist 8 - 18 Gr owt h St age of PL C • • • • • • • • Sales: r apidly r ising Cost s: aver age cost per cust omer Pr ofit s: r ising M ar ket ing Object ive: maximize mar ket shar e shar Pr oduct : offer ext ension, ser vice, war r ant y Pr ice: penet r at ion st r at egy Dist r ibut ion: build int ensive dist r ibut ion Pr omot ion: r educe t o t ake advant age of Pr demand demand 8 - 19 M at ur it y St age of PL C • • • • • • • • Sales: peak Cost s: low cost per cust omer Pr ofit s: high M ar ket ing Object ive: maximize pr ofit s while defending mar ket shar e w hile Pr oduct : diver sify br and and models Pr ice: mat ch or best compet it or s D ist r ibut ion: build mor e int ensive Dist dist r ibut ion dist Pr omot ion: I ncr ease t o encour age br and Pr swit ching swit 8 - 20 M at ur it y St age of t he PL C • M odifying t he M ar ket : I ncr ease t he consumpt ion of t he cur r ent pr oduct . pr H ow? L ook for new user s and mar ket segment s segment Reposit ion t he br and t o appeal t o Reposit lar ger or fast er -gr owing segment l ar L ook for ways t o incr ease usage among pr esent cust omer s among 8 - 21 • M at ur it y St age of t he PL C • M odifying t he Pr oduct : Changing char act er ist ics such as qualit y, feat ur es, or st yle t o at t r act new user s and t o inspir e mor e usage. i nspir H ow? I mpr ove dur abilit y, r eliabilit y, speed, t ast e I mpr ove st yling and at t r act iveness Add new feat ur es Expand usefulness, safet y, convenience • 8 - 22 M at ur it y St age of t he PL C • M odifying t he M ar ket ing M ix: I mpr oving sales by changing one or mor e mar ket ing mix element s. m or H ow? Cut pr ices L aunch a bet t er ad campaign M ove int o lar ger mar ket channels Offer new or impr oved ser vices t o Offer buyer s buyer 8 - 23 • Decline St age of PL C • • • • • • • • Sales: declining Cost s: low cost per cust omer Pr ofit s: declining M ar ket ing Object ive: r educe expendit ur es and milk t he br and and Pr oduct : phase out weak it ems Pr ice: cut pr ice D ist r ibut ion: select ive--phase out Dist unpr ofit able out let s u npr Pr omot ion: r educe t o minimal level 8 - 24 ...
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This note was uploaded on 11/15/2010 for the course MKTG 380 taught by Professor Robbins,j during the Spring '08 term at Winthrop.

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