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mktg 465 final

mktg 465 final - Chapter 5 New Product Development New...

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Chapter 5: New Product Development New Product Sales Planning Bass Model: Predicting the time of the sales peak and the magnitude of the peak sales Time of sales peak (t)= 1/(p+r) * ln r/p Magnitude of sales peak (M)= Q* (p+r)2 /4r p=coefficient of innovation r=coefficient of imitation Q= Total number of potential buyers New Product Sales Planning for Digital Readers Amazon expects the coefficient of innovation (p) to be 0.005 and the coefficient of imitation (r) to be 0.45 . Furthermore, concept tests with consumers revealed that the total number of potential buyers (Market Potential) for Digital Readers in the United States is 50 million . o When will sales reach its peak? o What is the magnitude of peak sales? How to get ‘p’ and ‘q’ for Bass Model Category p q Cable TV .1 .06 Camcorder .044 .304 Cellular .008 .421 Radios .027 .435 Tractors .000 .234 Dishwashers .000 .179 VCR .025 .603 Phases of New Product Development Key Phases: Concept Generation Two types of new product concepts: o Ready-made o Generated via a creative process Internal creative thinking groups Brainstorming is an important part of most creative group processes Concept Screening o Concept testing Data collection: Surveys, focus groups, or demonstrations Purpose may vary: Idea screening Concept generation or statement refinement Concept evaluation Conjoint analysis Helps determine how buyers value different levels of attributes Product Definition o What is Conjoint Analysis? “A method that enables one to determine how customers value different levels of product attributes” Steps for Conjoint Analysis
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--Determine the product features and their various levels --Get consumer preferences for various attributes jointly --Identify which attributes are valued most by consumers Forecasting Demand o Major types of product use tests Diagnostic small sample tests Limited time horizon consumer test Extended in-home product use test o Market tests Trial, repeat, and usage rates are key measures o Sales forecasting Predicting the Ultimate Market Share Starbucks introduced Via, a new brand of instant coffee in the United States in 2009. The sales manager wishes to determine the product’s long-run share of the market based on sales in the first six months. The market research department has provided data on the cumulative-penetration and repeat-purchase rates for the product to date. The customers who tried this product are somewhat lighter users than average coffee buyers (U=0.9). Democratizing Innovation: Open Source “Open source harnesses the distributive powers of the Internet, parcels the work out to thousands, and uses THEIR PIECEWORKS to build a better whole - It works like an ant colony, where the collective intelligence of the network supersedes any single contributor” (is opposite of manufactured driven) Open source innovation is not limited to software Dell, Procter & Gamble, Wikipedia, Iphone apps
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mktg 465 final - Chapter 5 New Product Development New...

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