BUAD307_L9_NPD

BUAD307_L9_NPD - Product Strategy II: New Product...

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Unformatted text preview: Product Strategy II: New Product Development & Product Life Cycle Yi Zhu BUAD 307 June 27, 2011 Last Class Definition and Classification of Product Major Product Decisions Individual Product Decisions Product Line Decisions Product Mix Decisions Addition Concepts Brand Equity Product Line/Mix Line Depth/Mix Width Today New Product Development New Product Adoption Product Life Cycle New Product Development Introduction Failure rate of consumer products 1961 45.6% 1971 53.4% 1981 64.5% 1991 80.0% Failures can be costly New Product Development Introduction Reasons for New Product Failure Overestimation of market size Poor design Incorrect positioning Wrong timing Priced too high Ineffective promotion Management influence High development costs Competition New Product Development Introduction Why introduce new products given these bad odds? Market needs change If you dont someone else will Products under 5 years old contribute to 30% of profit New Product Development Introduction Categories of New Product New-to-the-World New Product Lines Product Line Additions Improvements or Revisions Repositioned Products Lower-Priced Products The NPD Process New-Product Strategy Idea Screening Idea Generation Business Analysis Development Test Marketing Commercialization New Product The NPD Process Cost Breakdown Stage Ideas Success Ratio Cost/Idea Total Idea Screening 64 1:4 $1,000 $64,000 Concept Test 16 1:2 $20,000 $320,000 Product Development 8 1:2 $200,000 $1,600,000 Test Marketing 4 1:2 $500,000 $2,000,000 National Launch 2 1:2 $5,000,000 $10,000,000 The NPD Process New Product Strategy Acquisition New product development Be consistent with the objectives of the marketing department, the business unit, and the corporation The NPD Process...
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This note was uploaded on 11/01/2011 for the course BUAD 307 taught by Professor Morristowns during the Summer '07 term at USC.

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BUAD307_L9_NPD - Product Strategy II: New Product...

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