kotler10_exs - New-Product Development and Product...

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Unformatted text preview: New-Product Development and Product Life-Cycle Strategies Strategies Cha pte r 10 Objectives • Unde rs ta nd how compa nie s find a nd Unde de ve lop ne w-product ide a s . de • Le a rn the s te ps in the ne w-product Le de ve lopme nt proce s s . de • Know the s ta ge s of the product life Know cycle . c ycle • Unde rs ta nd how ma rke ting s tra te gie s Unde cha nge during the product’s life cycle . c ha Case Study Mic ro s o ft Mic • $ 50 billio n in • Inno vatio n is c ritic al $50 Inno p ro fits o ve r 27 to Mic ro s o ft’s future ye ars s uc c e s s ye • Early ne w-pro duc t • Muc h o f R & D Early Muc d e ve lo pme nt e ffo rts are Inte rne t re lie d he avily o n re late d re c o pying the • Many ne w pro duc ts Many c o mpe titio n a nd s e rvic e s are in • $ 4.2 billio n d e ve lo pme nt $4.2 Definition • Ne w P roduct De ve lopme nt De ve lopme nt of origina l products , De p roduct improve me nts , product m odifica tions , a nd ne w bra nds through the firm’s own R & D e fforts . through New Product Development Strategy • Ne w products ca n be obta ine d via Ne a cquis ition or de ve lopme nt. • Ne w products s uffe r from high Ne fa ilure ra te s . fa • S e ve ra l re a s ons a ccount for fa ilure . fa New Product Development Strategy • Ne w P roduct De ve lopme nt P roce s s : S ta ge 1: Ide a Ge ne ra tion Inte rnal ide a s ource s : – R &D E xte rnal ide a s ource s : – C us tome rs , compe titors , dis tributors , Cus s upplie rs New Product Development Strategy • Ne w P roduct De ve lopme nt Ne P roce s s : S ta ge 2: Ide a S cre e ning P roduct de ve lopm e nt cos ts incre as e s ubs tantially in late r s tage s . Ide as are e valuate d agains t crite ria; m os t are e lim inate d. New Product Development Strategy • Ne w P roduct De ve lopme nt Ne P roce s s : S ta ge 3: Conce pt De ve lopme nt a nd Te s ting Te P roduct conce pts provide de taile d v e rs ions of ne w product ide as . C once pt te s ts as k targe t cons um e rs to e valuate product conce pts . New Product Development Strategy • Ne w P roduct De ve lopme nt P roce s s : S ta ge 4: Ma rke ting S tra te gy De ve lopme nt De S trate gy s tate m e nts de s cribe : – The ta rge t ma rke t, product pos itioning, a nd s a le s , The s ha re , a nd profit goa ls for the firs t fe w ye a rs . – P roduct price , dis tribution, a nd ma rke ting budge t for the firs t ye a r. for – Long-run s a le s a nd profit goa ls a nd the ma rke ting Long-run mix s tra te gy. m ix New Product Development Strategy • Ne w P roduct De ve lopme nt Ne P roce s s : S ta ge 5: Bus ine s s Ana lys is S ale s , cos t, and profit proje ctions S ta ge 6: P roduct De ve lopme nt Prototype de ve lopm e nt and te s ting P rototype New Product Development Strategy • Ne w P roduct De ve lopme nt Ne P roce s s : S ta ge 7: Te s t Ma rke ting S tandard te s t m arke ts Controlle d te s t m arke ts C ontrolle S im ulate d te s t m arke ts S ta ge 8: Comme rcia liza tion Product Life-Cycle Strategies • The Typica l P roduct Life Cycle (P LC) The Ha s Five S ta ge s Ha P roduct De ve lopme nt, Introduction, Growth, Ma turity, De cline G rowth, Not a ll products follow this cycle : Not Fads Fads S tyle s Fas hions Fas Product Life-Cycle Strategies • The product life cycle conce pt ca n be The a pplie d to a : P roduct cla s s (s oft drinks ) P roduct form (die t cola s ) Bra nd (Die t Dr. P e ppe r) Us ing the PLC to fore cas t brand pe rform ance o r to de ve lop m arke ting s trate gie s is proble m atic p roble Product Life-Cycle Strategies P LC S tag e s PLC • P roduct Product de ve lopm e nt de • Introduction • Growth • Maturity • De cline • Be gins whe n the Be c ompa ny de ve lops a ne w-product ide a ne • S a le s a re ze ro • Inve s tme nt cos ts Inve a re high • P rofits a re ne ga tive Product Life-Cycle Strategies P LC S tag e s PLC • P roduct Product de ve lopm e nt de • Introduction • Growth • Maturity • De cline • Low s a le s • High cos t pe r High cus tome r a cquire d c us • Ne ga tive profits • Innova tors a re Innova ta rge te d ta • Little compe tition Marketing Strategies: Introduction Stage • • • • Product – O ffe r a ba s ic product Price – Us e cos t-plus ba s is to s e t Us Dis tribution – Build s e le ctive dis tribution Adve rtis ing – Build a wa re ne s s a mong e a rly a dopte rs a nd de a le rs /re s e lle rs • S ale s Prom otion – He a vy e xpe nditure s to cre a te tria l to Product Life-Cycle Strategies P LC S tag e s PLC • P roduct Product de ve lopm e nt de • Introduction • Growth • Maturity • De cline • Ra pidly ris ing s a le s • Ave ra ge cos t pe r Ave cus tome r c us • Ris ing profits • E a rly a dopte rs a re Ea ta rge te d ta • Growing compe tition Marketing Strategies: Growth Stage • Product – O ffe r product e xte ns ions , s e rvice , wa rra nty wa • Price – P e ne tra tion pricing • Dis tribution – Build inte ns ive dis tribution • Adve rtis ing – Build a wa re ne s s a nd inte re s t in the ma s s ma rke t in • S ale s Prom otion – R e duce e xpe nditure s to ta ke a dva nta ge of cons ume r de ma nd ta Product Life-Cycle Strategies P LC S tag e s PLC • P roduct Product de ve lopm e nt de • Introduction • Growth • Maturity • De cline • S a le s pe a k • Low cos t pe r Low cus tome r c us • High profits • Middle ma jority a re Middle ta rge te d ta • C ompe tition be gins Compe to de cline to Marketing Strategies: Maturity Stage • Product – Dive rs ify bra nd a nd mode ls • Price – S e t to ma tch or be a t compe tition • Dis tribution – Build more inte ns ive dis tribution d is • Adve rtis ing – S tre s s bra nd diffe re nce s a nd be ne fits be • S ale s Prom otion – Incre a s e to e ncoura ge bra nd s witching b ra Product Life-Cycle Strategies P LC S tag e s PLC • P roduct Product de ve lopm e nt de • Introduction • Growth • Maturity • De cline • De clining s a le s • Low cos t pe r Low cus tome r c us • De clining profits • La gga rds a re La ta rge te d ta • De clining compe tition Marketing Strategies: Decline Stage • Product – P ha s e out we a k ite ms • Price – Cut price C ut • Dis tribution – Us e s e le ctive dis tribution: pha s e out unprofita ble outle ts p ha • Adve rtis ing – R e duce to le ve l ne e de d to re ta in ha rd-core loya lis ts re • S ale s Prom otion – R e duce to minima l le ve l ...
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This note was uploaded on 02/09/2012 for the course COMPUTER S a303 taught by Professor None during the Spring '11 term at BEM Bordeaux Management School.

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