better success rate Research innovation usually for new to the

Better success rate research innovation usually for

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better results (60-80% success rate)Research innovation - usually for “new to the world” products Why launch new products? -changes in customer tastes, lifestyles and tendencies -changes in technology-competitors launch new products Reasons for SuccessMarket related:Products satisfies market needsBetter than competitor’s products Precise concept definition (positioning, physical characteristics) Company related:Takes company strengths and weaknesses into accountHas management support and resourcesEfficient organization Reasons for failureMarket over-estimationDesign mistakesWrong positioning, advertising, price, distribution Underestimation of competitors strengthActual investment was higher than projected Search for product ideasIndirect sources:Company employeesDistributorsCompetitorsConsumers, users
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Direct sourcesSales reportsMarket researchMagazines and commercialsInventorsTrade showsAvailable new product and licenses Creative analysis: analyzing and solving a problem, combining previous experience with other techniques such as brainstorming)Product idea screening - very important stage Objective is to analyze and spot the most attractive ideas, and to identify and drop the least attractive ideas or those that are incompatible with the company goals or resources Criteria for evaluation stage:Identify key factors in marketing Assign value to each factor according to its relative importanceValue the idea regarding each factorGenerate a results indexProduct development and product testing-important to distinguish between product idea, product concept, and product image - T. Levitt “every sale is the sale of a concept”A product concept is “a detailed version of the idea stated in meaningful consumer terms” A product image is “how the consumers perceive the actual/potential product”-useful for goods and services, as well as ideas Example: for a new bicycle - “should be hassle-free and innovative”Marketing strategy and business analysisGathering required informationEvaluation criteriaEconomic analysis (NPV-net present value, IRR-internal rate of return)Strategic analysis (market attractiveness, project contributions)Business analysis -evaluate the feasibility, real possibilities of the selected product, the company must analyze the new proposals attractiveness. The following information is needed: Sales forecastCost estimatesCash-flow estimatesInvestment projects analysis
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Relies on the evaluation of economic and strategic aspects of the business, keeping mind that:Resources are usually scarceThere are many different opportunitiesEach project around a new idea has different risk implicationsProduct DevelopmentThe idea becomes a product physically, technically, and commerciallyThe proposed new idea is transformed froma product concept to a product prototype This stage implies a
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