New Product Development and Product Life Cycle Strategies

Flashcards about new product development and product life cycle strategies.

Acquisition

The buying of a whole company, a patent, or a license to produce someone else’s product.

New product development

Original products, product improvements, product modifications, and new brands developed from the firm’s own research and development.

Idea generation

The systematic search for new product ideas.

Internal sources

Sources inside the company such as R&D, management, staff and intrapreneurial programs.

External sources

Sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms.

Crowdsourcing

Inviting broad communities of people into the new product innovation process.

Idea Screening

R-W-W screening framework

R-W-W screening framework questions

Is it real? Can we win? Is it worth doing?

Product idea

An idea for a possible product that the company can see itself offering to the market.

Product concept

A detailed version of the idea stated in meaningful consumer terms.

Product image

The way consumers perceive an actual or potential product.

Concept testing

Testing new product concepts with groups of target consumers.

Marketing strategy development

Designing an initial marketing strategy for a new product based on the product concept.

Marketing strategy statement consists of:

Target market description, Value proposition planned, Sales, market-share, and marketing mix.

Business analysis

A review of the sales, costs, and profit projections for a new product.

Product development

Developing the product concept into a physical product.

Test marketing

The stage of new product development in which the product and its proposed marketing program are tested in realistic market settings.

Commercialization

Introducing a new product into the market.

Successful new product development should be:

Customer centered, Team based, Systematic.

Introduction stage

Slow sales growth, Little or no profit, High distribution and promotion expenses.

Growth stage

Sales increase, New competitors enter the market, Profits increase, Economies of scale, Consumer education, Lowering prices to attract more buyers.

Maturity stage

Slowdown in sales, Many suppliers, Substitute products, Overcapacity leads to competition, Increased promotion and R&D to support sales and profits.

Modification Strategies

Modify the market, Modify the product, Modify the marketing mix.

Decline stage

Maintain the product, Harvest the product, Drop the product.

Introduction Characteristics

Low sales, High cost per customer, Negative profits, Innovators, Few competitors.

Growth Characteristics

Rapidly rising sales, Average cost per customer, Rising profits, Early adopters, Growing number of competitors.

Maturity Characteristics

Peak sales, Low cost per customer, High profits, Mainstream adopters, Stable number beginning to decline of competitors.

Decline Characteristics

Declining sales, Low cost per customer, Declining profits, Lagging adopters, Declining number of competitors.

Marketing objectives in the introduction stage

Create product engagement and trial.

Marketing objectives in the growth stage

Maximize market share.

Marketing objectives in the maturity stage

Maximize profit while defending market share.

Marketing objectives in the decline stage

Reduce expenditure and milk the brand.

Introduction Strategies

Offer a basic product, Use cost-plus, Build selective distribution, Build product awareness among early adopters and dealers, Use heavy sales promotion to entice trial.

Growth Strategies

Offer product extensions, service, and warranty, Price to penetrate market, Build intensive distribution, Build engagement and interest in the mass market, Reduce sales promotion.

Maturity Strategies

Diversify brand and models, Price to match or beat competitors, Build more intensive distribution, Stress brand differences and benefits, Increase sales promotion.