350 Ch 8 - New Products/Product Life Cycle

Idea generation

• first stage of product development

• systematic search for new product ideas

internal product idea sources

• intrapreneurial programs

• internal social networks

external product idea sources

• competitors

• customers

• distributors and suppliers

crowdsourcing

inviting broad communities of people into the new product innovation process

idea screening

screening new product ideas to spot good ones and drop poor ones as soon as possible

• new idea write up reviewed by committee

• RWW framework

  • Real need

  • Win w strategic comp adv

  • Worth doing - PROFITS $

product image

the way a product is perceived by consumers

product concept

a detailed version of the new product idea stated in consumer terms

product idea

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

product concept testing

Methods

• Presenting the concepts to consumers symbolically or physically or with a word or picture description

• Asking customers about their reactions to the concepts

market strategy development

• initial strategy statement for new product

• marketing strategy statement

  • describes target market, planned value proposition, sales, market-share, profit goals for first few years

  • outlines planned product price, distribution, marketing budget for 1st year

  • describes LR sales, profit goals, marketing mix strategy

business analysis

Review of the sales, costs, and profit projections for a new product

• To find out whether the projections satisfy the company’s objectives

product development

develop the product concept into a physical product

• ensure the product idea can be turned into a workable market offering

test marketing

• product and proposed marketing program and introduced in a realistic market setting

• gives marketer an experience with marketing a product before introduction

• tests the product and its marketing program

• CONS

  • high costs and time consuming

standard test markets alternatives

• Controlled test markets

• Simulated test markets

Reasons for using alternative test markets

• Reduce the costs of test marketing

• Speed up the process

commercialization

• introduce a new product to the market

• considers:

  • time

  • place

    • single location, region, national/international market

sales and profits over the product life cycle

• sales peak at maturity

• profits lowest at introduction

styles, fashion, fad

styles fluctuate over time

fashion slowly dec over time

fad sharp rise, sharp dec over time