New Products

3/4 Exam 2 Bus 130

New Product Process

1. New-Product Strategy Development

2. Idea Generation

3. Screening and Evaluation

4. Business Analysis

5. Development

6. Market Testing

7. Commercialization

New Product Strategy Development

Defines the role ofr a new product in terms of the firms objectives.

Idea Generation

Develop a pool of concepts as potential new products

• Customers and Suppliers

• Employees, Research & Development Labs

• Competitors

• Other External Sources (universities, inventors)

Screening and Evaluation

A “product idea” evolves into the development of “alternative concepts.”

Internal screening

Employees screen

External Screening

“Concept tests” seek consumer feedback for ideas rather than actual products.

Business Analysis

• Specifies features of the product

• Marketing Strategy needed (e.g targeting and positioning)

• Detailed financial projections

• Fit with company objectives

Development

• Development of concept on paper into a physical product

• Prototype must have physical and psychological characteristics

• Testing for effectiveness and safety

Market Testing

• Actual Projects

• Realistic Market Setting

• Also test marketing mix

Commercialization

A. When to Introduce

B. Where to distribute (number of regions)

C. To Whom

D. How

Factors affecting new product adoption

Relative Advantage, Compatibility, Complexity, Trialability, Observability

Relative Advantage

• Is it cheaper, easier, faster, filling an unmet need?

Compatibility

Past experiences or cultural values

Complexity

Greater complexity means longer adoption

Trialability

Degree to which it can be sampled or tested

Observability

Degree to which result is obvious/immediate

Product Innovators 5 templates

1. Subtraction

2. Task Unification

3. Division

4. Multiplication

5. Attribute Dependency

Subtraction

Products/services that completely removed something thought essential

Task Unification

Repurposing; taking an existing resource and assigning a new task

Division

Dividing our components to different functions placed in different usage situations.

Multiplication

Components copied but change in someway

Attribute Dependency

Attributes in product or services that were unrelated now correlated/depend on one another.