Chapter Outline

• 10.1 New Products from a Customer’s Perspective

• 10.2 Stages of the New Product Development Process

• 10.3 The Use of Metrics in Evaluating New Products

• 10.4 Factors Contributing to the Success or Failure of New Products

• 10.5 Stages in the Consumer Adoption Process for New Products

• 10.6 Ethical Considerations in New Product Development

New Products from a Customer’s Perspective

• Definition of New Product:

  • New-to-the-World, New-to-the-Firm, Additions, Improvements, Repositioned Products

• Customer Perceptions:

  • Discontinuous, Continuous, and Dynamically Continuous Innovations

• Rewards:

  • Targeting new markets, Increasing market share and revenue streams

• Risks:

  • Lack of differentiation, Financial & Technical feasibility, Poor timing

Stages of the New Product Development Process

• Idea Generation:

  • Create numerous ideas focusing on profitability

• Idea Screening & Evaluation:

  • Filter through ideas to identify profitable ones

• Concept Development & Testing:

  • Evolve ideas into product concepts

• Market Strategy Development:

  • Develop preliminary marketing strategy plan

• Business Analysis:

  • Assess the product’s business appeal

• Product Development:

  • Create a prototype of the product

• Test-Marketing:

  • Test market the product concept

• Commercialization:

  • Launch the product

• Evaluation of Results:

  • Review marketing performance using metrics

The Use of Metrics in Evaluating New Products

• Importance of Metrics:

  • Quantifiable data to evaluate product success

• Specific Metrics:

  • R&D spending, Current year sales percentage, Time to value, Product adoption rate, ROI

Factors Contributing to Success or Failure

• Success Factors:

  • Unique benefits, Planning before development, Technological & marketing synergy, Market attractiveness

• Failure Factors:

  • Misunderstanding consumer needs, Targeting wrong market, Lack of uniqueness, Delayed market entry, Poor pricing structure

Stages in the Consumer Adoption Process

• Stages:

  • Awareness, Interest, Evaluation, Trial, Adoption

• Adopter Categories:

  • Innovators, Early Adopters, Early Majority, Late Majority, Laggards

Ethical Considerations in New Product Development

• Intellectual Property:

  • Understanding patents, trademarks, copyrights

• Due Care in Development:

  • Conducting trademark and patent searches, filing applications