Chapter 8 Summary: New Product Development

Learning Objectives

• Explain product life cycle stages
• Describe ways to extend product life cycles
• Differentiate between types of new products
• Describe the adoption curve of new products
• Detail the new product development process

Product Life Cycle (PLC)

• Stages of PLC: Introduction, Growth, Maturity, Decline
• Purpose: Manage product launch to decline
• Adjustments: Revamping and repositioning to meet consumer needs

Stages in Detail:

• Introduction Phase:
  • Few competitors
  • Marketing: Awareness-focused
  • Profit: Minimal
• Growth Phase:
  • Increased competition
  • Emphasizes product differentiation
  • Profit: Rising to maximum
• Maturity Phase:
  • Many competitors
  • Focus on brand loyalty
  • Profit: Levels off
• Decline Phase:
  • Reduced competition
  • Focus on product rationalization
  • Profit: Declining

Types of New Products

• Minor Innovations: No new consumer learning
• Continuous Innovations: Changes current habits
• Radical Innovations: Requires new learning

The Adoption Curve

• Segments:

  • Innovators: 2.5%
  • Early adopters: 13.5%
  • Early majority: 34%
  • Late majority: 34%
  • Laggards: 16%

• Barriers to Adoption:

  • Usage habits, value changes, risk concerns, psychological impacts

New Product Development Process

1. Idea Generation: Brainstorm new concepts
2. Screening and Evaluation: Evaluate feasibility and market fit
3. Business Analysis: Assess financial viability
4. Development: Create prototypes, internal testing
5. Test Marketing: Limited rollout to gather consumer feedback
6. Commercialization: Full product launch and marketing

Reasons for New Product Failure

• Insignificant Point of Difference
• Poor Concept Definition
• Insufficient Market Attractiveness
• Poor Marketing Mix Execution
• Bad Timing