1 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

1Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Exhibit 8-1

DeclineDecline

IntroductionIntroduction

GrowthGrowth

MaturityMaturity

TimeTime

Sales Revenue/

period

Sales Revenue/

period

Development

Development


Continuous period between development and introduction

No sales volume Product is not yet completely defined Profits do not exist Price/value are being determined Promotion may be oriented towards

publicity about technological developments

Heavy investment to prepare the offering that satisfies customer needs


Low sales volume Product is somewhat basic Profits are typically negative Price/value are being determined Promotion is used to build

awareness If offering elements are outsourced

or reside in a first-time value network, the logistical process experiences a learning curve 4

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Profits increase, new adopters and pragmatists accept product

Market penetration pricing Product differentiation is important Distribution is often important in

the training and education of customers


Profits have peaked Promotion reinforces buyer decisions and

focuses on supplier reputation and value Remaining major players compete in an

oligopoly Distribution serves market sub-segments Price is a major component of the

marketing mix New customers do not replace sales

volumes as old customers move to newer products


Consolidation usually occurs among suppliers

Product line is reduced to minimize product variation

Promotion reduced to minimal levels to accommodate existing customers

Price in relation to long-term contracts is a major part of the marketing mix


Stage 1

Stage 2 Stage 3

Stage 4 Stage 5

Stage 6

Stage 7


New ideas can come from anywhere. customers technical department, marketing department, the sales team or anyone else within the company.

Ideas must then be screened––a process that is best carried out within the company, where internal experts know what is technically feasible.

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Product description – a detailed explanation of the product including: - purpose of the product, - technical specifications, - market drivers, - barriers, - competitive environment, etc.


Project justification – a breakdown of the market size and potential in terms of:› the total addressable market (i.e. notional

spend from all audiences who could be consumers of the new product);

› the served available market (i.e. current spend on all products with which the new product would compete);

› pricing strategy and revenue potential.


Project plan – next steps and criteria for successful product launch,

Technical and manufacturing feasibility, CAPEX requirements, Risks, Costs Timings Annual sales targets


This is development of the physical product.

Prototypes are created for review, and the manufacturing and marketing plans delineated.

A quick and small scale customer review of the prototype so as to identify any major potential flaws in the product as early as possible.


Once sufficient prototypes have been made, it is highly recommended that the product is tested in the field. Software is typically put through a “beta” test to

Industrial products can be placed with potential customers for them to trial and then comment on their likelihood to buy the product if it were on the market.


The final stage kicks off the commercialization of the product with full-scale production.

Some companies choose to carry out further research upon launch of the new product to monitor its uptake and keep a pulse on its “health” within the market.


Two development approaches:

Engineering Driven

Market/Customer Driven


cross functional approach- Lead usually by Product Managers- Several departments involved- difficult to manage- complex interactions


Market Driven Standards:

New ideas are often question marks

Concept must fit and support the organization


Understand the technology in depth Define and redefine current and future

customer needs and guide development with this process

Motivate other company departments and organizations

Screen and select ideas from all sources Reward the efforts of the technical and

support staff Catalyze company resources to get the

right talent on the job19

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- B2B new prdocut development is a cooperative environment between seller & buyer

- Product/services are mostly modified according to special needs of different customers

- R&D, engineering, design, operations, purchasing & sales departments of companies work together


The missing marketing plan No real need exists The market size is overestimated or a

“Me Too” product fails to penetrate the market

The offering fails to meet needs adequately

Market will not pay Contrary perceptions of innovation

A good marketing plan is a solution to all of these!


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