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Chapter 9- slide 1Copyright 2009 Pearson Education, Inc.
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Chapter Nine
New-Product Development andProduct Life-Cycle Strategies
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Chapter 9- slide 2Copyright 2010 Pearson Education, Inc.
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New-Product Development and
Product Life-Cycle Strategies
New-Product Development Strategy
The New-Product DevelopmentProcess
Managing New-Product Development
Product Life-Cycle Strategies Additional Product and Service
Considerations
Topic Outline
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Chapter 9- slide 3Copyright 2010 Pearson Education, Inc.
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New-Product Development Strategy
Acquisition refers to the buying of a wholecompany, a patent, or a license to produce
someone elses product
New product development refers to originalproducts, product improvements, product
modifications, and new brands developedfrom the firms own research anddevelopment
Two ways to obtain new products
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Chapter 9- slide 4Copyright 2010 Pearson Education, Inc.
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New-Product Development
Reasons for new product failure
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Chapter 9- slide 5Copyright 2010 Pearson Education, Inc.
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The New-Product Development
Process
Idea generation is the systematic searchfor new-product ideas
Sources of new-product ideas
Internal
External
Idea Generation
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Chapter 9- slide 6Copyright 2010 Pearson Education, Inc.
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New-Product Development Process
Internal sources refer to the companys own
formal research and development,management and staff, and intrapreneurial
programs
External sources refer to sources outside the
company such as customers, competitors,distributors, suppliers, and outside design
firms
Idea Generation
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Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Identify good ideas and drop poor ideas
R-W-W Screening Framework: Is it real?
Can we win?
Is it worth doing?
Idea Screening
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
New-Product Development
Process
Product idea is an idea for a possible
product that the company can see itself
offering to the market Product concept is a detailed version of
the idea stated in meaningful consumer
terms Product image is the way consumers
perceive an actual or potential product
Concept Development and Testing
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Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Concept testing refers to testing new-
product concepts with groups of targetconsumers
Concept Development and Testing
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Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Marketing strategy development refers
to the initial marketing strategy for
introducing the product to the market Marketing strategy statement includes:
Description of the target market
Value proposition
Sales and profit goals
Marketing Strategy Development
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Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Business analysis involves a review of
the sales, costs, and profit projectionsto find out whether they satisfy the
companys objectives
Marketing Strategy Development
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Chapter 9- slide 12Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Product development involves the
creation and testing of one or morephysical versions by the R&D or
engineering departments
Requires an increase in investment
Marketing Strategy Development
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Chapter 9- slide 13Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Test marketing is the stage at which the
product and marketing program areintroduced into more realistic marketing
settings
Provides the marketer with experience intesting the product and entire marketing
program before full introduction
Marketing Strategy Development
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Chapter 9- slide 14Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Types of Test Markets
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Chapter 9- slide 15Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Advantages of simulated test markets
Less expensive than other test methods Faster
Restricts access by competitors
Disadvantages Not considered as reliable and accurate
due to the controlled setting
Marketing Strategy Development
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Chapter 9- slide 16Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Marketing Strategy Development
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Chapter 9- slide 17Copyright 2010 Pearson Education, Inc.
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New-Product Development
Process
Commercialization is the introduction
of the new product
When to launch
Where to launch Planned market rollout
Marketing Strategy Development
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Chapter 9- slide 18Copyright 2010 Pearson Education, Inc.
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Managing New-Product
Development
Successful new-product development
should be:
Customer centered
Team centered
Systematic
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Chapter 9- slide 19Copyright 2010 Pearson Education, Inc.
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Managing New-Product
Development
Customer-centered new product
development focuses on finding new
ways to solve customer problems and
create more customer satisfying
experiences
Begins and ends with solving customer
problems
New-Product Development Strategies
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Chapter 9- slide 20Copyright 2010 Pearson Education, Inc.
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Managing New-Product Development
Sequential new-product development is adevelopment approach where company
departments work closely togetherindividually to complete each stage of theprocess before passing along to the nextdepartment or stage
Increased control in risky or complexprojects
Slow
New-Product Development Strategies
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Chapter 9- slide 21Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Managing New-Product Development
Team-based new-product development is a
development approach where companydepartments work closely together in cross-
functional teams, overlapping in the product-
development process to save time and
increase effectiveness
New-Product Development Strategies
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Chapter 9- slide 22Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Managing New-Product Development
Systematic new-product development
is an innovative development
approach that collects, reviews,evaluates, and manages new-product
ideas
Creates an innovation-oriented culture Yields a large number of new-product
ideas
New-Product Development Strategies
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Chapter 9- slide 23Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Fads are temporary periods of unusually
high sales driven by consumer
enthusiasm and immediate product orbrand popularity
Product Life-Cycle Strategies
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Chapter 9- slide 24Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Product Life-Cycle Strategies
Slow sales growth
Little or no profit
High distribution and promotion
expense
Introduction Stage
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Chapter 9- slide 25Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Product Life-Cycle Strategies
Sales increase
New competitors enter the market
Price stability or decline to increase
volume
Consumer education
Profits increase
Promotion and manufacturing costs
gain economies of scale
Growth Stage
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Chapter 9- slide 26Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Product Life-Cycle Strategies
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D tosupport sales and profits
Maturity Stage
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Chapter 9- slide 27Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Product Life-Cycle Strategies
Market modifying
Product modifying
Marketing mix modifying
Maturity Stage Modifying Strategies
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Chapter 9- slide 28Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Product Life-Cycle Strategies
Maintain the product
Harvest the product
Drop the product
Decline Stage
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Chapter 9- slide 29Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Additional Product and Service
Considerations
Public policy and regulations regarding
developing and dropping products,patents, quality, and safety
Product Decisions and SocialResponsibility
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Chapter 9- slide 30Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Additional Product and Service
Considerations
Determining what products and services to
introduce in which countries Standardization versus customization
Packaging and labeling
Customs, values, laws
International Product andServices MarketingChallenges
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Chapter 9 slide 31Copyright 2010 Pearson Education, Inc.
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright 2010 Pearson Education, Inc.Copyright 2010 Pearson Education, Inc.
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