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.,12-1,Chapter12DevelopingNewMarketOfferingsby,PowerPointbyMiltonM.PressleyUniversityofNewOrleans,.,12-2,Whoshouldultimatelydesigntheproduct?Thecustomer,ofcourse.,KotleronMarketing,.,12-3,ChapterObjectives,Inthischapter,wefocusonthefollowingquestions:Whatchallengesdoesacompanyfaceindevelopingnewproducts?Whatorganizationalstructuresareusedtomanagenew-productdevelopment?Whatarethemainstagesindevelopingnewproducts,andhowcantheybemanagedbetter?Whatfactorsaffecttherateofdiffusionandconsumeradoptionofnewlylaunchedproducts?,.,12-4,DevelopingNewMarketOfferings,SixcategoriesofnewproductsNew-to-the-worldproductsNewproductlinesAdditionstoexistingproductlinesImprovementsandrevisionsofexistingproductsRepositioningCostreductions,.,12-5,ChallengesinNew-ProductDevelopment,IncrementalinnovationDisruptivetechnologiesWhydonewproductsfail?Ahigh-levelexecutivepushesafavoriteideathroughinspiteofnegativeresearchfindings.Theideaisgood,butthemarketsizeisoverestimated.Theproductisnotwelldesigned.,.,12-6,ChallengesinNew-ProductDevelopment,Theproductisincorrectlypositionedinthemarket,notadvertisedeffectively,oroverpriced.Theproductfailstogainsufficientdistributioncoverageorsupport.Developmentcostsarehigherthanexpected.Competitorsfightbackharderthanexpected.,.,12-7,ChallengesinNew-ProductDevelopment,Factorsthattendtohindernew-productdevelopmentShortageofimportantideasincertainareasFragmentedmarketsSocialandgovernmentalconstraintsCostofdevelopmentCapitalshortagesFasterrequireddevelopmenttimeShorterproductlifecycles,.,12-8,OrganizationalArrangements,New-productdeploymentrequiresspecificcriteriaonecompanyestablishedthefollowingacceptancecriteriaTheproductcanbeintroducedwithinfiveyearsTheproducthasamarketpotentialofatleast$50millionanda15percentgrowthrate.Theproductwouldprovideatleast30percentreturnonsalesand40percentoninvestment.Theproductwouldachievetechnicalormarketleadership.,.,12-9,BudgetingForNewProductDevelopment3Msapproach:15%ruleEachpromisingideagetsan“executivechampion”ExpectsomefailuresGoldenStepawardshandedouteachyear,OrganizationalArrangements,.,12-10,3Monline:The3MInnovationNetwork,.,12-11,Table12.1FindingOneSuccessfulNewProduct(Startingwith64NewIdeas),.,12-12,OrganizationalArrangements,OrganizingNew-ProductDevelopmentProductmanagersNew-productmanagersHigh-levelmanagementcommitteeNewproductdepartmentVentureteams,.,12-13,Stage-gatesystemGatekeepersmakeoneoffourdecisions:GoKillHoldRecycle,OrganizationalArrangements,.,12-14,IdeaGenerationInteractingwithOthersSalesrepresentativesIntermediariesProductchampion,ManagingtheDevelopmentProcess:Ideas,.,12-15,TechniquesforstimulatingcreativityinindividualsandgroupsAttributelistingForcedrelationshipsMorphologicalanalysisReverseassumptionanalysisNewcontextsMind-mapping,ManagingtheDevelopmentProcess:Ideas,.,12-16,IdeaScreeningIdeamanagerIdeacommitteeTwotypesoferrorsinscreeningideasDROP-errorGO-error,ManagingtheDevelopmentProcess:Ideas,.,12-17,Someofthemostnotable“drop-errors”havecomefromthemostrecognizablenamesinAmericanbusiness.Xeroxsawthepotentialofthecopymachine,IBMandEastmanKodakdidnot.IBMthoughtthepersonalcomputermarketwouldbeminiscule.Canyouthinkofany“drop-errors”thatthecompanydidntsurvive?,DiscussionQuestion,.,12-18,Table12.2Product-IdeaRatingDevice,.,12-19,ManagingtheDevelopmentProcess:ConcepttoStrategy,ConceptDevelopmentandTestingProductideaProductconceptConceptdevelopmentCategoryconceptProductpositioningmapBrandconcept,.,12-20,Figure12.3:ProductandBrandPositioning,.,12-21,Sometimesanewproductisdeveloped,likethefelt-tippenandthe“walkman”stylepersonalmusicdevice.Consumerswerentclamoringforeitheroftheseproductsbeforetheycametomarket.Mostpeoplehadntevenconceivedofsuchanitem.Carefulplanningdevelopedmarketsforthesenewlines.Canyouthinkofmorerecentexamples?,DiscussionQuestion,.,12-22,ManagingtheDevelopmentProcess:ConcepttoStrategy,ConceptTestingRapidprototypingVirtualrealityCustomer-drivenengineeringQuestionstomeasureproductdimensionsCommunicabilityandbelievabilityNeedlevelGaplevelNeed-gapscore,.,12-23,ManagingtheDevelopmentProcess:ConcepttoStrategy,PerceivedvaluePurchaseintentionUsertargets,purchaseoccasions,purchasingfrequencyConjointAnalysisExample:fivedesignelementsThreepackagedesignsThreebrandnamesThreepricesPossibleGoodHousekeepingsealPossiblemoney-backguarantee,.,12-24,ManagingtheDevelopmentProcess:ConcepttoStrategy,MarketingStrategyBusinessAnalysisEstimatingTotalSales,.,12-25,ManagingtheDevelopmentProcess:ConcepttoStrategy,Survival-agedistributionEstimatingCostandProfits,.,12-26,Table12.3ProjectedFive-Year-Cash-FlowStatement(inthousandsofdollars),Seetextforcompletetable,.,12-27,ManagingtheDevelopmentProcess:ConcepttoStrategy,Break-evenanalysisRiskanalysis,.,12-28,ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,ProductDevelopmentQualityFunctionDeployment(QFD)Customerattributes(CAs)Engineeringattributes(EAs),LandsEndJapanWebsite,.,12-29,ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,CustomertestsAlphatestingBetatestingConsumerpreferencemeasuresRank-orderPaired-comparisonMonadic-rating,.,12-30,ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,MarketTestingConsumer-GoodsMarketTestingSeekstoestimatefourvariablesTrialFirstrepeatAdoptionPurchasefrequencySaleswaveresearch,.,12-31,ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,SimulatedTestMarketingControlledTestMarketingTestMarketsHowmanytestcities?Whichcities?Lengthoftest?Whatinformation?Whatactiontotake?Business-GoodsMarketTesting,.,12-32,ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,PhilipsProntoWebsite,CommercializationWhen(Timing)FirstentryParallelentryLateentryWhere(GeographicStrategy),.,12-33,ToWhom(Target-MarketProspects)How(IntroductoryMarketStrategy)Criticalpathscheduling(CPS),ManagingTheDevelopmentProcess:DevelopmenttoCommercialization,TheiMac,launchedwithadramaticcountdowncampaign,.,12-34,TheConsumer-Adopti

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