Chapter 9 Product Planning and Development

1、Chapter 9Product Planning andDevelopmentCopyright 2001 by McGraw-Hill Ryerson LimitedCopyright 2001 McGraw-Hill Ryerson Limited9 - 2Chapter GoalsTo gain an understanding of: The meaning of total “product” and “new” product Classification of business and consumer products and its relevance to marketi

2、ng planning Product innovation The product-development process When to add new products to a product line The adoption and diffusion process for products Organizational structures for product planning and developmentCopyright 2001 McGraw-Hill Ryerson Limited9 - 3What is a Product? it is more than ph

3、ysical products; includes services, places, persons, and ideas it is easy to visualize the products of Esso, but more difficult to describe those of the Toronto Symphony, UNICEF, or the Salvation Army some products are sold only to consumers, while others are sold to organizations whether a product

4、is a consumer product or a business product depends on how it is usedCopyright 2001 McGraw-Hill Ryerson Limited9 - 4SellersservicesProductqualityPhysicalcharacteristicsof goodsPriceBrandDesignPackagingProductwarrantySellersreputationColourThe Total ProductCopyright 2001 McGraw-Hill Ryerson Limited9

5、- 5Consumer Goods ClassesConsumer products can be classified by the buying behaviour of the consumers: are bought with little time and effort, such as milk, bread, a chocolate bar. are those where extensive comparison is the norm- cars, furniture, clothes. are those for which consumers have a strong

6、 brand preference. BMW, Armani. are those now unknown to the consumer or, if known, undesired.Copyright 2001 McGraw-Hill Ryerson Limited9 - 6Classifying Business Products: unprocessed, become part of other manufactured products processed products that become part of other products major buildings an

7、d equipment used in operations, include computers, desks, tools: low value, used by most firms, convenience products for businessesCopyright 2001 McGraw-Hill Ryerson Limited9 - 7Innovation is Required Products go through life cycles- you need new ones coming on stream. Profits highest when products

8、new. Consumers more selective: they look carefully at each purchase. Also a little jaded. High failure rates in the 75% range. Leads to new products:Innovative= truly uniqueImproved, with valuable new benefitsImitative, another “me too” product.Copyright 2001 McGraw-Hill Ryerson Limited9 - 81. Fords

9、 Edsel automobile.2. Duponts Corfam synthetic leather.3. Polaroids Polavision.4. United Artists Heavens Gate western movie.5. RCAs Videodisc.6. Times TV-Cable Week magazine.7. IBMs PCjr.8. New Coke.9. R.J. Reynolds Premier cigarette.10. Nutrasweets Simplesse fat substitute.Ten World-Class Product Fa

10、iluresCopyright 2001 McGraw-Hill Ryerson Limited9 - 9New Product Development companies must be constantly modifying existing products and developing new ones; the marketplace demands it how new is new? most new products are modifications of or extensions to existing ones the introduction of a new pr

11、oduct is a strategic decision which should be guided by the companys goals and a new product introduction strategyCopyright 2001 McGraw-Hill Ryerson Limited9 - 10Identifythe strategicrole of newproducts,then.1.Ideageneration2.Screeningof ideas3.Businessanalysis4. Prototypedevelopment5.MarketTests6.C

12、ommer-cializationThe New Product Development ProcessCopyright 2001 McGraw-Hill Ryerson Limited9 - 11The New Product Development Process A new product is best developed through a series of six stages:The first two stages provide a focus for generating new-product ideas and a basis for evaluating them

13、.The next three stages deal with ideas and are the least expensive.In their haste, some companies skip stages the most common omission being market tests.9-7Copyright 2001 McGraw-Hill Ryerson Limited9 - 12Criteria for New Products there must be adequate market demand: this is necessary but not suffi

14、cient for success must satisfy key financial criteria must be compatible with environmental standards must fit with the companys marketing structure should also be compatible with production capabilities, satisfy legal requirements, and fit with corporate goals and objectivesCopyright 2001 McGraw-Hi

15、ll Ryerson Limited9 - 13Development of New Product StrategyCompany GoalsProduct StrategyExamplesDefend market shareIntroduce addition toexisting produce line/ revise existing productPizza Huts “BigNew Yorker” and “Stuffed Crust” piesStrengthenreputation as an innovatorIntroduce a really new product

16、- not just an extension of an existing productDigital camerasintroduced by Sony, Canon, and other firmsCopyright 2001 McGraw-Hill Ryerson Limited9 - 14Adoption-Diffusion Process different new products are adopted by consumers at different rates the individual consumer goes through certain stages bef

17、ore adopting a new product marketers must be interested in first creating awareness, then interest, then trial, before the consumer is considered an adopter some people are genuine innovators, while others wait and try later; some never adoptCopyright 2001 McGraw-Hill Ryerson Limited9 - 15New Produc

18、t Adoption and Diffusion The decision-making activity of an individual through which the new product is accepted. The process by which an innovation is spread through a social system over time.Copyright 2001 McGraw-Hill Ryerson Limited9 - 16Stages in the Adoption Process customer is exposed to the p

19、roduct interest and information seeking assessment of the advantages and disadvantages of the new product customer tries the product in low-risk situation; may be a sample or test drive customer decides to buy the product customer decides to stay with the product; attempts dissonance reductionCopyri

20、ght 2001 McGraw-Hill Ryerson Limited9 - 17Adopter Categories Researchers have identified five categories of individual adopters for new products:Innovators 3% of the market.Early adopters 13% of the market.Early majority 34% of the market.Late majority 34% of the market.Laggards 16% of the market. In addition, some individuals nonadopters never accept the innovation.Copyright 2001 McGraw-Hill Ryerson Limited9 - 18Evaluation of new safer baseball for youngsters:1. Relative advantagesuperior to current ba