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1、New-Product Development and Product Life-Cycle StrategiesChapter 100ObjectivesUnderstand how companies find and develop new-product ideas.Learn the steps in the new-product development process.Know the stages of the product life cycle.Understand how marketing strategies change during the products li

2、fe cycle.1$50 billion in profits over 27 yearsEarly new-product development relied heavily on copying the competition$4.2 billion annually invested in R & DInnovation is critical to Microsofts future successMuch of R & D efforts are Internet relatedMany new products and services are in development M

3、icrosoftCase Study2DefinitionNew Product DevelopmentDevelopment of original products, product improvements, product modifications, and new brands through the firms own R & D efforts.3New products can be obtained via acquisition or development.New products suffer from high failure rates.Several reaso

4、ns account for failure.New Product Development Strategy4New Product Development Process:Stage 1: Idea Generation Internal idea sources: R & D External idea sources: Customers, competitors, distributors, suppliersNew Product Development Strategy5New Product Development Process:Stage 2: Idea Screening

5、 Product development costs increase substantially in later stages. Ideas are evaluated against criteria; most are eliminated.New Product Development Strategy6New Product Development Process:Stage 3: Concept Development and Testing Product concepts provide detailed versions of new product ideas. Conc

6、ept tests ask target consumers to evaluate product concepts.New Product Development Strategy7New Product Development Process:Stage 4: Marketing Strategy Development Strategy statements describe:The target market, product positioning, and sales, share, and profit goals for the first few years.Product

7、 price, distribution, and marketing budget for the first year.Long-run sales and profit goals and the marketing mix strategy.New Product Development Strategy8New Product Development Process:Stage 5: Business Analysis Sales, cost, and profit projectionsStage 6: Product Development Prototype developme

8、nt and testingNew Product Development Strategy9New Product Development Process:Stage 7: Test Marketing Standard test markets Controlled test markets Simulated test marketsStage 8: CommercializationNew Product Development Strategy10The Typical Product Life Cycle (PLC) Has Five StagesProduct Developme

9、nt, Introduction, Growth, Maturity, DeclineNot all products follow this cycle: Fads Styles FashionsProduct Life-Cycle Strategies11The product life cycle concept can be applied to a:Product class (soft drinks)Product form (diet colas)Brand (Diet Dr. Pepper) Using the PLC to forecast brand performance

10、 or to develop marketing strategies is problematicProduct Life-Cycle Strategies12Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineBegins when the company develops a new-product ideaSales are zeroInvestment costs are highProfits are negativePLC Stages 13Product Life-Cy

11、cle StrategiesProduct developmentIntroductionGrowthMaturityDeclineLow salesHigh cost per customer acquiredNegative profitsInnovators are targetedLittle competitionPLC Stages 14Product Offer a basic productPrice Use cost-plus basis to setDistribution Build selective distributionAdvertising Build awar

12、eness among early adopters and dealers/resellersSales Promotion Heavy expenditures to create trialMarketing Strategies: Introduction Stage15Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineRapidly rising salesAverage cost per customerRising profitsEarly adopters are t

13、argetedGrowing competitionPLC Stages 16Product Offer product extensions, service, warrantyPrice Penetration pricingDistribution Build intensive distributionAdvertising Build awareness and interest in the mass marketSales Promotion Reduce expenditures to take advantage of consumer demandMarketing Str

14、ategies: Growth Stage17Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineSales peakLow cost per customerHigh profitsMiddle majority are targetedCompetition begins to declinePLC Stages 18Product Diversify brand and modelsPrice Set to match or beat competitionDistributio

15、n Build more intensive distributionAdvertising Stress brand differences and benefitsSales Promotion Increase to encourage brand switchingMarketing Strategies: Maturity Stage19Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineDeclining salesLow cost per customerDeclining profitsLaggards are targetedDeclining competitionPLC Stages 20Product Phase

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