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Chapter12
DevelopingNew
MarketOfferings
byPowerPointbyMiltonM.PressleyUniversityofNewOrleans1
Whoshouldultimatelydesigntheproduct?Thecustomer,ofcourse.Kotleron
Marketing2ChapterObjectivesInthischapter,wefocusonthefollowingquestions:Whatchallengesdoesacompanyfaceindevelopingnewproducts?Whatorganizationalstructuresareusedtomanagenew-productdevelopment?Whatarethemainstagesindevelopingnewproducts,andhowcantheybemanagedbetter?Whatfactorsaffecttherateofdiffusionandconsumeradoptionofnewlylaunchedproducts?3DevelopingNewMarketOfferings
SixcategoriesofnewproductsNew-to-the-worldproductsNewproductlinesAdditionstoexistingproductlinesImprovementsandrevisionsofexistingproductsRepositioningCostreductions4ChallengesinNew-ProductDevelopment
IncrementalinnovationDisruptivetechnologiesWhydonewproductsfail?Ahigh-levelexecutivepushesafavoriteideathroughinspiteofnegativeresearchfindings.Theideaisgood,butthemarketsizeisoverestimated.Theproductisnotwelldesigned.5ChallengesinNew-ProductDevelopment
Theproductisincorrectlypositionedinthemarket,notadvertisedeffectively,oroverpriced.Theproductfailstogainsufficientdistributioncoverageorsupport.Developmentcostsarehigherthanexpected.Competitorsfightbackharderthanexpected.6ChallengesinNew-ProductDevelopment
Factorsthattendtohindernew-productdevelopmentShortageofimportantideasincertainareasFragmentedmarketsSocialandgovernmentalconstraintsCostofdevelopmentCapitalshortagesFasterrequireddevelopmenttimeShorterproductlifecycles7OrganizationalArrangements
New-productdeploymentrequiresspecificcriteria–onecompanyestablishedthefollowingacceptancecriteriaTheproductcanbeintroducedwithinfiveyearsTheproducthasamarketpotentialofatleast$50millionanda15percentgrowthrate.Theproductwouldprovideatleast30percentreturnonsalesand40percentoninvestment.Theproductwouldachievetechnicalormarketleadership.8BudgetingForNewProductDevelopment3M’sapproach:15%ruleEachpromisingideagetsan“executivechampion”ExpectsomefailuresGoldenStepawardshandedouteachyearOrganizationalArrangements
93Monline:The3MInnovationNetwork10Table12.1FindingOneSuccessfulNewProduct(Startingwith64NewIdeas)StageNumberofIdeasPassRatioCostperProductIdeaTotalCost1.Ideascreening641:4$1,000$64,0002.Concepttesting161:220,000320,0003.Productdevelopment81:2200,0001,600,0004.Testmarketing41:2500,0002,000,0005.Nationallaunch21:25,000,00010,000,000$5,721,000$13,984,00011OrganizationalArrangementsOrganizingNew-ProductDevelopmentProductmanagersNew-productmanagersHigh-levelmanagementcommitteeNewproductdepartmentVentureteams12Stage-gatesystemGatekeepersmakeoneoffourdecisions:GoKillHoldRecycleOrganizationalArrangements13IdeaGenerationInteractingwithOthersSalesrepresentativesIntermediariesProductchampionManagingtheDevelopmentProcess:Ideas14TechniquesforstimulatingcreativityinindividualsandgroupsAttributelistingForcedrelationshipsMorphologicalanalysisReverseassumptionanalysisNewcontextsMind-mappingManagingtheDevelopmentProcess:Ideas15IdeaScreeningIdeamanagerIdeacommitteeTwotypesoferrorsinscreeningideasDROP-errorGO-errorManagingtheDevelopmentProcess:Ideas16Someofthemostnotable““drop-errors”havecomefromthemostrecognizablenamesinAmericanbusiness.Xeroxsawthepotentialofthecopymachine,IBMandEastmanKodakdidnot.IBMthoughtthepersonalcomputermarketwouldbeminiscule.Canyouthinkofany““drop-errors”thatthecompanydidn’tsurvive?DiscussionQuestion17Table12.2Product-IdeaRatingDeviceRelativeWeightProductScoreProductRatingProductSuccessRequirements(a)(b)(c=axb)Uniqueorsuperiorproduct.40.8.32Highperformancetocostratio.30.6.18Highmarketingdollarsupport.20.7.14Lackofstrongcompetition.10.5.05Total1.00.69Ratingscale:.00-.30poor;.31-.60fair;.61-.80good.Minimumacceptancerate:.6118ManagingtheDevelopmentProcess:ConcepttoStrategyConceptDevelopmentandTestingProductideaProductconceptConceptdevelopmentCategoryconceptProduct–positioningmapBrandconcept19Figure12.3:ProductandBrandPositioning20Sometimesanewproductisdeveloped,likethefelt-tippenandthe“walkman”stylepersonalmusicdevice.Consumersweren’tclamoringforeitheroftheseproductsbeforetheycametomarket.Mostpeoplehadn’tevenconceivedofsuchanitem.Carefulplanningdevelopedmarketsforthesenewlines.Canyouthinkofmorerecentexamples?DiscussionQuestion21ManagingtheDevelopmentProcess:ConcepttoStrategyConceptTestingRapidprototypingVirtualrealityCustomer-drivenengineeringQuestionstomeasureproductdimensionsCommunicabilityandbelievabilityNeedlevelGaplevelNeed-gapscore22ManagingtheDevelopmentProcess:ConcepttoStrategyPerceivedvaluePurchaseintentionUsertargets,purchaseoccasions,purchasingfrequencyConjointAnalysisExample:fivedesignelementsThreepackagedesignsThreebrandnamesThreepricesPossibleGoodHousekeepingsealPossiblemoney-backguarantee23ManagingtheDevelopmentProcess:ConcepttoStrategyMarketingStrategyBusinessAnalysisEstimatingTotalSales24ManagingtheDevelopmentProcess:ConcepttoStrategySurvival-agedistributionEstimatingCostandProfits25Table12.3ProjectedFive-Year-Cash-FlowStatement(inthousandsofdollars)Year0Year1Year2Year31.Salesrevenue$0$11,889$15,381$19,6542.Costofgoodssold03,9815,1506,5813.Grossmargin07,90810,23113,0734.Developmentcosts-3,5000005.Marketingcosts08,0006,4608,2556.Allocatedoverhead01,1891,5381,965Seetextforcompletetable26ManagingtheDevelopmentProcess:ConcepttoStrategyBreak-evenanalysisRiskanalysis27ManagingTheDevelopmentProcess:DevelopmenttoCommercializationProductDevelopmentQualityFunctionDeployment(QFD)Customerattributes(CAs)Engineering
attributes(EAs)Lands’’EndJapanWebsite28ManagingTheDevelopmentProcess:DevelopmenttoCommercializationCustomertestsAlphatestingBetatestingConsumerpreferencemeasuresRank-orderPaired-comparisonMonadic-rating29ManagingTheDevelopmentProcess:DevelopmenttoCommercializationMarketTestingConsumer-GoodsMarketTestingSeekstoestimatefourvariablesTrialFirstrepeatAdoptionPurchasefrequencySaleswaveresearch30ManagingTheDevelopmentProcess:DevelopmenttoCommercializationSimulatedTestMarketingControlledTestMarketingTestMarketsHowmanytestcities?Whichcities?Lengthoftest?Whatinformation?Whatactiontotake?Business-GoodsMarketTesting31ManagingTheDevelopmentProcess:DevelopmenttoCommercializationPhilips’ProntoWebsiteCommercializationWhen(Timing)FirstentryParallelentryLateentryWhere(Geographic
Strategy)32ToWhom(Target-MarketProspects)How(IntroductoryMarketStrategy)Criticalpathscheduling(CPS)ManagingTheDevelopmentProcess:DevelopmenttoCommercializationTheiMac,launchedwithadramaticcountdowncampaign33TheConsumer-AdoptionProcessAdoptionConsumer-adoptionprocessConsumer-loyaltyprocessMass-marketapproachHeavy-usagetargetmarketingStagesintheAdoptionProcessInnovationInnovationdiffusionprocess34TheConsumer-AdoptionProcessAdoptersofnewproductsmovethroughfivestagesAwarenessInterestEvaluationTrialAdoptionFactorsInfluencingtheAdoptionProcessReadinesstoTryNewProductsandPersonalInfluence35Figure12.7:AdopterCategorizationontheBasisofRelativeTimeofAdoptionofInnovation36TheConsumer-AdoptionProcessPersonalinfluenceCharacteristicsoftheInnovationRelativeadvantageCompatibilityComplexityDivisibilityCommunicabilityOrganizations’ReadinesstoAdoptInnovations379、静夜四无无邻,荒居居旧业贫。。。12月-2212月-22Saturday,December31,202210、雨中黄叶树树,灯下白头头人。。07:57:3007:57:3007:5712/31/20227:57:30AM11、以以我我独独沈沈久久,,愧愧君君相相见见频频。。。。12月月-2207:57:3007:57Dec-2231-Dec-2212、故人江江海别,,几度隔隔山川。。。07:57:3007:57:3007:57Saturday,December31,202213、乍见见翻疑疑梦,,相悲悲各问问年。。。12月月-2212月月-2207:57:3007:57:30December31,202214、他乡生白发发,旧国见青青山。。31十二月月20227:57:30上午07:57:3012月-2215、比不不了得得就不不比,,得不不到的的就不不要。。。。十二月月227:57上上午午12月月-2207:57December31,202216、行动出成成果,工作作出财富。。。2022/12/317:57:3107:57:3131December202217、做前,,能够环环视四周周;做时时,你只只能或者者最好沿沿着以脚脚为起点点的射线线向前。。。7:57:31上午午7:57上午午07:57:3112月-229、没有失败,,只有暂时停停止成功!。。12月-2212月-22Saturday,December31,202210、很多事情情努力了未未必有结果果,但是不不努力却什什么改变也也没有。。。07:57:3107:57:3107:5712/31/20227:57:31AM11、成功功就是是日复复一日日那一一点点点小小小努力力的积积累。。。12月月-2207:57:3107:57Dec-2231-Dec-2212、世间间成事事,不不求其其绝对对圆满满,留留一份份不足足,可可得无无限完完美。。。07:57:3107:57:3107:57Saturday,December31,202213、不知香积寺寺,数里入云云峰。。12月-2212月-2207:57:3107:57:31December31,202214、意志坚强强的人能把把世界放在在手中像泥泥块一样任任意揉捏。。31十二二月20227:57:31上上午07:57:3112月-2215、楚塞三湘接接,荆门九派派通。。。十二月227:57上上午12月-2207:57December31,202216、少年十五二二十时,步行行夺得胡马骑骑。。2022/12/317:57:3107:57:3131December202217、空山山新雨雨后,,天气气晚来来秋。。。7:57:31上上午7:57上上
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