Transcript Chapter 20 Introducing New Market Offerings

Phillip
Kevin Lane
Kotler • Keller
Marketing Management • 14e
Introducing New Market
Offerings
Discussion Questions
1. What challenges does a company face in developing
new products and services?
2. What organizational structures and processes do
managers use to oversee new-product development?
3. What are the main stages in developing new products
and services?
4. What is the best way to manage the new-product
development process?
5. What factors affect the rate of diffusion and consumer
adoption of newly launched products and services?
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New Product Options
Make or Buy
Improved
Formula
Types of New Products
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New-Product Development Challenges
The Innovation Imperative
New Product Success
New Product Failure
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Organizational Arrangements
Organizing New
Product Development
Customer-driven Engineering
Budgeting for NPD
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Finding One Successful New Product
Stage
Number
of Ideas
Pass
Ratio
Cost
per Idea
Total Cost
1. Idea Screening
64
1:4
$1,000
$64,000
2. Concept Testing
16
1:2
20,000
320,000
3. Product Development
8
1:2
200,000
1,600,000
4. Test Marketing
4
1:2
500,000
2,000,000
5. National Launch
2
1:2
5,000,000
10,000,000
$13,984,000
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Organizing New Product Development
Cross-functional Teams
“Skunkworks”
Stage-gate Systems
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New-Product Decision Process
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Generating Ideas
Employees
Crowd Sourcing
Competitors
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Lead Users
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Creativity Techniques
Forced
Relationships
Mind Mapping
Morphological
Analysis
Lateral Marketing
Attribute Listing
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Ideas – Screening
Product Success
Requirements
Relative
Weight (a)
Product
Score (b)
Product Rating
(c=a x b)
Unique or superior product
.40
.8
.32
High performance-to-cost ratio
.30
.6
.18
High marketing dollar support
.20
.7
.14
Lack of strong competition
.10
.5
.05
Total
Overall
probability
of success
1.00
Probability
of technical
completion
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Probability of
commercialization
given technical
completion
.69
Probability of
economic
success given
commercialization
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Forces Fighting New Ideas
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Concept to Strategy
Concept Development
Business Analysis
Marketing Strategy Development
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Concept Development
Concept 2
Concept 1
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Concept 3
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Continuum of Evaluation for Products
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Concept Testing
Product Dimensions
1. Communicability and Believability
2. Need level
3. Gap level
4. Perceived value
5. Purchase intention
6. User targets, purchase occasions,
frequency
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Conjoint Analysis
Design Elements
• Three package designs (A, B, C)
• Three brand names (K2R, Glory, Bissell)
• Three Prices ($1.19, $1.39, $1.59)
• A possible Good Housekeeping seal (yes, no)
• A possible money-back guarantee (yes, no)
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Continuum of Evaluation for Products
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Marketing Strategy Development
Target Market’s
• Size
• Structure
• Behavior
Marketing-mix strategy
Marketing Mix
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Business Analysis
Estimating Total Sales
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Estimating Costs and Profits
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PLC Sales for Three Types of Products
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Development to Commercialization
Product Development
Market Testing
Commercialization
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Product Development
Physical Prototype
Alpha Testing
(Internal)
Beta Testing
(Customers)
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Customer Tests
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Market Testing
Sales-Wave
Research
Controlled
Test Marketing
Simulated
Test Marketing
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Test Markets
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Commercialization
When?
Where?
How?
To Whom?
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The Consumer-Adoption Process
Stages in the Adoption Process
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The Consumer-Adoption Process
Influencing Factors
• Buyer Readiness
• Personal Influence
• Innovation Characteristics
• Organizations Readiness
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Buyer Readiness
Early Majority
Laggards
Innovators
Early Adopters
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Late Majority
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Continuum of Evaluation for Products
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Innovation Characteristics
Divisibility
Compatibility
Relative Advantage
Complexity
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Communicability
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