Transcript 11 - City University of New York

chapter
eleven
developing
new products
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Developing New Products
LEARNING OBJECTIVES
LO1 Identify the reasons firms innovate.
LO2 Describe the different groups of adopters
articulated by the diffusion of innovation
theory.
LO3 Identify the factors that determine how fast
innovation diffuses.
LO4 Explain the various stages involved in
developing a new product or service.
LO5 Describe the various product life cycle
concepts.
11-2
Innovation and Value
Changing
Customer
Needs
Fashion
Cycles
WHY DO
FIRMS
CREATE NEW
PRODUCTS?
Market
Saturation
Managing
Risk
through
Diversity
11-3
Diffusion of Innovation
11-4
Pioneers radically
change
competition and
consumer
preferences.
©Derrick Donnelly, Blackbag Technologies
New Product Introductions
11-5
Using the Diffusion of
Innovation Theory
Compatibility
Relative
Advantage
Observability
Factors
Affecting
Product
Diffusion
Complexity and
Trialability
11-6
How Firms Develop New Products
11-7
Idea Generation
11-8
Product Development
Prototype
Alpha testing
Beta testing
©Lars A Niki
11-9
Market Testing
Premarket
tests
Test
marketing
Customers
exposed
Mini product
launch
Customers
surveyed
More expensive
than premarket
tests
Firm makes
decision
Market demand
is estimated
Digital Vision/Getty Images
Dodge Commercial
11-10
Product Launch
New Product Marketing Mix
Promotion
Price
Place
11-11
Evaluation of Results
Satisfaction of technical requirements
Customer acceptance
Satisfaction of the firm’s financial
requirements
11-12
Product Life Cycle
11-13
Strategies Based on the Product
Life Cycle: Some Caveats
Theoretically they are bell
shaped but in reality they
can take many shapes
Managers do not know
exactly what the shape each
product’s life cycle will take
so there is no way to know
precisely what stage they
are in.
11-14