chap9.New Product Development product lifecycle.ppt

chap9.New Product Development product lifecycle.ppt

• 1.
  NEW PRODUCT DEVELOPMENT NEWPRODUCT DEVELOPMENT AND AND PRODUCT LIFE-CYCLE STRATEGIES PRODUCT LIFE-CYCLE STRATEGIES
• 2.
  • THE MEANINGSOF NEW PRODUCT (COMPANY VS. CUSTOMER PERSPECTIVE) THE MEANINGS OF NEW PRODUCT (COMPANY VS. CUSTOMER PERSPECTIVE) • TYPES OF NEW PRODUCTS WITH EXAMPLES TYPES OF NEW PRODUCTS WITH EXAMPLES • WHY DO NEW PRODUCTS FAIL? REASONS WHY DO NEW PRODUCTS FAIL? REASONS • NEW PRODUCT DEVELOPMENT PROCESS (NDP)--- KEY TO INNOVATION NEW PRODUCT DEVELOPMENT PROCESS (NDP)--- KEY TO INNOVATION • IDEA GENERATION AND SCREENING IDEA GENERATION AND SCREENING • CONCEPT DEVELOPMENT & TESTING CONCEPT DEVELOPMENT & TESTING • MARKETING STRATEGY (BUSINESS ANALYSIS) MARKETING STRATEGY (BUSINESS ANALYSIS) • PROTOTYPE DEVELOPMENT/DESIGN PROTOTYPE DEVELOPMENT/DESIGN • TESTING MARKETING & LAUNCH TESTING MARKETING & LAUNCH
• 3.
  • SHOULD ANEW WEBSITE BE A NEW PRODUCT? SHOULD A NEW WEBSITE BE A NEW PRODUCT? • IS PLAYSTATION-4 A NEW PRODUCT (PLAYSTATION-3 EXISTS)? IS PLAYSTATION-4 A NEW PRODUCT (PLAYSTATION-3 EXISTS)? • CHATGPT-4 IS A NEW PRODUCT IN THE PRESENCE OF GPT-2&3? CHATGPT-4 IS A NEW PRODUCT IN THE PRESENCE OF GPT-2&3? • ROOHAFZA MILKSHAKE ROOHAFZA MILKSHAKE • JAZZCASH, TIMASHA, SIMOSA, BIP & VION AS LAUNCHED BY MOBILINK JAZZZZ JAZZCASH, TIMASHA, SIMOSA, BIP & VION AS LAUNCHED BY MOBILINK JAZZZZ • NESTLE MILK PACK WITH SCREWCAP NESTLE MILK PACK WITH SCREWCAP • TREAT CORPORATION (PHARMA + BATTERIES MANUFACTURING DIVERSIFICATION) TREAT CORPORATION (PHARMA + BATTERIES MANUFACTURING DIVERSIFICATION)
• 5.
  • NEW-TO-THE-WORLD (I.E. REALLY NEW PRODUCTS): NEW-TO-THE-WORLD ( I.E. REALLY NEW PRODUCTS): • UNIQUE AND INNOVATIVE PRODUCT UNIQUE AND INNOVATIVE PRODUCT • RISKY DUE TO UNWILLINGNESS AND EDUCATION OF THE CONSUMER TO SELL RISKY DUE TO UNWILLINGNESS AND EDUCATION OF THE CONSUMER TO SELL • CONSIDERABLE R & D COST CONSIDERABLE R & D COST • EXAMPLE: EXAMPLE: DESKTOP COMPUTER WITH WORD PROCESSOR KICKED TYPEWRITER DESKTOP COMPUTER WITH WORD PROCESSOR KICKED TYPEWRITER APPLE’S TABLET IPAD (2010) APPLE’S TABLET IPAD (2010) • NEW PRODUCT LINES: NEW PRODUCT LINES: • NEW PRODUCT CATEGORIES NEW PRODUCT CATEGORIES • ALREADY EXIST IN THE MARKET (I.E., SALES, TRENDS, COST, DEMAND IS PREDICTABLE) ALREADY EXIST IN THE MARKET (I.E., SALES, TRENDS, COST, DEMAND IS PREDICTABLE) • LOST RISK AS THESE ARE SAME TO THE PRODUCTS ALREADY EXISTING IN THE MARKET) LOST RISK AS THESE ARE SAME TO THE PRODUCTS ALREADY EXISTING IN THE MARKET) • EXAMPLES: GOURMET (A BAKERY RETAIL CHAIN) LAUNCHED GOURMET NEWS EXAMPLES: GOURMET (A BAKERY RETAIL CHAIN) LAUNCHED GOURMET NEWS NETWORK (GNN); MICROSOFT MOBILE PHONES; UNILEVER DOVE SOAP TO SHAMPOO) NETWORK (GNN); MICROSOFT MOBILE PHONES; UNILEVER DOVE SOAP TO SHAMPOO)
• 8.
  • IDEA GENERATIONAND SCREENING IDEA GENERATION AND SCREENING • CONCEPT DEVELOPMENT AND TESTING CONCEPT DEVELOPMENT AND TESTING • MARKETING STRATEGY MARKETING STRATEGY • BUSINESS ANALYSIS BUSINESS ANALYSIS • PRODUCT DEVELOPMENT PRODUCT DEVELOPMENT • TEST MARKETING TEST MARKETING • COMMERCIALIZATION (LAUNCH) COMMERCIALIZATION (LAUNCH)
• 9.
  New Product DevelopmentProcess Step 1. Idea Generation Systematic Search for New Product Ideas (Mobile App for financial services) Internal sources (Employees, Executives, Sales Force) Customers Competitors Distributors Suppliers Crowd Sourcing (inviting large audience) Example: PayPal Challenge to Top Coder Community to develop innovative iPhone and android app
• 10.
  Source: Ehsan ulHaque, Khalid Hasan, "New Product Development" In Strategic Marketing Management in Asia. Published online: 16 Jan 2017; 225-260. Permanent link to this document: https://doi.org/10.1108/978-1-78635-746-520161008
• 11.
  • PROCESS TOSPOT GOOD IDEAS AND DROP PROCESS TO SPOT GOOD IDEAS AND DROP POOR ONES POOR ONES • CRITERIA CRITERIA • MARKET SIZE MARKET SIZE • PRODUCT PRICE PRODUCT PRICE • DEVELOPMENT TIME & COSTS DEVELOPMENT TIME & COSTS • MANUFACTURING COSTS MANUFACTURING COSTS • RATE OF RETURN RATE OF RETURN • EXECUTIVES WRITE UP NEW IDEAS FOR REVIEW BY EXECUTIVES WRITE UP NEW IDEAS FOR REVIEW BY NEW PRODUCT COMMITTEE. NEW PRODUCT COMMITTEE. • R-W-W (‘REAL , WIN , WORTH DOING?) R-W-W (‘REAL , WIN , WORTH DOING?) New Product Development Process Step 2. Idea Screening
• 12.
  New Product DevelopmentProcess Step 3. Concept Development & Testing 1. Develop Product Ideas into Alternative Product Concepts 2. Concept Testing - Test the Product Concepts with Groups of Target Customers 3. Choose the Best One Distinction Product idea: possible product that may be offered to the market. Product concept: Detailed version of idea into meaningful way. Product image: Consumer perception about an actual or a potential product.
• 15.
  New Product DevelopmentProcess Step 4. Marketing Strategy Development Marketing Strategy Statement Formulation  Younger, well-educated, moderate- to  high-income individuals, couples, or small families seeking practical, environmentally responsible transportation;  50,000 cars first year (loss of $15M);  Profit $25 Million;  fun to drive and less pollutant  Marketing Budget for the first year.  Red, White, Blue  Pricing for distributors, Promotion etc.  Advertising budget. Increasing price in 2nd and 3rd year… Budget increase annually Marketing research etc.
• 16.
  New Product DevelopmentProcess Step 5. Business Analysis Step 6. Product Development Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives If No, Eliminate Product Concept
• 17.
  New Product DevelopmentProcess Step 7. Test Marketing Standard Test Market Full marketing campaign in a small number of representative cities. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Controlled Test Market A few stores that have agreed to carry new products for a fee.
• 18.
  Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments($) Sales and Profits ($)
• 19.
  Sales Costs Profits Marketing Objectives Product Price Low sales Highcost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers
• 20.
  Growth Stage ofthe PLC Sales Costs Profits Marketing Objectives Product Price Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market
• 21.
  Maturity Stage ofthe PLC Sales Costs Profits Marketing Objectives Product Price Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Distribution Build more intensive distribution Advertising Stress brand differences and benefits
• 22.
  Decline Stage ofthe PLC Sales Costs Profits Marketing Objectives Product Price Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers