1. Chapter 11 Developing New Market Offerings Marketing Management
Tenth Edition
Philip Kotler

2. Objectives Challenges in New Product Development (NPD)
Organizational Structure & NPD
Stages & Management of NPD
Diffusion & Adaption of New Products

3. Why New Products Fail “Over Championing” Overestimated Demand
Poor Design
Poor Marketing Execution
High Development Costs
Strong Competitive Reaction

4. Challenges in NPD Idea Shortage Fragmented Markets
Social & Governmental Constraints
Cost
Capital Shortage
Need for Speed
Shorter Product Life Cycles

5. New Product Development Process
Marketing
Strategy
Development
Business
Analysis
Product
Development
Concept
Development
and Testing
Market
Testing
Idea
Screening
Commercialization
Idea
Generation

6. Probability of Success
commercialization
given technical
completion X
Probability of
economic
success given
commercialization X
Overall
probability
of success =
Probability
of technical
completion

7. Concept Development & Testing
1. Develop Product Ideas into
Alternative Product Concepts
Concept Development & Testing
2. Concept Testing - Test the Product
Concepts with Groups of Target Customers
3. Choose the Best One

8. Product & Brand Positioning
(a) Product-positioning
map
(breakfast market)
b) Brand-positioning
map
(instant breakfast market)
Expensive
Slow
Inexpensive
Quick
High price/oz.
Low in calories
Low price/oz.
High in calories
Brand C
Brand B
Brand A
Bacon
and
eggs
Pancakes
Instant
breakfast
Cold
cereal
Hot

9. Good Housekeeping Seal?
Conjoint Analysis
Brand name --
Utility
1.0
| | |
K2R Glory Bissell
Retail Price
Utility --
1.0
| | |
$ $ $1.59
Utility
Money-Back
Guarantee?
1.0 --
| |
No Yes
Good Housekeeping Seal?
Utility
1.0 --
| |
No Yes

10. Consumer-Goods Market Testing
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Sales-
Wave
Research
Test offering trail to
a sample of
consumers in
successive
periods.
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.

11. Commercialization
When
Whom
Product
Price
Place
Promotion
Where

12. Time of adoption innovations
Adopter Categorization of the Basis of Relative Time of Adoption of Innovations
2 1/2%
Innovators
13 1/2%
Early
adopters
34%
Early
majority
34%
Late
majority
16%
Laggards
Time of adoption innovations

13. Characteristics of the Innovation Rate of Adoption
Relative advantage
Compatibility
Complexity
Divisibility
Communicability

14. Review Challenges in New Product Development (NPD)
Organizational Structure & NPD
Stages & Management of NPD
Diffusion & Adaption of New Products