1. Introducing New Market Offerings
LECTURE-29
Introducing New Market Offerings

2. Chapter Questions
What challenges does a company face in developing new products and services?
What organizational structures and processes do managers use to manage new-product development?
What are the main stages in developing new products and services?
What is the best way to manage the new-product development process?
What factors affect the rate of diffusion and consumer adoption of newly launched products and services?

3. Categories of New Products
New-to-the-world
New product lines
Additions
Improvements
Repositionings
Cost reductions

4. The World’s Most Innovative Companies
Apple
Google
Toyota
General Electric
Microsoft
Procter & Gamble 3M
Walt Disney
IBM
Sony
Wal-Mart
Honda
Starbucks
Target
BMW
Samsung

5. Seven Notions of Innovation
See the future through the eyes of your customer
Intellectual property and brand power are key assets
Use digital technology to create tools for customers
Build a championship team
Innovation is a state of mind
Speed is critical, so push your organization
Partner up if you’re not the best
Source: Kodak CEO Antonio Porez

6. Factors That Limit New Product Development
Shortage of ideas
Fragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles

7. What is a Venture Team?
A venture team is a cross-functional group charged with developing a specific product or business; intrapreneurs are relieved of other duties and provided a budget and time frame.

8. Criteria for Staffing Venture Teams
Desired team leadership style
Desired level of leader expertise
Team member skills and expertise
Level of interest in concept
Potential for personal reward
Diversity of team members

9. Ways to Find Great New Ideas
Run informal sessions with customers
Allow time off for technical people to putter on pet projects
Make customer brainstorming a part of plant tours
Survey your customers
Undertake “fly on the wall” research to customers

10. More Ways to Find Great Ideas
Use iterative rounds with customers
Set up a keyword search to scan trade publications
Treat trade shows as intelligence missions
Have employees visit supplier labs
Set up an idea vault

11. Drawing Ideas from Customers
Observe customers using product
Ask customers about problems with products
Ask customers about their dream products
Use a customer advisory board or a brand community of enthusiasts to discuss product

12. Idea Generation: Creativity Techniques
Attribute listing
List the attributes of an object, then modify each object e.g. Screwdriver handle wooden or metal or plastic etc.
Forced relationships
List several ideas & consider each in relation to each other idea e.g. Office furniture desk, Book case or Filing cabinet etc.
Morphological analysis
Start with a problem & start thinking dimensions e.g. Power generation oil gas, wind, hydro or solar etc.

13. Idea Generation: Creativity Techniques
Reverse assumption analysis
List all the normal assumptions about an entity & then reverse them e.g. Restaurant menus ……raw material
New contexts
Take familiar process & put them in new context e.g. day care services for pets.
Mind mapping
Start with a thought & then think of the next thought. Link these thoughts e.g. Cars, colours, features etc.

14. Lateral Mapping Gas Station Stores = Gas stations + food
Cyber Cafes = Cafeteria + Internet
Cereak Bars = Cereal + snacking
Kinder Surprise = Candy + toy
Sony Walkman = Audio + portable

15. Variations on Failure Absolute product failure Partial product failure
Relative product failure

16. Concepts in Concept Development
Product idea
Product concept
Category concept
Brand concept
Concept testing

17. Concept Testing Communicability and believability Need level Gap level
Perceived value
Purchase intention
User targets, purchase occasions, purchasing frequency

18. Marketing Strategy Target market’s size, structure, and behavior
Planned price, distribution, and promotion for Year One
Long-run sales and profit goals and marketing-mix strategy over time

19. Product Development Quality function deployment (QFD)
The job of translating targeting customer requirements into a working prototype. It helped by a set of methods known as Quality Function Deployment (QFD)
Customer attributes
Engineering attributes

20. Prototype Testing Alpha testing Beta testing
Testing the product within the firm to see how it performs in different applications.
Beta testing
Testing the product with customers.
Rank-order method
Paired-comparison method
Monadic-rating method
Market testing

21. Test Market Decisions How many test cities? Which cities?
Length of test?
What information to collect?
What action to take?

22. Timing of Market Entry
First entry
Parallel entry
Late entry

23. Criteria for Choosing Rollout Markets
Market potential
Company’s local reputation
Cost of filling pipeline
Cost of communication media

24. What is Adoption?
Adoption is an individual’s decision to become a regular user of a product.

25. Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption

26. Characteristics of an Innovation
Relative advantage
The degree to which the innovation appears superior to existing products.
Compatibility
The degree to which the innovation matches the values & experiences of the individuals.
Complexity
The degree to which the innovation is relatively difficult to understand or use.

27. Characteristics of an Innovation
Divisibility
The degree to which the innovation can be tried on a limited basis.
Communicability
The degree to which the beneficial results of use are observable or describable to others.

28. Bibliography Marketing Management – A South Asian Perspective
by Philip Kotler, Kevin Lane Keller, Abraham Koshy &
Mithileshwar Jha, 13th Edition, Published by Pearson
Education, Inc.
Advertising Principles & Practice by Wells, Moriarty &
Burnett Published by Pearson Education, Inc.
Principles of Advertising & IMC by Tom Duncan 2nd
Edition, Published by McGraw-Hill Irwin.
Principles of Marketing by Philip Kotler & Gary Armstrong
Thirteenth Edition, Published by Prentice Hall

29. “Never deprive someone of hope; it might be all they have”
The End:
“Never deprive someone of hope;
it might be all they have”