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Chapter 10 Developing and Managing Products
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Categories of New Products
New-To-The-World New Product Lines Product Line Additions Improvements/Revisions Repositioned Products Lower-Priced Products Six Categories of New Products
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Successful New-Product Development Process
New Product Success Factors Long-Term Commitment New Product Strategy Capitalize on Experience Establish an Environment
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New-Product Development Process
New-Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization New Product
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SoftBook IBM Electronic Newspaper Rocket e-book BMW R 1200 C
Design Awards for 1999 Polaroid PopShot iMac Voice-Egg Nissan SUT (Sports Utility Truck)
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usually before any prototype has
Concept Test A test to evaluate a new-product idea, usually before any prototype has been created.
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Choosing a Test Market Similar to planned distribution
Relative isolation and free of influences Advertising availability; multiple media Diversified cross section No atypical purchase habits Representative population/income Not overly used or easily “jammed” Year-round sales stability Available research/audit and retailers
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Why New Products Fail No discernible benefits
Poor match between features and customer desires Overestimation of market size Incorrect positioning Price too high or too low Inadequate distribution Poor promotion Inferior product
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Where is E-Comm Going to Grow?
Degree of Consideration Low High Magazines Recorded Music Flowers Books Business Supplies Abrasives Financial Services Travel Software PCs Industrial Machinery Efficiency of the On-Line Sales Channel Low High Where is E-Comm Going to Grow? Paper Goods Hand Tools Consumer Electronics Food, Drink Medicine Clothes House Paint Home Appliances Furniture Source: Forrester Research Banners Only Micro-Site Destination Site
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Success Factors Factors in Successful New Products
Match between product and market needs Unique but superior product Benefit to large number of people Factors in Successful New Products
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Categories of Adopters
Laggards Late Majority Early Majority Early Adopters Innovators Categories of Adopters in the Diffusion Process
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Product Life Cycle Time Dollars Product Category Profits
Category Sales Introductory Stage Growth Maturity Decline
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Product Characteristics and the Rate of Adoption
Trialability Observability Relative Advantage Compatibility Complexity Product Characteristics Predict Rate of Adoption
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Marketing Strategies for PLC
INTRODUCTION GROWTH MATURITY DECLINE Product Strategy Distribution Promotion Pricing Limited models Frequent changes More models Frequent changes. Large number of models. Eliminate unprofitable models Limited Wholesale/ retail distributors Expanded dealers. Long- term relations Extensive. Margins drop. Shelf space Phase out unprofitable outlets Awareness. Stimulate demand.Sampling Aggressive ads. Stimulate demand Advertise. Promote heavily Phase out promotion Higher/recoup development costs Fall as result of competition & efficient produc- tion. Prices fall (usually). Prices stabilize at low level.
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Diffusion Process and PLC Curve
Innovators Early adopters Early majority Late majority Laggards Product life cycle curve Diffusion Introduction Growth Maturity Decline Sales
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