Chapter Nine New-Product Development and Product Life-Cycle Strategies

New-Product Development and Product Life-Cycle Strategies Topic Outline New-Product Development Strategy New-Product Development Process

New-Product Development Strategy Two ways to obtain new products Acquisition refers to the buying of a whole company, a patent, or a license to produce someone else’s product New product development refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development

New-Product Development Process Major Stages in New-Product Development

New-Product Development Process Idea generation to create a large number of ideas is the systematic search for new-product ideas 2) Idea Screening to reduce the number of ideas Idea screening helps spot good ideas and drop poor .

New-Product Development Process 3) Concept Development and Testing Product idea is an idea for a possible product that the company can see itself offering to the market Product concept is a detailed version of the idea stated in meaningful consumer terms Product image is the way consumers perceive an actual or potential product

New-Product Development Process 3) Concept Development and Testing Concept testing refers to testing new-product concepts with groups of target consumers

New-Product Development Process 4) Marketing Strategy Development A description of the target market; the planned value proposition; and the sales, market share, and profit goals for the first few years. Outline of the product’s planned price, distribution, and marketing budget for the first year. Description of the planned long-run sales, profit goals, and marketing mix strategy.

New-Product Development Process 5) Business analysis involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives 6) Product Development In product development, R&D or engineering develops the product concept into a physical product.  

New-Product Development Process 7) Test Marketing is the stage at which the product and marketing program are introduced into realistic market settings It tests the product and its entire marketing program– targeting and positioning strategy, advertising, distribution, pricing, branding, packaging and budgeting 8) Commercialization It will introduce the new product into the market