1. ELC 310
Day 21

2. Agenda Third Student Case
Terra Lycos by Randy
presentations at least 15 min before class so I may upload to web server
Case studies are tied to proceeding chapters, make sure you discuss the connection
Discussion/lecture New Products

3. Case study Grading rubric
Grade Generation for analysis
Two Components
Instructor Grade for Presenter
60% of Total grade
Instructor Grade for Class Participation
40% of Total Grade
Grading Rubric for Presenter
Demonstrated Mastery of Case Study %
Understanding of How Case Study Fits 30%
Presentation effectiveness %
Quality of PowerPoint %
Grading Rubric for Class Participation
Subjective interpretation %
Grades will be posted Nov 25 & Dec 12

4. Rest of Schedule Today Nov 25 Dec 2 Dec 5 Dec 9 Dec 12 Dec 17 @ 1 PM
Terra Lycos (Randy)
New Products
Nov 25
MarketSoft Corporation (Emlyn)
Communication and Selling
Dec 2
OSRAM Sylvania (Owen)
Pricing and Distribution
Dec 5
Logistics.com A & B (Steve)
Build a Trusting Relationship with Customers
Dec 9
Travelocity (Randy)
The Future of Digital Marketing
Dec 12
Citibank Online (Emlyn)
Dec 1 PM
Quiz #4
Written Case Study & Presentations Due
® Tony Gauvin, UMFK , 2007

5. Overview Introduction Preventing New Product Failures
Proactive Product development
Reactive Product development
Market Research Techniques
Product Life Cycles

6. Introduction
New product development is necessary for continued profitability
Some numbers
74% of new products are weeded out before reaching the marketplace
41% new product failure in marketplace
26%*41% = 10.66% success rate
49.2% of sales of leading companies are from new products

7. Digital failures 90% of Internet companies failed in the marketplace
Vs. 41% for new products
Problem was with new product selection before marketplace
All Internet products went to market
Failed to
Screen, test and do design work before launch
Dot Coms were very expensive concept test.

8. Preventing new product failure
Reasons
Market too small
Poor positioning
Little benefit relative to the competition
Not New/Not different (enough)
Forecasting error
Poor timing
Shift in technology
Change in Customer Tastes

9. Use a Structured Process
Systematic process
Poor projects eliminated
Good projects supported
Top 33.3% of companies use a disciplined project development approach
9 step process from elephantX

10. Proactive Market Development
Driven by Marketing Strategy
Opportunity analysis based on consumer needs
Generate a few high-potential ideas

11. Reactive marketing Strategy
Can Reduce Cost and risks
Reactions to competitive moves
Success based on “sensing” ability & quickness

12. Which to use Prerequisites for Proactive Prerequisites for Reactive
Strong R&D
Marketing Power
Markets rewards
Premium products
Pioneers
Theory T marketing
Prerequisites for Reactive
Firm is flexible and agile
Market
Price is king
No ability to differentiate products
Products do not require much experience
Theory P marketing

13. Market research techniques for proactive
Listening In
Lowers costs of gathering info on customer needs
Requires monitoring of third party “conversation” with consumers
Blogs
Forums
Replace focus groups
Used by GM trucks
Information acceleration
Used for premarket forecasting of High tech products
Prototypes and virtual models
Measure interactions with virtual models
Used by Toyota for Prius

14. Managing Life Cycles 4 phases Diffusion Theory of Innovation
Introduction
Growth
Maturity
Decline
Diffusion Theory of Innovation
Adopt then communicate
Slow start followed by rapid increase
Leads to saturation then decline

15. Marketing actions for Life cycle
Introduction
Advertising and promotion
Stimulate diffusion of innovation
Increase awareness and positive consumer acceptance
Preempt competitors
Pricing is key
Too high  slow sale growth but high margins
Too low  penetrate market but defers profits

16. Marketing actions for Life cycle
Growth
Holding and building market share
Product improvement
More differentiation occurs as competitors enter market
Maturity
Competition intensifies  prices erode
CAC goes up, loyalty more important
Decline phase
Milk profits
Start new product