1. Marketing Management Dr. K. Elan 1 New product development Chapter 8 Dr. Elan’s personal web page link – http://faculty.ksu.edu.sa/2277400269/Pages/Hom.aspx

2. Marketing Management Dr. K. Elan 2 Companies that excel in developing and managing new products reap big rewards All products die - so developing new products very important New products are a key source to growth New products – –thru acquisition –Own new product development

3. Marketing Management Dr. K. Elan 3 Categories of New Product  New to the world products  New product lines  Additions to existing lines  Improvements to existing products  Repositioning  Cost reductions

4. Marketing Management Dr. K. Elan 4 Challenges in New Product Development New product development essential due to – Changing customer needs and wants New Technologies Shortened PLC Increased domestic and foreign competition “ New product development is expensive and risky” [British - French = Concorde Motorola – Iridium phones] “Failure rate of new products is nearly 90 % through out the world”

5. Marketing Management Dr. K. Elan 5 Hurdles in new product development Shortage of ideas Fragmented markets Social and Government constraints القيود Cost of Development Faster development time Shorter Product Life Cycle’s [PLC]

6. Marketing Management Dr. K. Elan 6 New Product Development Process Stage 1 : Idea فكرة generation تطوير - interaction with others - Creativity techniques [Attribute testing, forced relationships etc.,] Stage 2 : Idea screening تصفية - to drop poor ideas - product ideas are reviewed against a set of criteria. معايير.

7. Marketing Management Dr. K. Elan 7 Stage 3: Concept Development and Testing : a product concept is an elaborated version of the idea expressed in meaningful consumer terms [benefits offered] - state product category [a drink] - state product [instant break fast drink] and brand position Concept testing : presenting the product concept to target consumers and getting their reaction. استجابة [rapid proto typing, virtual reality]

8. Marketing Management Dr. K. Elan 8 Stage 4 : Marketing Strategy - after successful concept testing - a preliminary marketing strategy plan to introduce the new product in the market Part 1 : Target market size, structure, behavior, product positioning, sales, market share and profit goals sought in the first few years Part 2 : Planned price, distribution strategy and marketing budget for year 1

9. Marketing Management Dr. K. Elan 9 Stage 5 : Business Analysis [to identify business attractiveness] Estimating total sales Estimating costs and profits Break even analysis Risk analysis [ROI, Rate of Return]

10. Marketing Management Dr. K. Elan 10 Stage 6: Product Development - Determining whether the product idea can be translated into a technically and commercially التقنية والتجارية feasible product - Prototype النموذج is developed Stage 7: Market Testing اختبار - Singapore in Asian Market - May be a costly exercise - Feedback taken into consideration

11. Marketing Management Dr. K. Elan 11 Stage 8: Commercialization Decide on WHEN, WHERE, TO WHOM, and HOW ?

12. Marketing Management Dr. K. Elan 12 Likely success of product concept: –Product superiority –Economic advantageميزة to user –Overall company fit –Technological compatibility متوافق –Familiarity مألوف to the company –Market need, growth, and size –Competitive situation –Defined opportunity

13. Marketing Management Dr. K. Elan 13 Product Life Cycle & STRATEGIES Stage 1 - Introduction stage Stage 2 - Growth stage Stage 3 - Maturity stage Stage 4 - Decline stage

14. Marketing Management Dr. K. Elan 14 PLC & STRATEGIES Introduction stage oRapid-skimming strategy [high price - high promotion] oSlow-skimming strategy [ high price and low promotion ] oRapid-penetration strategy [low price and high promotion] oSlow-penetration strategy [low price & low promotion]

15. Marketing Management Dr. K. Elan 15 PLC & STRATEGIES Growth stage Improves product quality,styling, add features Add new models Enters new market segment Distribution coverage and new distribution channels Product awareness advertising to product preference advertising Lower prices to price sensitive buyers

16. Marketing Management Dr. K. Elan 16 Maturity stage –Market modification –Product modification –Marketing-mix modification Decline stage –Identify weak products –Determine decline marketing strategies –Drop decision

17. Marketing Management Dr. K. Elan 17