1. 20 Introducing New Market Offerings 1

2. Chapter Questions  What challenges does a company face in developing new products and services?  What organizational structures and processes do managers use to oversee new-product development?  What are the main stages in developing new products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-2

3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-3 Chapter Questions  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?

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-4 Categories of New Products New to the World Additions Improvements Repositionings Cost reductions

5. The Innovation of Wii Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-5

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-6 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. Table 201. Finding One Successful Product Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-7

8. What is a Venture Team?  A venture team is a cross-functional group charged with developing a specific product or business. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-8

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-9 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

10. Figure 20.1 New-Product Development Decision Process Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-10

11. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-11 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

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-12 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

13. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-13 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

14. Demand-First Innovation and Growth (DIG) Framework Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-14 Demand Landscape Opportunity Space Strategic Blueprint

15. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-15 Idea Generation: Creativity Techniques  Attribute listing  Forced relationships  Morphological analysis  Reverse assumption analysis  New contexts  Mind mapping

16. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-16 Lateral Mapping  Gas stations + food  Cafeteria + Internet  Cereal + snacking  Candy + toy  Audio + portable

17. Table 20.2 Product Idea Rating Device Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-17

18. Figure 20.2 Forces Fighting New Ideas Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-18

19. Figure 20.3 Product and Brand Positioning Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-19

20. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-20 Concept Testing  Communicability and believability  Need level  Gap level  Perceived value  Purchase intention  User targets, purchase occasions, purchasing frequency

21. Figure 20.4 Conjoint Analysis Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-21

22. Figure 20.5 Utility Functions Based on Conjoint Analysis Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-22

23. Figure 20.6 Product Life-Cycle Sales for Three Types of Products Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-23

24. Table 20.3 Projected Five-Year Cash Flow Statement Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-24

25. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-25 Prototype Testing  Alpha testing  Beta testing  Rank-order method  Paired-comparison method  Monadic-rating method  Market testing

26. Consumer Goods Market Testing  Sales-Wave Research  Simulated Test Marketing  Controlled Test Marketing  Test Markets Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-26

27. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-27 Test Market Decisions  How many test cities?  Which cities?  Length of test?  What information to collect?  What action to take?

28. Timing of Market Entry  First entry  Parallel entry  Late entry Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-28

29. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-29 What is Adoption? Adoption is an individual’s decision to become a regular user of a product.

30. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-30 Stages in the Adoption Process Awareness Interest Evaluation Trial Adoption

31. Figure 20.7 Adopter Categorization on the Basis of Relative time of Adoption Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-31

32. Characteristics of an Innovation  Relative advantage  Compatibility  Complexity  Divisibility  Communicability Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-32

33. For Review  What challenges does a company face in developing new products and services?  What organizational structures and processes do managers use to oversee new-product development?  What are the main stages in developing new products and services? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-33

34. For Review  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? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 20-34