1. Key terms & New product development

2. Learning objectives
Explain how companies find and develop new-product ideas
List and define the steps in the new-product development process and the major considerations in managing this process
Describe the stages of the product life cycle
Describe how marketing strategies change during the product’s life cycle
Discuss two additional product and services issues: socially responsible product decisions and international product and services marketing

3. BASIC MARKETING CONCEPTS
Needs: Basic human requirements
Examples- Food, water, and shelter
Wants: Needs become wants when a person decided a specific item would satisfy a need.
Examples- Specific food items and flavors of drinks
Demand
Willingness to buy
Willingness to pay
Ability to pay

4. BASIC MARKETING CONCEPTS
Product- an offering that can satisfy a need or want
Examples- goods, services, experiences, events, properties, and ideas
Value- the ratio between what the customer gets and what he gives
Value = Benefits ÷ Costs
Benefits- functional and emotional in nature
Costs- monetary, time, and energy related costs

5. BASIC MARKETING CONCEPTS
Satisfaction- A person’s feelings of pleasure or displeasure resulting from comparing a product’s perceived performance to his or her expectations.
Market- A group of buyers and sellers interested in negotiating the terms of purchase or sale of goods or services.

6. BASIC MARKETING CONCEPTS
Marketing- An organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Marketing Management- The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals.

7. BASIC MARKETING CONCEPTS
Marketing Management: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals

8. BASIC MARKETING CONCEPTS
Marketing can be described as an on-going process of:
Discovering and translating consumer needs and desires into products and services
Creating a demand for these products and services
Serving the consumer demand with the help of marketing channels
Expanding the market even in the face of keen competition

9. BASIC MARKETING CONCEPTS
Marketing Mix
Product
Includes product variety, quality, design, features, brand name, packaging, warranties
Price
Includes list price, discounts and payment period
3. Place
Includes distribution channels, coverage, locations, inventory
4. Promotion
Includes advertising, public relations and direct marketing

10. New Product Development Strategies
A firm can obtain new products through
Acquisition
Buying of a whole company, a patent or a license to produce a product owned by another person
New product development
Generating original products, product improvements, product modification, and new brands devised from the firm’s own research and development

11. New Product Development Strategies
To create successful new products, the company must
Understand its customers, markets and competitors
Develop products that deliver superior value to customers
Follow public policy and laws regarding developing products, patents, quality and safety

12. New Product development strategies
New product development can be:
Customer-centered
Sequential
Team-centered
Systematic

13. Customer-centered development
Focusing on finding new ways create more customer-satisfying experiences
Begins and ends with solving customer problems

14. Sequential development
Company departments work closely together individually to complete each stage of the process before passing it along to the next department or stage
Increases control in risky or complex projects
Slower than the other types of development

15. Team-based development
Company departments form multiple cross-functional teams that overlap each other during the product development process to save time and increase effectiveness
Team-based development can be more confusing and increase more tension than sequential
Team-based development is also faster and more flexible than sequential

16. Systematic Development
An innovative approach that collects, reviews, evaluates, and manages new product ideas
Creates an innovation-oriented culture
Yields a large number of new product ideas

17. Reasons for new Product failure
Overestimation of market size
Poor design
Wrong timing
Priced too high
Ineffective promotion
Management influence
High development costs
Competition

18. New product developing process
Idea generation
Idea screening
Concept development and testing
Marketing strategy development
Business analysis
Product development
Test marketing
Commercialization

19. Idea generation Sources of new product ideas Internal External
New idea generation- the systematic search for new product ideas
Sources of new product ideas
Internal
The company’s own formal research & development, management & staff, and entrepreneurial programs
External
Sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms

20. Idea screening
Ideas screening- reviewing new product ideas in order to drop poor ones as soon as possible
Criteria
Market size
Product price
Development time and cost
Manufacturing costs
Rate of return

21. Concept development and testing
Product idea- An idea for a possible product that the company can see itself offering to the marketing
Product concept- A detailed version of the idea stated in meaningful consumer terms
Product image- The way consumers perceive an actual or potential product
Concept testing- Testing new product concepts with groups of target consumers

22. Market strategy development
Market strategy development – the initial marketing strategy for introducing the product to the market
Marketing Strategy Statement
Part 1:
Description of the target market
Product positioning, sales, market share, and profit goals
Part 2:
Price, distribution, and marketing budget
Part 3:
Long term sales, profit goals, and marketing mix strategy

23. International product and service marketing
If attempting to sell a product to an international market, companies need to be mindful about what they are selling and to whom. You will need to change your market strategy.
Examples of challenges that arise
Determining what products and services to introduce in which countries
Whether your should standardize or customize your product to cater to the new area
Packaging and labeling clearly
Following customs, values and laws

24. Business Analysis
Business analysis- the review of the sales, costs, and profits projections to find out whether they satisfy the company’s objectives

25. Product development
Product development- involves the creation and testing of one or more physical versions by the R&D or engineering department
Requires an increase in investment