MKT 15 Introducing New Market Offerings

New-product development sources

Crossfunctional teams Crowdsourcing Stage-gate systems

ORGANIC GROWTH

DEVELOPMENT OF NEW PRODUCTS FROM WITHIN

5 ADOPTER GROUPS

1) Innovators are technology enthusiasts; they are venturesome and enjoy tinkering with new products. In return for low prices, they are happy to conduct alpha and beta testing and report on early weaknesses. • Early adopters are opinion leaders who carefully search for new technologies that might give them a dramatic competitive advantage. They are less price sensitive and are willing to adopt the product if given personalized solutions and good service support. • Early majority are deliberate pragmatists who adopt the new technology when its benefits have been proven and a lot of adoption has already taken place. They make up the mainstream market. • Late majority are skeptical conservatives who are risk averse, technology shy, and price sensitive. • Laggards are tradition-bound and resist the innovation until the status quo is no longer defensible

STAGES in the Adoption Process

1. AWARENESS—The consumer becomes aware of the innovation but lacks information about it. 2. INTEREST—The consumer is stimulated to SEEK INFOrmation about the innovation. 3. EVALUATION—The consumer considers whether to try the innovation. 4. TRIAL—The consumer tries the innovation to improve his or her estimate of its value. 5. ADOPTION—The consumer decides to make full and regular use of the innovation.

Concept to Strategy

1. Communicability and believability— "Are the benefits clear to you and believable?" If the scores are low, the concept must be refined or revised. 2. Need level— "Do you see this product solving a problem or filling a need for you?" The stronger the need, the higher the expected consumer interest. 3. Gap level— "Do other products currently meet this need and satisfy you?" The greater the gap, the higher the expected consumer interest. Marketers can multiply the need level by the gap level to produce a need-gap score. A high score means the consumer sees the product as filling a strong need not satisfied by available alternatives. 4. Perceived value— "Is the price reasonable in relationship to value?" The higher the perceived value, the higher is expected consumer interest. 5. Purchase intention— "Would you (definitely, probably, probably not, definitely not) buy the product?" Consumers who answered the first three questions positively should answer "Definitely" here. 6. User targets, purchase occasions, purchasing frequency— "Who would use this product, when, and how often?"

New-Product Failure (50-95%)

1. Fragmented markets 2. Social, economic, and government constraints- must meet the requirments 3. Development costs- R&D, 4. Capital shortages- good ideas can`t raise funds for R&D and launch 5. Shorter development time 6. Poor launch timing - Beyonce 7. Shorter PLCs - Rivals are quick to copy success 8. Lack of organizational support - funding

new products development process

1. Idea generation 2. Idea screning 3. concept development and testing 4. Mkt Strategy developmemt 5 Business analysis 6. product development 7. Marketing testing 8. commercialization

Ways to Find New-Product Ideas from customers

1. how c use your product 2. ask about their products with your product 3. Ask about their dream product 4. youth pannels to comment on your companies idas 5. use web sites- share your ideas fo customers 6. form a brand community who will discuss your product 7. encourage customers to change your product

What challenges does a company face in developing new products and services?

1. misinterpreted market research 2. high devel cost 3. poor design 4. overestimate of market 5. incorrect positioning and advirtising

New-Product Options

1.Buy OTHER COMPANIES 2. Buy PATENTS (TECHNOLOGY) from other companies 3.Buy a license or FRANCHISE from another company 4.NEW-to-the-world items 5. IMPROVE existing products

Alpha and Beta testing

1ST Alpha testing involves testing an incomplete or early version 2ND beta testing involves testing a complete and stable system by end users.

Product life cycle

4 stages: 1. INTRODUCTION, 2. GROWTH, 3. MATURITY, 4. DECLINE (LIKE A MAN)

ADOPTION

An individual's decision to become a regular user of a product

What organizational structures and processes do managers use to oversee new-product development?

CATEGORY MANAGER -Product Mngr

sales-wave research

Consumers who initially try the product at no cost are reoffered it, or a competitor's product, at slightly reduced prices. The offer may be made as many as five times (sales waves), while the company notes how many customers select it again and their reported level of satisfaction.

innovation imperative (MAIN THING)

Continuous innovation is a necessity

RAPID PROTOTYPING

Creating COMPUTER design that can be quickly tested and then either discarded or further refined is referred to as

product concept

Detailed version of the new product idea stated in meaningful consumer terms 1. WHO will use my product 2. What primary BENEFIT shall this product provide (taste, nutrition, refreshment, energy?) 3. WHEN will ppl consume this drink - at nite, breakfast etc 1. adults quick nutritious breakfast 2. tasty snack for kids as midday refreshment 3. Health y supplement do drink fr older adults before sleep

New-product success

Incremental innovation vs. (SMALL) disruptive technologies (NEW INNOVATION)

Generating Ideas

Interacting with employees Interacting with outsiders Studying competitors Adopting creativity techniques

Communities of practice

Jill's company decides to set up an online FORUM, which will allow its software developers to post queries and share their ideas and best practices with their peers around the world. Such forms of collaboration are called ________.

VIRTUAL REALITY

SENSORY DEVICES

concept testing

Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

1. Fragmented markets

The market consists of several small to medium-sized companies that compete with each other and large enterprises. And no one is leader. Restaurant in miami

Skunkworks

are informal workplaces, sometimes garages, where intrapreneurial teams work to develop new products Louis works as an artist for a major textile company and created an innovation for producing designs. The company will implement Louis's idea as part of its ________ strategy.

product idea

idea for a possible product that the company can see itself offering to the market

stage gate system

is a step-wise product-research and development model. divide innovation into stages - go, kill, hold, recycle

FOCUS GROUPS

small groups of people who meet with a discussion leader and give their opinions about a product or other matters

conjoint analysis

technique used to understand of the attributes that guide consumer preferences by having consumers compare product preferences across varying levels of evaluative criteria and expected utility (consider 5 new products)

Perceived value

the relationship between a product's or service's benefits and its cost

INNOVATION DIFFUSION PROCESS

the spread of a new idea from its source of invention or creation to its ultimate users or adopters.

CROWDSOURCING

using consumers to develop and market products/ THINKERERS

CREATIVITY TECHNIQUES

• ATTRIBUTE listing. List the attributes of an object, such as a screwdriver. Then modify each attribute, such as replacing the wooden handle with plastic. • FORCED RELATIONSHIP. List several ideas and consider each in relationship to each of the others. In designing new office furniture, for example, consider a desk, bookcase, and filing cabinet as separate ideas. Then imagine a desk with a built-in bookcase or a desk with built-in files or a bookcase with built-in files. • MORPHOLOGICAL ANALYSIS. GET TO THE MARS - BY CAR, PLANE many new solutions. • REVERSE -ASUMPTION analysis. List all the normal assumptions about an entity and then reverse them. Instead of assuming that a restaurant has menus, charges for food, and serves food, reverse each assumption. The new restaurant may decide to serve only what the chef bought that morning, provide some food but charge for the time the person sits at the table, or design an exotic atmosphere and rent the space to people who bring their own food and beverages. • NEW CONTEXTS. Take familiar processes, such as people-helping services, and put them into a new context. Imagine helping dogs and cats with day care service, stress reduction, psychotherapy, funerals, and so on. Instead of sending hotel guests to the front desk to check in, greet them at curbside and use a wireless device to register them. • MIND MAPPING. Start with an idea, such as a car, then think of the next idea that comes up (say Mercedes) and link it to car, then think of the next ASSOCIATION (Germany), and do this with all associations that come up with each new word. Perhaps a whole new idea will materialize