– Reducing the costs – Speeding up the process
Commercialization
• Introducing a new product into the market
• Considerations for launching a new product
Customer-centered new product development focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.
Customer-Centered New Product Development (2 of 2)
Test Marketing (1 of 3)
• Introduces the product and its proposed marketing program into realistic market settings
• Gives the marketer an experience with marketing a product before full introduction
– Customer-centered new product development – Team-based new product development – Systematic new product development
Customer-Centered New Product Development (1 of 2)
8-3. Describe the stages of the product life cycle and how marketing strategies change during a product’s life cycle.
8-4. Discuss two additional product issues: socially responsible product decisions and international product and services marketing.
– When to launch – Where to launch
▪ Single location, region, national market, or international market
Managing New Product Development
• Requires a holistic approach
Concept Testing
• Testing new product concepts with groups of target consumers
• Methods:
– Presenting the concepts to consumers symbolically or physically
Concept Development (2 of 2)
• Developing a new product into alternative product concepts
– Find out how attractive each concept is to customers – Choose the best one
Figure 8.1 - Major Stages in New Product Development
Idea Generation (1 of 2)
• Systematic search for new product ideas
• Internal idea sources:
– Internal social networks – Intrapreneurial programs
Test Marketing (3 of 3)
• Alternatives to standard test markets
– Controlled test markets – Simulated test markets
• Reasons for using alternative test markets
• External idea sources:
– Distributors and suppliers – Competitors – Customers
Idea Generation broad communities of people into the new product innovation process
Learning Objective 8-1 Summary
• New product ideas from the firm’s own research and development efforts
• External sources include competitor's offerings, ideas from distributors and suppliers, as well as customers themselves
• Creating successful new products requires
– Understanding consumers, markets, and competitors – Developing products that deliver superior value to
customers
– Develops long-run sales, profit goals, and marketing mix strategy
Business Analysis and Product Development
• Business analysis: A review of the sales, costs, and profit projections for a new product
• Product image is the way consumers perceive an actual or potential product.
Concept Development (1 of 2)
This is Tesla’s initial all-electric roadster. Later, more affordable mass-market models will be developed.
– To find out whether these factors satisfy the company’s objectives
• Product development: Developing the product concept into a physical product
– To ensure that the product idea can be turned into a workable market offering
Explain how companies find and develop new product ideas.
New Product Development Strategy
• Developing new products through the firm’s own research and development efforts
– Asking customers to respond by answering questions about their reactions to the concepts
Marketing Strategy Development
• Initial marketing strategy for a new product
First Stop Google: The New Product Moonshot Factory
Google’s innovation machine is renowned for producing new product “moonshots.”
Learning Objective 8-1
• Three parts of the marketing strategy statement:
– Describes the target market, planned value proposition, sales, market-share, and profit goals
– Determines product’s planned price, distribution, and marketing budget
• Tests the product and its marketing program • Testing takes time, and costs can be high.
Test Marketing (2 of 3)
Starbucks quickly introduced a less-than-perfect mobile payments app, then worked out the flaws.
Product Concept
• A product idea is an idea for a possible product that the company can see itself offering to the market.
• A product concept is a detailed version of the new product idea stated in meaningful consumer terms.