Chapter 8 Flashcards
Developing new products
Through firm’s own research and development efforts
Creating successful new products requires
- understanding consumers, markets, and competitors
- developing products that deliver superior value to customers
Developing new products
Important for customers bc it brings new solutions
Important for companies as key source of growth
Major stages in new product development
- Idea generation
- Idea screening
- Concept development and testing
- Marketing strategy development
- Business analysis
- Product development
- Test marketing
- Commercialization
Idea generation
Systematic search for new product ideas
Internal idea sources- R&D and product development teams, internal social networks, intrapteneurial programs
External idea sources- distributors and suppliers, competitors, customers
Crowdsourcing
Idea screening
Spot good ideas and drop poor ones ASAP
Ways of screening new ideas:
- new idea write up reviewed by committee
- Real, win, worth doing (RWW framework)
Concept development
Product idea- idea for possible product that the company can see itself offering to market
Product concept- detailed version of the new product idea stated in meaningful consumer terms
Product image- way consumers perceive an actual or potential product
Concept testing
Testing new product concepts with groups of target consumers
Methods:
- presenting the concepts to consumers symbolically or physically
- asking customers to respond by answering questions about their reactions to the concepts
Marketing strategy development
Three parts of 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
- Develops long run sales, profit goals and marketing mix strategy
Business analysis
A review of sales, costs, and profit projections for a new product
- to find out whether these factors satisfy the company’s objectives
- if you get green light, move into product development
Product development
Developing the product concept into a physical product
- endure that the product idea can be turned into a workable market offering (prototype)
Testing- product testing, safety, compatibility, etc.
Test marketing
Introduces product and its proposed marketing program into realistic market settings
Gives marketers an experience with marketing a product before full introduction
Tests the product and its marketing program
Testing takes time and costs can be high
Alternatives to standard test markets
- controlled test markets
- simulated test markets
Reasons for using alternative test markets
- reducing costs
- speeding up the process
Commercialization
Introducing new product into market
Consider:
When to launch
Where to launch
