1
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Prepared
by
Prepared
by
Deborah
Baker
Deborah
Baker
Texas
Christian
University
Texas
Christian
University
9
Developing and
Managing Products
2
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Learning
Objectives
Learning
Objectives
1.
Explain the importance of developing new
products and describe the six categories
of new products
2. Explain the steps in the new-product
development process
3. Explain the diffusion process through which
new products are adopted
3
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Learning
Objectives
(continued)
Learning
Objectives
(continued)
4. Explain the concept of product life cycles
4
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Categories
of
New
Products
Categories
of
New
Products
New-To-The-World
New-To-The-World
New Product Lines
New Product Lines
Product Line Additions
Product Line Additions
Improvements/Revisions
Improvements/Revisions
Repositioned Products
Repositioned Products
Lower-Priced Products
Lower-Priced Products
1
On Line
http://www.newproductworks.com
5
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
New-Product
Development
Process
New-Product
Development
Process
New-Product
Strategy
New-Product
Strategy
Idea
Generation
Idea
Generation
Idea
Screening
Idea
Screening
Business
Analysis
Business
Analysis
Development
Development
Test
Marketing
Test
Marketing
Commercialization
Commercialization
New
Product
New
Product
2
6
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Idea
Generation
Idea
Generation
Customers
Customers
Employees
Employees
Distributors
Distributors
Competitors
Competitors
R & D
R & D
Consultants
Consultants
Creative Thinking
Creative Thinking
Sources
of
New-Product
Ideas
Sources
of
New-Product
Ideas
Sources
of
New-Product
Ideas
Sources
of
New-Product
Ideas
On Line
http://www.ideo.com
2
7
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Business
Analysis
Business
Analysis
Considerations
in
Business
Analysis
Stage
Considerations
in
Business
Analysis
Stage
Considerations
in
Business
Analysis
Stage
Considerations
in
Business
Analysis
Stage
Demand
Cost
Sales
Profitability
2
8
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Development
Development
Creation of prototype
Marketing strategy
Packaging, branding, labeling
Manufacturing feasibility
Final government approvals if needed
2
9
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Alternatives
to
Test
Marketing
Alternatives
to
Test
Marketing
Single-source research using supermarket
scanner data
Simulated (laboratory) market
testing
Online test marketing
2
On Line
http://www.bandaid.com
10
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Commercialization
Commercialization
Production
Production
Inventory Buildup
Inventory Buildup
Distribution Shipments
Distribution Shipments
Sales Training
Sales Training
Trade Announcements
Trade Announcements
Customer Advertising
Customer Advertising
Steps
in
Steps
in
Marketing
a
Marketing
a
New
Product
New
Product
Steps
in
Steps
in
Marketing
a
Marketing
a
New
Product
New
Product
2
11
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Categories
of
Adopters
Categories
of
Adopters
Laggards
Laggards
Late Majority
Late Majority
Early Majority
Early Majority
Early Adopters
Early Adopters
Innovators
Innovators
5
12
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Product
Characteristics
and
the
Rate
of
Adoption
Product
Characteristics
and
the
Rate
of
Adoption
Trialability
Trialability
Observability
Observability
Relative Advantage
Relative Advantage
Compatibility
Compatibility
Complexity
Complexity
On Line
http://www.electronicgadgetdepot.com
5
13
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Product
Life
Cycle
Product
Life
Cycle
PLC
Has
PLC
Has
Implications
for
Implications
for
Sales
and
Profits
Sales
and
Profits
At
Each
Stage
At
Each
Stage
PLC
Has
PLC
Has
Implications
for
Implications
for
Sales
and
Profits
Sales
and
Profits
At
Each
Stage
At
Each
Stage
Introduction
Introduction
Growth
Growth
Maturity
Maturity
Decline
Decline
6
6
14
Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 9
Diffusion
Process
and
PLC
Curve
Diffusion
Process
and
PLC
Curve
Innovators
Early adopters
Early majority
Late majority
Laggards
Product
Product
life
cycle
life
cycle
curve
curve
Diffusion
Diffusion
curve
curve
Introduction
Growth
Maturity
Decline
Sales
6