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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Prepared byPrepared by
Deborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
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Developing andManaging Products
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Learning ObjectivesLearning Objectives
1.Explain the importance of developing newproducts and describe the six categoriesof new products
2.  Explain the steps in the new-productdevelopment process
3.  Explain the diffusion process through whichnew products are adopted
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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
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Categories of New ProductsCategories 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
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
New-ProductDevelopment ProcessNew-ProductDevelopment Process
New-Product StrategyNew-Product Strategy
Idea GenerationIdea Generation
Idea ScreeningIdea Screening
Business AnalysisBusiness Analysis
DevelopmentDevelopment
Test MarketingTest Marketing
CommercializationCommercialization
New ProductNew Product
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Idea GenerationIdea Generation
Customers
Customers
Employees
Employees
Distributors
Distributors
Competitors
Competitors
R & D
R & D
Consultants
Consultants
Creative Thinking
Creative Thinking
Sources ofNew-ProductIdeasSources ofNew-ProductIdeas
Sources ofNew-ProductIdeasSources ofNew-ProductIdeas
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Business AnalysisBusiness Analysis
ConsiderationsinBusinessAnalysis StageConsiderationsinBusinessAnalysis Stage
ConsiderationsinBusinessAnalysis StageConsiderationsinBusinessAnalysis Stage
Demand
Cost
Sales
Profitability
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
DevelopmentDevelopment
Creation of prototype
Marketing strategy
Packaging, branding, labeling
Manufacturing feasibility
Final government approvals if needed
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9
Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Alternatives to Test MarketingAlternatives to Test Marketing
Single-source research using supermarketscanner data
Simulated (laboratory) markettesting
Online test marketing
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
CommercializationCommercialization
Production
Production
Inventory Buildup
Inventory Buildup
Distribution Shipments
Distribution Shipments
Sales Training
Sales Training
Trade Announcements
Trade Announcements
Customer Advertising
Customer Advertising
Steps inSteps in
Marketing aMarketing a
New ProductNew Product
Steps inSteps in
Marketing aMarketing a
New ProductNew Product
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Categories of AdoptersCategories of Adopters
Laggards
Laggards
Late Majority
Late Majority
Early Majority
Early Majority
Early Adopters
Early Adopters
Innovators
Innovators
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Product Characteristics andthe Rate of AdoptionProduct Characteristics andthe Rate of Adoption
Trialability
Trialability
Observability
Observability
Relative Advantage
Relative Advantage
Compatibility
Compatibility
Complexity
Complexity
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Product Life CycleProduct Life Cycle
PLC HasPLC Has
Implications forImplications for
Sales and ProfitsSales and Profits
At Each StageAt Each Stage
PLC HasPLC Has
Implications forImplications for
Sales and ProfitsSales and Profits
At Each StageAt Each Stage
Introduction
Introduction
Growth
Growth
Maturity
Maturity
Decline
Decline
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Copyright ©2006 by South-Western, a division of Thomson Learning.  All rights reserved
Chapter 9
Diffusion Process and PLC CurveDiffusion Process and PLC Curve
Innovators
Early adopters
Early majority
Late majority
Laggards
ProductProduct
life cyclelife cycle
curvecurve
DiffusionDiffusion
curvecurve
Introduction
Growth
Maturity
Decline
Sales
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