Marketing Chapter 9 Part 2

7 stages in the new-product process leading to success
1.) new product strategy development
2.) idea generation
3.) screening and evaluation
4.) business analysis
5.) development
6.) market testing
7.) commercialization
new product strategy development
identify product’s strategic role in the firm’s business portfolio using SWOT analysis and environmental scanning
idea generation
developing a pool of candidates for new products; internal and external sources (“open innovation”); R&D labs, customer and supplier suggestions( ex. Walmart)
crowdsourcing
generating new product insights leading to actions based on massive #s of people’s ideas; ex. Netflix recommendation system
customer and supplier suggestions
ex. green ketchup
employee suggestions
ex. Nature Valley granola was inspired by an employee
R&D laboratories
firm’s own research and development labs; ex. Apple Industrial Design Group; typically in house so they are less costly
smaller firms, inventors, and universities
ex. someone sold the idea of Bagelfuls to Kraft
internal approach
ex. review by new product development committee
external approach
concept tests with target customers; ex. virtual reality to test a product
3 elements of business analysis
-business fit (is it a good fit with mission goals?)
-assessment of marketing and product synergies
-financial projections (cost of R&D labs, marketing, etc.)
prototype
develop the product concept into a physical product
test marketing
offering a product for sale on a limited basis in a defined area
when test marketing works
service, expensive or industrial products
when test marketing doesn’t work
-high level of security so idea isn’t stolen
-mgmt. is already confident about the product
-costs of developing are low
commercialization
the stage wherein firms introduce the new product into the market
regional rollout
introducing a product sequentially into different areas; common practice to minimize the risk of new product failure
parallel development
speed as factor in new product success; saves time in fast changing industry