New Product Development
The development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts.
The systematic search for new product ideas.
Inviting broad communities of people — customers, employees, independent scientists and researchers, and even the public at large — into the new product innovation process.
Screening new product ideas to spot good ones and drop poor ones as soon as possible.
A detailed version of the new product idea stated in meaningful consumer terms.
Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.
Marketing Strategy Development
Designing an initial marketing strategy for anew product based on the product concept.
A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.
Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering.
The stage of new product and its proposed marketing program are tested in realistic market settings.
Introducing a new product into the market.
Customer-Centered New Product Development
New product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.
Team-Based New Product Development
New product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.
Product Life Cycle
The course of a product’s sales and profits over its lifetime.
A basic and distinctive mode of expression
A currently accepted or popular style in a given field.
A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.
The PLC stage in which a new product is first distributed and made available for purchase.
The PLC stage in which a product’s sales start climbing quickly.
The PLC stage in which a product’s sales growth slows or levels off.
The PLC stage in which a product’s sales fade away.
Two Major Challenges of the Product Life Cycle
The challenge of new product development; The challenge of product life-cycle strategies.
Ways a Firm can Obtain New Products
Acquisition and New Product Development
Buying a whole company, patent, or a license to produce someone else’s product.
8 Stages of the Product Development Process (In Order)
Idea Generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development,. test marketing, commercialization
Important External Idea Sources
Distributors and Suppliers, Competitors, Customers
An idea for a possible product that the company can see itself offering to the market.
The way consumers perceive an actual or potential product.
First part of the marketing strategy statement
Describes the target market; the planned value proposition; and the sales, market-share, and profit goals for the first few years.
Second part of the marketing strategy statement
Outlines the product’s planned price, distribution, and marketing budget for the first year.
Third part of the marketing strategy statement
Describes the planned long-run sales, profit goals, and marketing mix strategy.
Controlled Test Markets
new products and tactics are tested among controlled panels of shoppers and stores.
First thing a company launching a new product must decide:
Second thing a company launching a new product must decide:
Where to launch the product.
Sequential Product Development Approach
One company department works individually to complete its stage of the process before passing the new product along to the next department and stage.
Limitations of the Sequential Product Development Approach
Can be slow
Limitations of the Team Based New Product Development
Can create more organizational tension and confusion
Five Stages of PLC:
Product Development, Introduction, Growth, Maturity, and Decline