Mkt401 MM Week 15

Course Code: MKT401
Course Title: Marketing Management
Lecture : Introducing New Market Offerings
Week No: 15
Reference Book: Marketing Management by Kotler

Keller (14 edition)
Department of Business Administration
Contents of Presentation
• What challenges does a company face in developing new products

and services?
• What organizational structures and processes do managers use to
manage new-product development?
• What are the main stages in developing new products and services?
• What is the best way to manage the new-product development
process?
• What factors affect the rate of diffusion and consumer adoption of
newly launched products and services?
Johnson & Johnson Emphasizes New
Product Development
Categories of New Products
New to the World
New Product Lines
Additions
Improvements
Repositioning
Cost Reduction
The World’s
Most Innovative Companies
• Apple • IBM
• Google • Sony
• Toyota • Wal-Mart
• General Electric • Honda
• Microsoft • Starbucks
• Procter & Gamble • Target
• 3M • BMW
• Walt Disney • Samsung
Seven Notions of Innovation
• See the future through the eyes of your customer
• Intellectual property and brand power are key assets
• Use digital technology to create tools for customers
• Build a championship team
• Innovation is a state of mind
• Speed is critical, so push your organization
• Partner up if you’re not the best
Factors That Limit New Product Development
• Shortage of ideas
• Fragmented markets
• Social and governmental constraints
• Cost of development
• Capital shortages
• Faster required development time
• Shorter product life cycles
Table 20.4 Finding One Successful
New Product
What is a Venture Team?
A venture team is a cross-functional group charged
with developing a specific product or business;
intrapreneurs are relieved of other duties and provided
a
budget and time frame.
Criteria for Staffing Venture Teams
•Desired team leadership style
•Desired level of leader expertise
•Team member skills and expertise
•Level of interest in concept
•Potential for personal reward
•Diversity of team members
Figure 20.2 The New Product
Development Decision Process
Ways to Find Great New Ideas
• Run informal sessions with customers

• Allow time off for technical people to putter on pet
projects
• Make customer brainstorming a part of plant tours
• Survey your customers
• Undertake “fly on the wall” research to customers
More Ways to Find Great Ideas
• Use iterative rounds with customers

• Set up a keyword search to scan trade publications
• Treat trade shows as intelligence missions
• Have employees visit supplier labs
• Set up an idea vault
Drawing Ideas from Customers
• Observe customers using product

• Ask customers about problems with products
• Ask customers about their dream products
• Use a customer advisory board or a brand
community of enthusiasts to discuss product
Idea Generation: Creativity Techniques
• Attribute listing
• Forced relationships
• Morphological analysis
• Reverse assumption
analysis
• New contexts
• Mind mapping
Lateral Mapping
• Gas stations + food

• Cafeteria + Internet
• Cereal + snacking
• Candy + toy
• Audio + portable
Variations on Failure
• Absolute product failure

• Partial product failure
• Relative product failure
Table 20.5 Product-Idea Rating Device
Concepts in Concept Development
• Product idea
• Product concept
• Category concept
• Brand concept
• Concept testing
Concept Testing
• Communicability and believability

• Need level
• Gap level
• Perceived value
• Purchase intention
• User targets, purchase occasions,
purchasing frequency
Figure 20.6 Utility Functions Based on Conjoint Analysis
Marketing Strategy
• Target market’s size, structure, and behavior

• Planned price, distribution, and promotion for
year one
• Long-run sales and profit goals and marketing-
mix strategy over time
Figure 20.7 Product Life Cycle Sales for Three
Product Types
Table 20.6 Projected Five-Year Cash-Flow Statement (in thousands $)
Product Development
• Quality function deployment
(QFD)
• Customer attributes
• Engineering attributes
Prototype Testing
• Alpha testing
• Beta testing
• Rank-order method
• Paired-comparison method
• Monadic-rating method
• Market testing
Consumer Goods Market Testing
• Sales-Wave Research
• Simulated Test Marketing
• Controlled Test Marketing
• Test Markets
Test Market Decisions
• How many test cities?

• Which cities?
• Length of test?
• What information to collect?
• What action to take?
Timing of Market Entry
• First entry
• Parallel entry
• Late entry
Criteria for Choosing Rollout Markets
• Market potential
• Company’s local reputation
• Cost of filling pipeline
• Cost of communication media
What is Adoption?
• Adoption is an individual’s decision to become a regular user

of a product.
Stages in the Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
Figure 20.6 Adopter Categorization
Characteristics of an Innovation
• Relative advantage
• Compatibility
• Complexity
• Divisibility
• Communicability
Marketing Debate
 Who should you target with new products?

• Take a position:
1.Consumer research is critical to new-product development.
or
2.Consumer research may not be all that helpful in new-product development.
Marketing Discussion
Think about the last new product you bought.
How do you think its success will be affected by the

five characteristics of an innovation?
Reference No. 01 Topic: Categories of New Products
Reference No. 02 Topic: Venture Team
Reference No. 03 Topic: Idea Generation & Lateral Mapping
Reference No. 04 Topic: Concept Development & Marketing Strategy
References / Resources
1. P.Kotler, and K.Keller (2012). Marketing Management, New jersey, United State America:
Pearson Education , Chapter No.20, Introducing New Market Offerings , Page No.566-593.
2. Retrieved from : https://www.scribd.com/doc/38117810/CH-20-Introducing-New-

Market-Offerings
3. Retrieved from : http://www.managementparadise.com/forums/marketing-

management-rm-im/22848-introducing-new-market-offerings.html
4. Retrieved from : https://prezi.com/tzmunjn4ei8z/ch-20-introducing-new-market-

offerings/

Mkt401 MM Week 15

Uploaded by

Copyright:

Available Formats

Mkt401 MM Week 15

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mkt401 MM Week 15

Uploaded by

Copyright:

Available Formats

Course Code: MKT401

Course Title: Marketing Management

Lecture : Introducing New Market Offerings

Reference Book: Marketing Management by Kotler

• What challenges does a company face in developing new products

New Product Lines

• Run informal sessions with customers

• Use iterative rounds with customers

• Observe customers using product

• Gas stations + food

• Absolute product failure

• Communicability and believability

• Target market’s size, structure, and behavior

• How many test cities?

• Adoption is an individual’s decision to become a regular user

 Who should you target with new products?

Think about the last new product you bought.

How do you think its success will be affected by the

2. Retrieved from : https://www.scribd.com/doc/38117810/CH-20-Introducing-New-

3. Retrieved from : http://www.managementparadise.com/forums/marketing-

4. Retrieved from : https://prezi.com/tzmunjn4ei8z/ch-20-introducing-new-market-

You might also like