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    New Product Development and Product Life-Cycle Strategies: Prof. Ahimpreet Jurrymarketing Managementpgp/Ss/2010-12//Sem1

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    The document discusses new product development and product lifecycles. It describes the common causes of new product failures such as overestimating demand. It then outlines the typical 7 step new product development process used to create successful new products, including idea generation, screening, testing, and marketing strategy development. It also discusses the 4 stages of the product lifecycle - introduction, growth, maturity, decline - and how marketing objectives change across these stages. Finally, it introduces the Boston Matrix for analyzing a company's product portfolio based on market growth and share.

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    New Product Development and Product Life-Cycle Strategies: Prof. Ahimpreet Jurrymarketing Managementpgp/Ss/2010-12//Sem1

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    vishakha_rm2000
    25 views20 pages
    The document discusses new product development and product lifecycles. It describes the common causes of new product failures such as overestimating demand. It then outlines the typical 7 step new product development process used to create successful new products, including idea generation, screening, testing, and marketing strategy development. It also discusses the 4 stages of the product lifecycle - introduction, growth, maturity, decline - and how marketing objectives change across these stages. Finally, it introduces the Boston Matrix for analyzing a company's product portfolio based on market growth and share.

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    The document discusses new product development and product lifecycles. It describes the common causes of new product failures such as overestimating demand. It then outlines the typical 7 step new product development process used to create successful new products, including idea generation, screening, testing, and marketing strategy development. It also discusses the 4 stages of the product lifecycle - introduction, growth, maturity, decline - and how marketing objectives change across these stages. Finally, it introduces the Boston Matrix for analyzing a company's product portfolio based on market growth and share.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    25 views20 pages

    New Product Development and Product Life-Cycle Strategies: Prof. Ahimpreet Jurrymarketing Managementpgp/Ss/2010-12//Sem1

    Uploaded by

    vishakha_rm2000
    The document discusses new product development and product lifecycles. It describes the common causes of new product failures such as overestimating demand. It then outlines the typical 7 step new product development process used to create successful new products, including idea generation, screening, testing, and marketing strategy development. It also discusses the 4 stages of the product lifecycle - introduction, growth, maturity, decline - and how marketing objectives change across these stages. Finally, it introduces the Boston Matrix for analyzing a company's product portfolio based on market growth and share.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 20

    New Product Development and Product Life-Cycle Strategies

    Prof. Ahimpreet JurryMarketing ManagementPGP/SS/201012//SEM1

    Causes of New Product Failures


    Overestimation of Market Size Product Design Problems Product Incorrectly Positioned, Priced or Advertised Costs of Product Development Competitive Actions

    To create successful new products, the company must:


    understand its customers, markets and competitors develop products that deliver superior value to

    customers.

    New Product Development Process


    Idea Generation and Screening Concept Development and Testing

    Marketing Strategy
    Business Analysis Product Development

    Test Marketing
    Commercialization

    New Product Development Process


    Step 1. Idea Generation

    Systematic Search for New Product Ideas Internal sources Customers Competitors Distributors Suppliers

    New Product Development Process


    Step 2. Idea Screening

    Process to spot good ideas and drop poor ones Criteria


    Market Size Product Price Development Time & Costs Manufacturing Costs Rate of Return

    New Product Development Process


    Step 3. Concept Development & Testing
    1. Develop Product Ideas into Alternative Product Concepts

    2. Concept Testing - Test the Product Concepts with Groups of Target Customers

    3. Choose the Best One

    New Product Development Process


    Step 4. Marketing Strategy Development Marketing Strategy Statement Formulation
    Part One - Overall:
    Target Market Planned Product Positioning Sales & Profit Goals Market Share

    Part Two - Short-Term:


    Products Planned Price Distribution Marketing Budget

    Part Three - Long-Term:


    Sales & Profit Goals Marketing Mix Strategy

    New Product Development Process


    Step 5. Business Analysis Step 6. Product Development
    Business Analysis
    Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives

    If No, Eliminate Product Concept

    If Yes, Move to Product Development

    New Product Development Process


    Step 7. Test Marketing

    Standard Test Market


    Full marketing campaign in a small number of representative cities.

    Controlled Test Market


    A few stores that have agreed to carry new products for a fee.

    Simulated Test Market


    Test in a simulated shopping environment to a sample of consumers.

    Product Life Cycle


    Sales and Profits ($) Sales

    Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline

    Introduction Stage of the PLC


    Sales Costs Profits
    Marketing Objectives

    Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus

    Product Price Distribution Advertising

    Build selective distribution Build product awareness among early adopters and dealers

    Growth Stage of the PLC

    Sales
    Costs Profits
    Marketing Objectives

    Rapidly rising sales Average cost per customer

    Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market
    Build intensive distribution Build awareness and interest in the mass market

    Product Price Distribution Advertising

    Maturity Stage of the PLC

    Sales
    Costs Profits
    Marketing Objectives

    Peak sales Low cost per customer

    Product Price Distribution Advertising

    High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits

    Decline Stage of the PLC

    Sales
    Costs Profits
    Marketing Objectives

    Declining sales Low cost per customer

    Product Price Distribution Advertising

    Declining profits Reduce expenditure and milk the brand Phase out weak items
    Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

    The Boston Matrix The Boston Matrix:


    A means of analysing the product portfolio and

    informing decision making about possible marketing strategies Developed by the Boston Consulting Group a business strategy and marketing consultancy in 1968 Links growth rate, market share and cash flow

    The Boston Matrix

    Classifies Products into four simple

    categories: Stars products in markets experiencing high growth rates with a high or increasing share of the market - Potential for high revenue growth

    The Boston Matrix

    Cash Cows:
    High market share
    Low growth markets

    maturity stage of PLC Low cost support High cash revenue positive cash flows

    The Boston Matrix


    Dogs:
    Products in a low growth

    market Have low or declining market share (decline stage of PLC) Associated with negative cash flow May require large sums of money to support

    Is your product starting to embarrass your company?

    The Boston Matrix Problem Child:


    - Products having a low

    market share in a high growth market - Need money spent to develop them - May produce negative cash flow - Potential for the future?

    Problem children worth spending good money on?

    High

    The Boston Matrix


    Problem Children Stars

    Market Growth

    Dogs

    Cash Cows

    Low

    Market Share High

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