New Product Dev444

8/14/2019 New Product Dev444

1/38

Ashish Pillai IBS Chandigarh


2/38


New to theWorld

New Product

LinesAdditions

Improvement

s Re-positionings

Cost

Reductions


3/38



4/38

Simple: Listen to your customers,intermediaries and other externalassociates carefully

To create successful new products,the company must:

Understand its customers, markets andcompetitors

Develop products that deliver superior



5/38

Overestimation of Market Size

Product Design Problems

Product Incorrectly Positioned, Pricedor Advertised

Costs of Product Development

Competitive Actions



6/38

Shortage of ideasFragmented markets

Social and governmental constraints

Cost of development

Capital shortages

Faster required development time

Shorter product life cycles



7/38



8/38

The key to idea generation isinteracting with customers andconsumers regularly

Attribute listing

Forced relationshipsMorphological analysis

Reverse assumption analysis

New contexts

Mind mapping

Surveys

Brainstorming



9/38


10/38



11/38



12/38

Product idea Product concept Categoryconcept Brand conceptConcept testing

Communicability and believability

Need levelGap level

Perceived value

Purchase intention

User targets, purchase occasions, purchasingfrequency

Conjoint analysis: A statistical technique inwhich respondents' utilities or valuations of

attributes are inferred from the preferences theyex ress for various combinations of these



13/38

Target markets size, structure, andbehavior

Planned price, distribution, andpromotion for the first year

Long-run sales and profit goals andmarketing-mix strategy over time



14/38

The idea may be great and the conceptmay be well appreciated, but at the endthe idea should be a sound businessproposal

Costs & profits

Breakeven analysis and risk analysis



15/38

Prototype:The first physical form or servicedescription of a new product, still in rough ortentative mode

With complex products, there may becomponent prototypes as well as onefinished prototype.

On services, the prototype is. simply the firstfull description of how the service will work,and comes from the systems design ordevelopment function.



16/38

The new product and its marketing planare tested together in the market.

A market test simulates the eventual

marketing of the productSales-Wave Research

Simulated Test Marketing

Controlled Test Marketing

Test Markets



17/38

When: TimingFirst Entry

Parallel Entry

Late Entry

Where: The geographic strategy ofproduct launch

To Whom: How are planning to take theproduct and message right to the targetsegment?

How: How are you planning to



18/38


AwarenessInterest

Evaluation

Trial

Adoption


19/38

Consumer Characteristics:Thereadiness of the target consumers to try newproducts

New Product Characteristics: How

innovative is the product?Relative advantage

Compatibility

Complexity

Divisibility

Communicability

Organizational Characteristics: If the

new product is a B2B product the



20/38


21/38


S C


22/38

Product line is narrow

Keep prices high (skim) or launchcheap (penetration)

Distribution is selective

Target early adopters - experts

Promotional budget very high

Examples: Home networking, hybrid

cars, HDTV, Blu Ray


Inform, Induce,Distribute

A hi h Pill i IBS Ch di h


23/38

Add more channels - broaderdistribution

Still getting new customers

Watch for me too new entrantsAdvertise in mass media

Compete on features

Examples: Digital cameras (5 year ago),MP3 players


New: Features, Channels,

Flankers, Segments


24/38

A hi h Pill i IBS Ch di h


25/38

Declining sales and declining profits

Late adopters and laggards remain as

customers

Competition is strong and products

have evolved

Cut costs, milk the brand, prepare for


Increase / Maintain /Decrease

Harvest Divest Ashish Pillai IBS Chandigarh


26/38

Is there a difference between aProduct and a Brand?

Do consumers behave differentlytowards brands and products?

Do you think that brands will needdifferent strategies than products?

So. Do you think the life cycle and the

consequent changes required will be


We have already covered the Product LifeCycle. So why do we need to study

Brand Life Cycle all over again?



27/38

According to the American MarketingAssociation: A brand is a name, term,design, symbol, or any other featurethat identifies one seller's good or

service as distinct from those of othersellers

The legal term for brand is trademark.

A brand may identify one item, a familyof items, or all items of that seller

If used for the firm as a whole, the




28/38

BrandA name, term, sign,symbol, design, or acombination of them,intended to identify thegoods or services ofone seller or a group ofsellers and todifferentiate them from

those of competitorsIntangible

E.g. 1: Pepsi / Coke

E.g. 2: Band Aid

ProductAnything that can beoffered to a market forattention, acquisition,use, or consumption andthat might satisfy awant or need

Tangible

E.g. 1: Soda Pop

E.g. 2: Adhesive

bandage




29/38

Think of how you became aware ofthem, why you bought them, why youprefer them, how you feel aboutthem ...

List them as they come to your mind

Chose one brand you are veryfamiliar with :

What does this Brand do for you?

What does it MEAN to you?

How do you relate to it ?




30/38

According to you, who makes thebest cars in the world????? Ans:.

Do you own one?

Have you ever owned one?

Have you ever driven one?

Do you know anybody who owns one?

How do you know .. It is the best?




31/38


Attributes Benefits Values

Culture

User

Personality



32/38

A persona that overlays andincludes the physicalproducts/services

The sum of fundamental valuesand attributes ascribed to it bypeople

The entity that the consumersconstruct from the products

meanings, symbols and images




33/38

A brand is essentially a

container for a costumers

complete experience with

the offer and the company(Sergio Zyman)




34/38


Source : K. L. Keller



35/38

Apparel : 61%

Tobacco : 46%

Food Products : 37%

Transportation Equip : 20%

Primary Metals : 1%

Stone, Clay : 0%

g



36/38

The classical marketing literaturerecognises the following four stagesof brand life cycle:

2.Unbranded Goods

3.Brands as Reference

4.Brands as Personality

5.Brand as Icon

6.Brand as Company

7.Brand as Policy

g



37/38

Unbranded Goods: Commodities &packaged goods; major proportion of goodsin non-industrialized context; minor role inEurope/USA; supplier has power over

consumerBrands as Reference: Brand name oftenname of maker; name used for identification;any advertising support focuses on rational

attributes; name over time becomesguarantee of quality/consistency E.g: Kissan,USHA, Godrej

Brand as Personality: Brand name may be"stand alone"; marketin su ort focuses on

g


38/38

Documents

New Product Dev444