New Product Development and Product Life Cycle Strategies

New Product Development and Product Life Cycle Strategies

CHAPTER NINE

97% share in the PC market

40% in the enterprise market

10% in the mobile market

No matter what brand of computer or laptop you have, chances are you are almost certain that you are using a Microsoft product or service (operating system and Intel). In the world of computer and Internet software and technology, Microsoft is one of those who dominate.

Their operating system has a 97% share in the PC market, 40% in the enterprise market and less than 10% in the mobile market.

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Products of Microsoft:

msn.com their internet portal (it is second to Yahoo! Before but now it is third).

Hotmail.com their email portal (used to be also one of the most used in the internet)

Microsoft isnt always the innovator. In fact it has been regard by many as a big fat copy cat.

They bought the original MS/DOS OS and were accused of copying Macintoshs user friendly feel they were also accused of copying Netscapes Internet browser. But it wasnt the innovations that made Microsoft but the brute force use of its PC operating system to monopolized and crush its competitors and muscle in the markets. Because of this, Microsoft has a lot of cash to pump into new products and technologies.

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BIG FAT COPY CAT

Microsoft isnt always the innovator.

In fact it has been regard by many as a big fat copy cat.

They bought the original MS/DOS OS and were accused of copying Macintoshs user friendly feel they were also accused of copying Netscapes Internet browser. But it wasnt the innovations that made Microsoft but the brute force use of its PC operating system to monopolized and crush its competitors and muscle in the markets. Because of this, Microsoft has a lot of cash to pump into new products and technologies.

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But it wasnt the innovations that made Microsoft

but the brute force use of its PC operating system to monopolized and crush its competitors and muscle in the markets.

Because of this, Microsoft has a lot of cash to pump into new products and technologies.

NEW PRODUCT DEVELOPMENT STRATEGY

Given the rapid changes in consumer tastes, technology and competition, companies must have a steady stream of new products and services.

They can obtain new products in two ways:

Acquisition buying the whole company, patent, license to produce someone else product.

New Product Development the development of original products, product improvements, product modifications, and new brands through the firms own R&D efforts.

INNOVATIONS CAN BE RISKY

Many new products fail at an alarming rate; at least 80% of them fail.

Because so many products fail, companies want to know how to improve their products and find what they have in common.

Some studies suggest it depends on the:

Development of a unique superior product (concern about the products features)

Well defined product (concern about the targeting and the positioning).

But innovation can be risky. Many new products fail at an alarming rate; at least 80% of them fail. Because so many products fail, companies want to know how to improve their products and find what they have in common. Some studies suggest it depends on the:

Development of a unique superior product (concern about the products features)

Well defined product (concern about the targeting and the positioning).

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Major Stages in New Product Development

Idea Generation

Idea Screening

Concept Development and Training

Marketing Strategy Development

Business Analysis

Product Development

Test Marketing

Commercialization

Idea Generation

the systematic search for new product idea.

Unconventional strategic ideas.

Internal sources

Bootlegging working projects for their own personal interest that may benefit the company.

Listening to Customers

Competitors

Suppliers and Distributors

Idea Screening

screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible.

Large number of ideas? Reduce it.

Concept Development and Training

Product Idea idea for a possible product

Product Concept detailed version of the idea with user friendly terms

Product Image the way consumers perceived an actual or potential product.

Concept Testing testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.al product

Marketing Strategy Development

design an initial marketing strategy for a new product based on the product concept.

(1) describe the target market, product positioning, sales and profit goals

(2) outline prices of the product and marketing budget for a year

(3) describe the long run sales, profit and goals and marketing mix.

Business Analysis

a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the companys objectives.

Product Development

developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product.

Test Marketing

the stage of new product development where the product and the marketing program are testing in more realistic market settings.

Commercialization

introduction a new product into the market.

Timing of introduction

Where to launch

Market Rollout (for companies with financial constraints)

SPEEDING UP NEW PRODUCT DEVELOPMENT

Sequential product development - a new product approach in where one company department works to complete its stage of the process before passing the new product to the next department or stage.

Simultaneous (team based) product development an approach to developing new products in which various company departments work closely together, overlapping the steps in the product process to save time and increase effectiveness.

PRODUCT LIFE CYCLES STRATEGIES

5 DISTINCT STAGES

Product Development/Research and Development begins when the company finds and develops an idea.

Introduction slow sales growth as the product is introduced in the market.

Growth a period of rapid market acceptance.

Maturity sales grow slow because of its acceptance to majority of the buyers and profits are leveling off.

Decline period where sales fall and drop

PLC FORMS

PLC in

Style a basic and distinctive mode of expression

Fashion a currently accepted or popular style in a given field.

Fad fashions that enter quickly are adopted with great zeal, peak early and decline ver quickly. Enjoy it while it lasts.

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PLC FORMS: STYLE

PLC in

Style a basic and distinctive mode of expression

Fashion a currently accepted or popular style in a given field.

Fad fashions that enter quickly are adopted with great zeal, peak early and decline ver quickly. Enjoy it while it lasts.

21

PLC FORMS: FASHION

PLC in

Style a basic and distinctive mode of expression

Fashion a currently accepted or popular style in a given field.

Fad fashions that enter quickly are adopted with great zeal, peak early and decline ver quickly. Enjoy it while it lasts.

22

PLC FORMS: FASHION

PLC in

Style a basic and distinctive mode of expression

Fashion a currently accepted or popular style in a given field.

Fad fashions that enter quickly are adopted with great zeal, peak early and decline ver quickly. Enjoy it while it lasts.

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