planning for new products
DESCRIPTION
strategic marketingTRANSCRIPT
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Planning for new products
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Types of new productsTransformational innovationSubstantial innovationIncremental innovation
New product planning as customer driven process
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FINDING CUSTOMER VALUE OPPORTUNITIES
Customer value analysisObjective is to identify needs
for:
1. New products
2. Improvements to existing products
3. Improvements in production processes
4. Improvements in supporting services
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CustomerExpectations
CustomerSatisfaction Gap
ActualProductPerformance
OPPORTUNITIES
(1) New Products(2) Improvements(3) New and Improved Processes
Finding new product opportunities
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Characteristics of Successful Innovators
STRATEGIC INITIATIVES
Creating an Innovative Culture
Leveraging
Capabilities
Selecting the Right
Innovation Strategy
Developing and Implementing Effective New
Product Processes
Making Resource Commitments
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Creating an Innovation Culture
Innovation Workshop for top executives to develop an innovation plan. Innovation Statement highlighting objectives and senior management’s role and responsibilities. Training programs for employees and managers. Communicate the priority of innovation. Speakers to expose employees to innovation authorities.
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The Innovation Strategy Spells Out Management’s Priorities for New Product Opportunities
1. Set specific New Product Objectives.2. Communicate the role of New Products
throughout the organization.3. Define the areas of strategic focus:
Product ScopeMarketsTechnologies
4. Include longer term discontinuous projects in the portfolio along with incremental projects.
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CustomerNeeds
Analysis
BusinessAnalysis
Screeningand
EvaluationIdea
Generation
MarketingStrategy
Development
ProductDevelopment
Testing
Commercialization
NEW PRODUCT PLANNING PROCESS
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Ranges from incremental improvement to breakthrough products
Sources-R&D, Employees, Customers, Competitors, Outside inventors,
Acquisition and Value chain members
Methods of Idea GenerationSearch- companies that seek to sell ideas that they do not wish
to commercialize, news sources, trade publicationsMarketing research- survey of product users, FGD, advisory
panel where experienced users provide ideasInternal and external development- internal R&D, external
government and private laboratories, small high technology firms
Other Idea Generation Methods – incentives to employees, acquiring firms
IDEA GENERATION
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IDEA GENERATION
SCREENING(fit/feasibility)
CONCEPT EVALUATION
BUSINESS ANALYSIS
SCREENING, EVALUATING, AND BUSINESS ANALYSIS
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Screening- to fit with company mission and objectivesCommercial feasibility
Concept EvaluationTo obtain a reaction to proposed productCueCat scanner failure
Business AnalysisEstimates the commercial performance of proposed productRevenue forecastPreliminary Marketing PlanCost EstimationProfit ProjectionsOther Considerations – risk associated with the venture,
cannibalization of existing products etc
SCREENING, EVALUATING, AND BUSINESS ANALYSIS
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After business analysis, company decides to abort or implement the proposed product and makes a prototype.
Product Development Process:Product Specifications- describe what the product
will doIndustrial Design- ease-of-use and style of productsPrototype- initial physical product built for testingUse Tests- to obtain feedback from usersProcess Development- process to develop product on
a commercial scaleCollaborative Development- done to increase the
distinctive capability and reduce the time required to develop and market new products
Product and process development
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Marketing Strategy Decisions Market Targeting Positioning Strategy- packaging, distribution strategy, price strategy
Market Testing Options Simulated Test Marketing – recruit buyers while they are shopping Scanner – Based Test Marketing- recruited panel members
purchases are monitored through cameras Conventional Test Marketing- city based testing which is later
projected to entire region Testing Industrial Products- testing for industrial products in 1 or 2
cities Selecting Test Sites- population size, per capita income, purchasing
habits etc Length of the Test- longer the test, more accurate the results External Influences- competitor influence
MARKETING STRATEGY AND MARKET TESTING
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The Marketing Plan
Complete marketing strategy
Coordinated with people and business functions
Timing and geographical scope of launch
Monitoring and Control
Real – time tracking through store audits
Role of the Internet- online communities
Include product performance metrics with performance targets
COMMERCIALIZATION
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Technology Push Processes
Ink jet technology by HP
Platform Products
Leverage platform to develop other products
Process – Intensive Products
Produce products that utilize the organizations process capabilities
Customized Products
Structured and detailed development process to meet the customers need
Proactive cannibalization
Threat to market share of organizations existing products
Proactive cannibalization is essential- britannica encyclopedia vs CD
VARIATIONS IN THE GENERIC NEW PRODUCT PLANNING
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To Innovate or Imitate? Entry Strategy and the Role of Market Research
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First, from a technology development standpoint, it would seem reasonable that imitation is “easier” than innovation.
Second, An incumbent facing the threat of rival entry would likely consider innovating.
Third, duopoly profit and consumer reaction
Decision to innovate or imitate
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Line of action and Payoffs:
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Result 1: As duopoly profits π0 increase, under an entrant imitation strategy, both firms increase their R&D level, but under an entrant innovation strategy, the incumbent increases its R&D level and the entrant decreases its R&D level.
Result 2: As monopoly profits π1 increase, under an entrant imitation strategy, the incumbent increases its R&D level, whereas the entrant decreases its R&D level, and under an entrant innovation strategy, both firms increase their R&D levels.
Imitation- R&D of incumbent increases, entrant decreasesInnovation- R&D of both increase
Results:
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