Slide 9.1
it’s good and
good for you
Chapter 9a
Developing new products and managing the product life cycle
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.2
New product development and
product life-cycle strategies
Topic outline
•
•
•
•
•
New product development strategy
New product development process
Managing new product development
Product life-cycle strategies
Additional product and service
considerations
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.3
New product development strategy
Two ways to obtain new products
Acquisition refers to the buying of a whole company, a patent or a license to produce someone else’s product.
New product development refers to the development of original products, product improvements, product modifications and new brands through the firm’s own product development efforts.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.4
New product development
process Major stages in new product development
Figure 9.1
Major stages in new-product development
The Essay on Product Development And Standardization
New Product * It can be a replacement product for some but imitative to the other. Classification of New Product 1. Innovative Product * These product were created upon realization of an unanswered need in the market which has not been fulfilled by any substitutes. 2. Replacement Products * Those with significant difference from existing products. 3. Imitative Products * These are product new to ...
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.5
New product development
process (Continued)
Idea generation
Idea generation is the systematic search for
new product ideas.
Sources of new product ideas
• Internal
• External
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.6
New product development
process (Continued)
Idea generation
Internal sources refer to the company’s own formal research and development, management and staff,
and intrapreneurial programs.
External sources refer to sources outside the company such as customers, competitors, distributors, suppliers and outside design firms.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.7
New product development process
(Continued)
Crowdsourcing
Inviting broad communities of people— customers, employees, independent scientists and researchers and even the
public at large—into the new product innovation process.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.8
New product development process
(Continued)
Idea screening
• Identify good ideas and drop poor ideas.
• R-W-W screening framework:
– Is it real?
– Can we win?
– Is it worth doing?
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.9
New product development process
(Continued)
Concept development and testing
Product idea is an idea for a possible product that the company can see itself offering to
the market. Product concept is a detailed version of the idea stated in meaningful consumer terms. Product image is the way consumers perceive an actual or potential product.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education
Limited 2013
Slide 9.10
New product development process
(Continued)
Concept development and testing
Concept testing refers to testing new product
concepts with a group of target consumers
The Essay on Product Development
This paper will discuss the generic product development process. The product development process represents the basic sequence of steps or activities that a firm employs to conceive, design, and bring a product to market (Jacobs & Chase, 2011). The process consists of six phases. Many of the phases involve intellectual activities rather than physical activities. Many firms use the generic ...
to find out if the concepts have strong
consumer appeal.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.11
New product development process
(Continued)
marketing strategy development
• Marketing strategy development involves
designing an initial marketing strategy for a
new product based on the product
concept.
• Marketing strategy statement includes:
– Description of the target market
– Value proposition
– Sales and profit goals.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.12
New product development process
(Continued)
Marketing strategy development
Business analysis involves a review of the
sales, costs and profit projections to find
out whether they satisfy the company’s
objectives.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.13
New product development process
(Continued)
Marketing strategy development
Product development
•
•
•
Involves the creation and testing of one or
more physical versions by the R&D or
engineering departments.
Requires an increase in investment.
Shows whether the product idea can be
turned into a workable product.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.14
New product development process
(Continued)
Marketing strategy development
Test marketing is the stage at which the
product and marketing program are
introduced into more realistic marketing
settings.
Provides the marketer with experience in
testing the product and entire marketing
program before full introduction.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
The Essay on Japans Global Competitive Marketing Strategy
Japan's Global Competitive Marketing Strategy It takes more and more to successfully compete in the modern age. The prosperous company or even the state of the world is now determined not only by the high quality services or goods but rather by how efficiently does the enterprise sell and distribute them. The particular success and rapid growth of the Japanese economy is partially explained by ...
Slide 9.15
New product development process
(Continued)
Types of test markets
Standard test markets
Controlled test markets
Simulated test markets
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.16
New product development process
(Continued)
Marketing strategy development
• Advantages of simulated test markets
– Less expensive than other test methods
– Faster
– Restricts access by competitors.
• Disadvantages
– Not considered as reliable and accurate due
to the controlled setting.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.17
New product development process
(Continued)
Marketing strategy development
When firms test
market
• New product
with large
investment
• Uncertainty
about product
or marketing
program
When firms may
not test market
• Simple line
extension
• Copy of
competitor
product
• Low costs
• Management
confidence
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.18
New product development process
(Continued)
Marketing strategy development
Commercialisation is the introduction of the
new product
• When to launch
• Where to launch
• Planned market rollout
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.19
Managing new product
development
Successful new product development should
be:
• customer-centred
• team-based
• systematic.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.20
Managing new product
development (Continued)
New product development strategies
Customer-centred new product development:
new ways to solve customer problems and
create more customer satisfying experiences.
The Essay on Branding in Product Marketing
Short explanation of why brands have become a critical issue in product marketingBrand is defined as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers. Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting ...
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.21
Managing new product
development (Continued)
New product development strategies
Sequential new product development: company departments work closely together individually to complete each stage of the process before passing it along to the next department or stage.
• Increased control in risky or complex
projects but may be slow.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.22
Managing new product
development (Continued)
New product development strategies
Team-based new product development:
Various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.23
Managing new product
development (Continued)
New product development strategies
Systematic new product development:
innovative development approach that collects,
reviews, evaluates and manages new product
ideas.
• Creates an innovation-oriented culture.
• Yields a large number of new product ideas.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.24
Product life-cycle strategies
Product life cycle
Figure 9.2
Sales and profits over the product’s life from inception to decline Kotler et
al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.25
Product life-cycle strategies
(Continued)
• Product development
– Sales are zero and investment costs mount.
• Introduction
– Slow sales growth and profits are nonexistent.
• Growth
– Rapid market acceptance and increasing profits.
• Maturity
– Slowdown in sales growth and profits level off or
decline.
• Decline
The Essay on Marketing Mang KOtler test bank ch cosumer
Chapter 6 – Analyzing Consumer Markets and Buyer Behavior True/False Questions 1. Whirlpool uses staff anthropologists to determine how exotic cultures do their laundry. False (easy) p. 111 2. Culture is the most fundamental determinant of a person’s wants and behavior. True (moderate) p. 112 3. Social classes are relatively heterogeneous and enduring divisions in a society. False (difficult) p. ...
– Sales fall off and profits drop.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.26
Product life-cycle strategies
(Continued)
Figure 9.3
Styles, fashions and fads
Kotler et al., Principles of Marketing, 6th edition © Pearson Education
Limited 2013
Slide 9.27
Product life-cycle strategies
(Continued)
Fads are temporary periods of unusually
high sales driven by consumer
enthusiasm and immediate product or
brand popularity.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.28
Product life-cycle strategies
(Continued)
Introduction stage
• Slow sales growth
• Little or no profit
• High distribution and promotion expense.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.29
Product life-cycle strategies
(Continued)
Growth stage
•
•
•
•
•
•
Sales increase
New competitors enter the market
Price stability or decline to increase volume
Consumer education
Profits increase
Promotion and manufacturing costs gain
economies of scale.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.30
Product life-cycle strategies
(Continued)
Maturity stage
•
•
•
•
•
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D to
support sales and profits.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education
Limited 2013
Slide 9.31
Product life-cycle strategies
(Continued)
Maturity stage modifying strategies
• Market modifying
• Product modifying
• Marketing mix modifying
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.32
Product life-cycle strategies
(Continued)
Decline stage
• Maintain the product
The Term Paper on Marketing Management 2
Chapter 1 Defining Marketing for the 21st Century Five basic markets & their connecting flows Figure 1.1 Marketing Management - An Asian © Kotler, Keller, Ang, of Perspective Structure Leong & Flows in a Modern Exchange Economy Tan 4th Edition International Executive MBA PGSM Page I.01 MARKETING MANAGEMENT Figure 1.2 A Simple Marketing System © Kotler, Keller, Ang, Leong & Tan ...
• Harvest the product
• Drop the product
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.33
Additional product and service
considerations
Product decisions and social
responsibility
Public policy and regulations regarding
developing and dropping products,
patents, quality and safety.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
Slide 9.34
Additional product and service
considerations (Continued)
International product and
service marketing—challenges
• Determining what products and services to
introduce in which countries
• Standardisation versus customisation
• Packaging and labelling
• Customs, values and laws.
Kotler et al., Principles of Marketing, 6th edition © Pearson Education Limited 2013
