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Introducing New
Market Offerings

Chapter Questions

What challenges does a company face in

developing new products and services?
What organizational structures and processes
do managers use to oversee new-product
development?
What are the main stages in developing new
products and services?

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Chapter Questions

What is the best way to manage the newproduct development process?

What factors affect the rate of diffusion and
consumer adoption of newly launched
products and services?

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20-3

Categories of New Products

New to the World
Additions
Improvements
Repositionings
Cost reductions
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The Innovation of Wii

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Factors That Limit

New Product Development

Shortage of ideas
Fragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles

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Table 201. Finding One Successful

Product

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What is a Venture Team?

A venture team is a cross-functional group

charged with developing a specific product or
business.

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Criteria for Staffing Venture Teams

Desired team leadership style

Desired level of leader expertise
Team member skills and expertise
Level of interest in concept
Potential for personal reward
Diversity of team members

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Figure 20.1 New-Product

Development Decision Process

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Ways to Find Great New Ideas

Run informal sessions with customers

Allow time off for technical people to putter on
pet projects
Make customer brainstorming a part of plant
tours
Survey your customers
Undertake fly on the wall research to
customers

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More Ways to Find Great Ideas

Use iterative rounds with customers

Set up a keyword search to scan trade
publications
Treat trade shows as intelligence missions
Have employees visit supplier labs
Set up an idea vault

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Drawing Ideas from Customers

Observe customers using product

Ask customers about problems with products
Ask customers about their dream products
Use a customer advisory board or a brand
community of enthusiasts to discuss product

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Demand-First Innovation and

Growth (DIG) Framework
Demand Landscape
Opportunity Space
Strategic Blueprint

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Idea Generation:
Creativity Techniques

Attribute listing
Forced relationships
Morphological analysis
Reverse assumption analysis
New contexts
Mind mapping

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Lateral Mapping

Gas stations + food

Cafeteria + Internet
Cereal + snacking
Candy + toy
Audio + portable

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Table 20.2 Product Idea

Rating Device

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Figure 20.2 Forces Fighting

New Ideas

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Figure 20.3 Product and

Brand Positioning

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Concept Testing

Communicability and believability

Need level
Gap level
Perceived value
Purchase intention
User targets, purchase occasions,
purchasing frequency

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Figure 20.4 Conjoint Analysis

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Figure 20.5 Utility Functions

Based on Conjoint Analysis

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Figure 20.6 Product Life-Cycle

Sales for Three Types of Products

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Table 20.3 Projected Five-Year

Cash Flow Statement

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Prototype Testing

Alpha testing
Beta testing
Rank-order method
Paired-comparison method
Monadic-rating method
Market testing

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Consumer Goods Market Testing

Sales-Wave Research
Simulated Test Marketing
Controlled Test Marketing
Test Markets

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Test Market Decisions

How many test cities?

Which cities?
Length of test?
What information to collect?
What action to take?

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Timing of Market Entry

First entry
Parallel entry
Late entry

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What is Adoption?
Adoption is an individuals decision to
become a regular user of a product.

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Stages in the Adoption Process

Awareness
Interest
Evaluation
Trial
Adoption

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Figure 20.7 Adopter

Categorization on the Basis of
Relative time of Adoption

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20-31

Characteristics of an Innovation

Relative advantage
Compatibility
Complexity
Divisibility
Communicability

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For Review

What challenges does a company face in

developing new products and services?
What organizational structures and processes
do managers use to oversee new-product
development?
What are the main stages in developing new
products and services?

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

20-33

For Review

What is the best way to manage the newproduct development process?

What factors affect the rate of diffusion and
consumer adoption of newly launched
products and services?

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

20-34