Marketing Charles W. Lamb, Jr. Joseph F. Hair, Jr. Carl McDaniel Slides Created and Designed by Apple Mountain Software, Inc. http://www.apmtnsoft.com
Categories of New Products New-To-The-World New Product Lines Six Categories of New Products Product Line Additions Improvements/Revisions Repositioned Products Lower-Priced Products
New Product Introductions Technology 1.1% Positioning 39.1% New Formulation 47.8% Packaging 8.6% New Market 3.4% Source: Statistical Abstract of the United States (1996), p. 548.
New Product Development Process New Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization New Product
New Product Introductions in 1994 Food 3,883 Beverages 807 Health and Beauty 2,655 Household Products 378 Pet Products 161 Miscellaneous 87 Source: Statistical Abstract of the United States (1996), p. 548.
Why Some New Products Succeed Failure Factors Poor match between product and market needs Overestimation of market size Incorrect positioning Inappropriate price Inadequate distribution Poor promotion Success Factors Good match between product and market needs Adequate target market size Offers a clear, meaningful benefit Distinguishable from substitute products Offers unique, superior value Organizational commitment to new product development
Organization for New Product Development New Product Committee Structures Used to Facilitate New Product Development New Product Department Venture Teams Simultaneous Product Development
The Product Life Cycle Introductory Stage Growth Stage Maturity Stage Decline Stage Product Category Sales Dollars Product Category Profits 0 Time
The Importance of New Products New product 1 New product 2 Sales volume Sales volume Dollars Profits Profits + 0 – Time
Adopters’ Categories ADOPTERS’ CATEGORIES BASED ON INNOVATIVENESS Percentage of Adopters Early Adopters 13.5% Late Majority 34% Early Majority 34% Laggards 16% Innovators 2.5% Time
The Diffusion Process Relationship of the Diffusion Process to the Product Life Cycle Introduction Growth Decline Maturity 100 90 80 70 60 50 40 30 20 10 0 Product life cycle curve Early majority Cumulative Percentage of Adoption Late majority Early adopters Innovators Laggards Diffusion curve Time of Adoption of Innovations
Rate of Adoption Complexity Compatibility Characteristics Affecting New Product Diffusion Relative Advantage Observability Trialability