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Water Joe

Water Joe . What caused David to come up with a new product idea? What did he have to do to turn his idea into a real product? What problems did he run into? Have you ever heard of Water Joe?. Developing New Products. Principles of Marketing. What is a “New” Product?.

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Water Joe

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  1. Water Joe • What caused David to come up with a new product idea? • What did he have to do to turn his idea into a real product? • What problems did he run into? • Have you ever heard of Water Joe?

  2. Developing New Products Principles of Marketing

  3. What is a “New” Product? • Simple variation on an existing product is often considered a new product • Repackaging is a very common way of developing a “new” product • Examples: • The Milk Chug • New design of the taillights • New flavor of potato chip

  4. “Really” New Products • Ruffles potato chips (ridges) • PT Cruiser and Hummer • The first Apple home computers • Sony Walkman—first personal portable music device • First cell phones—wireless telephone • First hybrid gas/electric cars • New products are risky, companies prefer to develop variations on current successful products

  5. Risks of New Products • Over 25,000 new consumer products hit the market yearly • Over 75 percent of these fail • Large companies spend $20 million or more to develop, product, advertise, and introduce a new product • Well-known failures: Ford Edsel, New Coke, and McDonald’s Arch Deluxe

  6. Research • Choose a new product on the market or make up a new product. • What are the risks that the manufacturer has taken on with this product?

  7. Eight Steps to New-Product Ideas • Idea Generation • Idea Screening • Business Analysis • Product Design • Production • Test Marketing • Introduction • Evaluation • Larger companies have product development departments • This department works closely with the marketing department

  8. Idea Generation • Observation • Marketers look for unfulfilled customer needs • Customers often present ideas for new products to the company • Salespeople often have new-product ideas because they interact with customers • Marketers watch the competition, sometimes buy their new product, and then decide to make a similar but better product • Observations of companies in other industries

  9. Activity • Group Task: Develop a new pen or other office product, as you learn about new-product development in this chapter • Form groups of three or less • Make a list of what you might need to know to develop a new product • Share your ideas

  10. Idea Generation, con’t. • Research • Analyze products that are returned often; could lead to a new product idea • Survey your customers about their needs and possible new products • Trend research: discover new-product ideas by the trends of society

  11. Idea Generation, con’t. • Creative Thinking • Creativity: the ability to produce something new; often considered a talent • Examples: Auntie Anne's sells pretzels only • Can be developed • Brainstorming • Learning • Questioning • Journaling • Participating in New Activities • Taking a Different Point of View

  12. New-Pen Activity • Do some research by visiting the Web sites of office suppliers such as Office Depot, Office Max, Bic Stationery Products, and Papermate • Compile lists of new pens and office products • What are the new features? • Generate ideas for your new product using the techniques for creativity that you just learned • Write your ideas under each technique heading

  13. Next Two Steps • Idea Screening: • Will customers want and buy the product? • Business Analysis: • Can our company produce and sell the product profitably? • Products must be appropriate to the company’s image, goals, strengths, and resources. • New products should provide a competitive advantage

  14. Business Analysis • New product should: • Be appropriate to the company’s image, goals, strengths, and resources • Jaguar’s image: luxury sports sedans • Fit into the goals of the company • Have a feature that is more satisfying than the competitors’ feature • Fit with the strengths of the company • Jaguar wanted a less expensive vehicle; developed the X-Type • Affordable to produce and market

  15. Product Design • The details of how to produce the product are planned • Goods, services, and ideas should go through a design phase • New product is tried out on a few potential customers • Brand is developed • Name and identity, logo, slogan, packaging

  16. New-Office Product Activity • Decide which product idea to pursue • Write a new-product description • Include target market • Explain their interest • Conduct a business analysis • Determine the materials (make a list) • Include the costs of the materials • Make a prototype?? • Use the information to determine the cost of producing just one pen/office supply

  17. New-Product Activity • Gather information on pricing of similar products • Record information about your competition • Brand names • Descriptions • Prices • What should you price your product? • Compare price to cost—can you make a profit? • Revise your product, if necessary to come up with something that will be profitable

  18. New Product Activity • Review all the information on your product • Answer these questions: • Does my group have the resources needed to make the new product? • Does my group have a competitive advantage over the other groups? • Does the new product fit the goals and personality of my group? • Share your business analysis.

  19. Goods—Product Design • Prototype-working model of the actual product • Experiment with the prototype will determine performance success • Marketers use the prototype to get customers’ responses

  20. New-Pen Activity • Design your new product • Make a drawing or computer creation • Brand name • Logo • Packaging • Plan how to produce your products in large enough quantities to sell • Make a prototype of your product • Create a questionnaire to gather feedback from customers who test the product

  21. Services and Ideas—Product Design • Service providers go through a period of training to learn to perform the service • Plan to provide the service • Physical location, equipment, organizing the system for delivering, and decorations • Trial run: consists of trying out the service on a few selected customers to make sure that everything runs smoothly

  22. Production • Manufacture the product in large quantities • The number to produce is a complex decision with a major impact on the profitability • For services and ideas, production is inseparable from the product itself

  23. Test Marketing • Involves introducing a new product to a small portion of the target market • Can test the entire marketing mix—product, place, price, and promotion • Can test only one element of the marketing mix • Risky because competitors can see your product and copy it • Small companies may not be able to afford test marketing

  24. Introduction • Product actually enters the market • Often called Commercialization • Promotion is critical at this point • Often starts before the product is ready • Release date is the date the product is first available to the market • New products are often released at trade shows (large gathering to display products for sale)

  25. Evaluation • Should we continue to produce the product? • Should we make any changes to the product? • Should we expand the market?

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