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The Product Lifecycle and New Product Development. Chapter 10. New Product Development. Definition - the development of original products, product improvements, product modifications, and new brands through the firm’s own R&D efforts.

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The Product Lifecycle and New Product Development

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new product development
New Product Development
  • Definition - the development of original products, product improvements, product modifications, and new brands through the firm’s own R&D efforts.
  • New products can also come from acquisition of other companies, patents, or licenses – e.g. trap-ease .
consumers perspectives on newness exhibit 10 1











Major change

Consumers’ perspectives on Newness (Exhibit 10-1)
new product development1
New Product Development

Importance of New Product Development:

  • Follow changing market demands
  • To remain competitive
  • Keep up with changing technology
  • Replace dying/old products
  • Diversify product offerings to reduce risks
characteristics of successful new products and services
Characteristics of Successful New Products and Services
  • Relative Advantage
  • Compatibility with existing consumption patterns
  • Trialability – The Opportunity for buyer testing
  • Observability – The Chance to see the newness
  • Simplicity of Usage
  • Form groups of 3-4 students. Pick a new product that is less than a 1 year old. How has it become successful/unsuccessful? What was it’s marketing approach?
new product development2
New Product Development

Successful new products:

  • Offer a unique superior product, such as higher quality, new features, or higher value in use
  • Have a well-defined (and tested) product concept, before development investment is made

New products fail at a high rate due to:

  • Market size may have been overestimated
  • Poor quality or design
  • Incorrect positioning, pricing, or promotion (i.e., trap-ease)
new product development3
New Product Development

Generally a five step process:

1. Idea generation

2. Screening of ideas

3. Business analysis

4. Prototype development

5. Commercialization

what s happening
What’s Happening?


understanding the product lifecycle
Understanding the Product Lifecycle
  • Product life cycle (PLC):the course of a product’s sales and profits over its lifetime
  • Interesting idea, developed in the 1950’s, still here!

The product lifecycle has four stages:

  • Introduction
  • Growth
  • Maturity
  • Decline
product life cycle strategies
Product Life-Cycle Strategies
  • Introduction:slow sales growth, profits still negative due to high costs of development and product launch
  • Growth:rapid sales growth and profits
  • Maturity:sales slow down, profits decline due to competition
  • Decline:sales and profits fall as product is replaced by new alternatives
product life cycle illustrated
Product Life-Cycle - Illustrated



















maturity stage strategy
Maturity Stage Strategy
  • Modifying the product.
    • Changing characteristics such as quality, features or style to attract new users and to inspire more usage.
  • How?
    • Improve durability, reliability, speed, taste.
    • Improve styling and attractiveness.
    • Add new features.
    • Expand usefulness, safety, convenience.
maturity stage strategy1
Modifying the market.

Increase the consumption of the current product.


Look for new users and market segments.

Reposition the brand to appeal to larger or faster-growing segment.

Look for ways to increase usage among present customers.

Modifying the marketing mix.

Improving sales by changing one or more marketing mix elements.


Cut prices.

Launch a better ad campaign.

Move into larger market channels (distribution).

Offer new or improved services to buyers.

Maturity Stage Strategy
special life cycles

Basic and distinctive mode of expression

Once accepted, popularity will vary over time


A currently accepted or popular style

Gains acceptance, peaks, then declines

Tend to go in cycles with generations


Gain rapid acceptance, peak early, and decline quickly

Tend to attract limited market

Products that are novel and do not address basic needs

Special Life Cycles
length of the product life cycle
Length of the Product Life Cycle
  • Ranges from a few weeks to decades.
  • Length of individual stages varies from one product category to the next (Hershey chocolate).
  • Stages of any given life cycle usually last for different periods.
  • Some products make several different entrances and exits through the Product Life Cycle – examples?.
adoption processes


Adoption processes
  • Awareness
  • Interest
  • Evaluation
  • Trial
  • Adoption
expansion strategies
Expansion Strategies
  • Product line extension
    • Item added to an existing product line
  • Product category extension
    • New item or new line of items in a product category
  • Cannibalize
    • To eat into the sales revenues of another product item in the same line