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Chapter 6 Generate Two Billion Product Ideas and Choose the Best One

Chapter 6 Generate Two Billion Product Ideas and Choose the Best One. Ashley Speegle Carlos Agis Fadi Albahra Lovjot Mashiana Sandeep Singh. Main Topics . Develop New Products Why the Concept Test Doesn’t Work Most Appealing is not Always the Most Profitable

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Chapter 6 Generate Two Billion Product Ideas and Choose the Best One

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  1. Chapter 6 Generate Two Billion Product Ideas and Choose the Best One Ashley Speegle Carlos Agis Fadi Albahra Lovjot Mashiana Sandeep Singh

  2. Main Topics • Develop New Products • Why the Concept Test Doesn’t Work • Most Appealing is not Always the Most Profitable • The Problem With Line Extensions • Why New Products Fail

  3. Develop New Products • Serious thinking or research on the product • Do more Qualitative research • Create Surveys on the product • Know the competitive market • Ask for negative feedback • Estimate costs for the product

  4. Concept Test • Why doesn’t it work? • Sample Limitations • Alternative Possibilities • Ignorance of Costs (marketing mgrs and researchers) • Limited Models

  5. Ways to Reduce Testing Problem • Larger sample of prospects • Expose people to big idea • Present with competing products

  6. The Most Appealing Is The Least Profitable • Consumer appeal for a product does not directly correlate to the successfulness of a business • More Appeal ≠ Profitable - Common Fallacy • Purchase interest and profitability don’t move in the same direction

  7. The Problem with Line Extensions • New shape/flavor/size/color • may take sales away from the company’s existing products. • cannibalize the current brand • Big/Profitable companies do not mind if it cannibalizes its current business (as long as it takes some share away from competitors) • Ultimate question is “Are these incremental sales worth the additional costs?”

  8. The Problem with Line Extensions • Product line extensions may cause a loss in meaning and purpose. • Brand becomes diluted with too many different products • Endorser brand- Add second word to the brand extension • Marriott International- Marriott Hotels & Resort, Courtyard by Marriott, Fairfield Inn by Marriott, Residence Inn by Marriott • The concept that can’t be heard. “We’re doing fine. If it ain’t broke, don’t fix it”. WRONG! • The answer is CHANGE THE FORMULATION!

  9. Why New Products Fail ? ? ? ? ? ? ? ?

  10. Why New Products Fail • Choice of Wrong Target • Every New Product Deserves a Clear and Profitable Target • Weak, Poorly Articulated Positioning • Needs to Set itself Apart from Similar Products • Insufficient Level of New Product Awareness • Must Invest in Communications of Different Types • Insufficient Distribution • Product/Service Dissatisfaction(most important) • Customer Dissatisfaction Means Poor Repeat Purchase Rates and Weak Customer Loyalty

  11. Why New Products Fail • Remaining Failures • Questionable Pricing Strategy • Cannibalizing the Parent Brand • Public Relations Campaign • When the Product itself is not the Reason for Failure • i.e. Poor Customer Service, Employees, Poor Management • Most of the time it can be fixed with adjusting the Marketing Plan • The Gut Approach • Take managements most appealing concept - and introduce it as quickly as possible.

  12. Questions... ?

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