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Chapter 11. Developing New Market Offerings. B2 B CHAPTER 11 - BA 303 sup. Objectives. Challenges in New Product Development (NPD) Organizational Structure & NPD Stages & Management of NPD Diffusion & Adaption of New Products. Why New Products Fail. Poor Product Positioning

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Chapter 11

Developing New

Market Offerings

B2 B CHAPTER 11 - BA 303 sup


Objectives l.jpg
Objectives

  • Challenges in New Product Development (NPD)

  • Organizational Structure & NPD

  • Stages & Management of NPD

  • Diffusion & Adaption of New Products


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Why New Products Fail

  • Poor Product Positioning

  • Vague Consumer Difference

  • “Over Championing”

  • Overestimated Demand

  • Poor Design

  • Poor Marketing Execution

  • High Development Costs

  • Strong Competitive Reaction

  • Remember the 20 clues to NPS


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Challenges in NPD

  • Idea Shortage

  • Fragmented Markets

  • Social & Governmental Constraints

  • Cost

  • Capital Shortage

  • Need for Speed

  • Shorter Product Life Cycles


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Business

Analysis

Concept

Development

and Testing

Product

Development

Idea

Screening

Market

Testing

Commercialization

New Product Development Process

Marketing

Strategy

Development

(sometimes concurrent with product development)

Idea

Generation


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Sales & profits ($)

Introduction

Growth

Maturity

Decline

Time

Sales & Profit Life Cycles


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Probability of

economic

success given

commercialization

Probability of

commercialization

given technical

completion

X

X

=

Overall

probability

of success

20% Probability of Success

Probability

of technical

completion


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CREATIVITY

+

=

SUCCESSFUL

NEW PRODUCTS

EXPLORE FIRST, INNOVATION TEAM- SESSION

ACUMEN


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IDEAS EXPLORE FIRST, INNOVATION TEAM- SESSION

  • A’S & B’S NO C’S OR D’S

  • DECISION MAKERS

  • DRIVER

  • FACILITATOR

  • NO LAME DUCKS

  • NO NOMINAL TITLE HOLDERS

  • INSIDER V OUTSIDER


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IDEAS EXPLORE FIRST, INNOVATION TEAM- SESSION

  • AWAY FROM CAMPUS

  • ROUND TABLE

  • AUDIO VISUAL

  • TAPE RECORD

  • 6-8 PLAYERS & POSITIONING

  • BETTER PART OF THE DAY

  • EARLY IN THE MORNING

  • NEVER ON MONDAY


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IDEAS EXPLORE FIRST, Explore- NO Rules

  • No idea is a bad idea

  • Be creative

  • Take risks

  • No criticism allowed

  • JOHN HEFELY

    KNOWN ELEMENT A + KNOWN ELEMENT B

    = NEW PRODUCT C =

    ACUMEN + CREATIVITY


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DON’T SQUELCH CREATIVITY, Explore- NO Rules

  • THOMAS EDISON

  • CHRISTOPHER COLUMBUS

  • HENRY FORD

  • STATE HOSPITAL ON ARSENAL ST.

  • NATIONAL ACADEMY OF SCIENCE

  • ADMIRAL HULSEY

  • JOHN HEFELY

    KNOWN ELEMENT A + KNOWN ELEMENT B

    = NEW PRODUCT C


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1. Develop Product Ideas into

Alternative Product Concepts

2. Concept Testing - Test the Product

Concepts with Groups of Target Customers

3. Choose the Best One

Concept Development & Testing


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Consumer-Goods Market Testing

Controlled

Test Market

A few stores that have

agreed to carry new

products for a fee.

Simulated

Test Market

Test in a simulated

shopping environment

to a sample of

consumers.

Sales-

Wave

Research

Test offering trail to

a sample of

consumers in

successive

periods.

Standard

Test Market

Water Baby St. Louis

Full marketing campaign

in a small number of

representative cities.


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Whom

When

Product

Price

Place

Promotion

Politics

Where

Commercialization(Introductory Life Cycle)


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34%

Late

majority

34%

Early

majority

13 1/2%

*Early

adopters

16%

Laggards

2 1/2%

Innovators

Adopter Categorization of the Basis of Relative Time of Adoption of Innovations

  • Time (speed) of adoption, diffusion, innovations

  • *opinion leaderRemember our chapter 3 -

  • OPTHALMOLIC (EYE) EXAMPLE


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Characteristics of the Innovation Rate of Adoption

  • Relative advantage

  • Compatibility

  • Complexity

  • Divisibility

  • Communicability


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Remember B2B Product POSITIONING

  • Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the the target market’s mind.


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Remember B2B COMPETIITIVE ADVANTAGE: SOURCE, POSITION, OUTCOMESAND REINVEST

  • US AEROSPACE AND BOEING EXAMPLES

  • UNDERSTANDING CORE COMPETENCIES


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Sales & profits ($)

*Introduction

Growth

Maturity

Decline

Time

*Corresponds with full commercialization

(NPD)

Sales & Profit Life Cycles


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Promotion

High

Low

High

Price

Low

Four IntroductoryMarketing Strategies

Rapid-

skimming

strategy

Slow-

skimming

strategy

Rapid-

penetration

strategy

Slow-

penetration

strategy


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Maturity Stage

  • Market Modification

  • Product Modification

  • Marketing-Mix Modification


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Decline Stage

  • Increase investment

  • Resolve uncertainties - stable investment

  • Selective niches

  • Harvesting

  • Divesting


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Market Evolution

  • Emergence

  • Growth

  • Maturity

  • Decline


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Review

  • Challenges in New Product Development (NPD)

  • Organizational Structure & NPD

  • Stages & Management of NPD

  • Diffusion & Adaption of New Products