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Marketing Research In New Product Development. Jason Burke Stacy Siefer Hari Kodakalla Lucy Powell Richard Warriner. Marketing Research in New Product Development- Why?. Provides direction for development Helps restrain tendency for product-only focus

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marketing research in new product development

Marketing Research In New Product Development

Jason Burke

Stacy Siefer

Hari Kodakalla

Lucy Powell

Richard Warriner

marketing research in new product development why
Marketing Research in New Product Development- Why?
  • Provides direction for development
  • Helps restrain tendency for product-only focus
  • Helps communication between R&D, sales, and marketing
marketing research in product development
Marketing Research in Product Development
  • The marketing research activities associated with new product development are divided into four areas:
    • Strategic issues
    • Marketing research processes/methods
    • Organizational issues
    • Measurement
strategic issues
Strategic Issues
  • The strategic role is to provide marketing information for managing new product risk
  • Top management emphasis on being “customer driven” is required for successful integration on market research into NPD
  • Internal marketing is important to maintain support
  • Investing in experience is a key factor for success
marketing research processes methods
Marketing Research Processes/ Methods
  • Unique marketing research activities are conducted at each stage of the NPD process
  • Flexibility is key
  • Top companies test products/concepts in realistic environment for NPD process
  • Marketing knowledge database provides for organizational learning
relationship of market research r d
Relationship of Market Research R&D

“An Important question to Ponder on “

  • Is R&D independent of Market Research and Vice versa ?

w. r. t Specialty or Performance chemicals companies

e. g. : [ Pharmaceutical Industry ]

some key questions to be asked before embarking npd
Some Key questions to be asked before embarking NPD
  • What strategic roles do we expect new products to fulfill?
  • What are our financial expectations for new product performance?
  • What are our core technological competencies?
  • Are we the leaders in the Market?
  • What criteria will we adopt to objectify issues and to prioritize all subsequent ideas?
  • Do we anticipate alliances, joint ventures, or acquisitions, or do we do it ourselves?
  • Are we better suited for custom development or very narrow markets (with very high per-unit prices) or for broader markets with, possibly, lower per unit prices?
  • Do we know what our customers want?
4 approaches to budgeting
4 Approaches to Budgeting:
  • Finance as many projects as possible, hoping to achieve a few winners
  • Set the budget by applying a conventional percentage of sales figures
  • Spend what the competition is spending
  • Decide how many successful new products you need and work backward to estimate the required investment
organization
Organization
  • Product managers
  • New-product managers
  • New-product committees
  • New-product departments
  • New-product venture teams
the new product development decision process
The New Product Development Decision Process:
  • Idea generation
  • Idea screening
  • Concept development and testing
  • Business analysis
the new product development decision process14
The New Product Development Decision Process:
  • Marketing strategy development
  • Product development
  • Market testing
  • Commercialization
npd challanges
NPD Challanges
  • New product failure rate of 67-80%
    • PDMA study
  • Key factors in success and failure of new products
    • Market research is key
npd challenges
NPD Challenges
  • New Product Development Process during Problem Definition:
  • Market research should be specific in what questions it is trying to answer during Information Needs:
  • Use of different alternatives and scenarios during Analysis and Collection:
  • Marketing research mistakes for NPD are hard to foresee and extremely costly
npd challenges17
NPD Challenges
  • Market potential is difficult to quantify
  • Lack of sales patterns, difficult calculation mechanisms, and skepticisms
  • Shorter life cycles and faster technological obsolescence is driving how we look at market research
market research in pharmaceuticals19
Market Research in Pharmaceuticals
  • 64% of pharmaceutical companies are using market research in the early stages
  • 21% in pre-clinical stages
  • Market gaps  new potentials to pursue
  • Product positioning
  • Research roles
  • Uses for Market research
case study 3m
Case Study: 3M
  • Minnesota Mining and Manufacturing fosters a culture of innovation and improvisation. This $15 billion company’s goal is to have each of its divisions generate atleast 30 percent of sales from products that have been on the market for less than 4 years.
3m strategy
3M Strategy:
  • “You have to kiss a lot of frogs to find prince.”
  • Employees are allowed to spend up to 15% of their time working on projects of personal interest.
  • Promising new ideas are assigned to multidisciplinary venture teams.
3m continued
3M Continued
  • 3M developed its idea for the hugely successful Scotch-Brite Never Scratch soap pads from listening to customers complaints about current products.
  • 3M arranged eight focus groups with consumers around the country and found that they had a problem with traditional soap pads scratching expensive cookware.
3m continued24
3M Continued
  • 3M was able to grab a foothold in a market previously dominated by SOS and Brillo.
  • Sales of the Scotch-Brite Never Scratch soap pad have exceeded 3M’s expectations by 25 percent.
conclusion
Conclusion
  • A market- and customer-driven new product development process that increases efficiency in two ways
    • First, it identifies key targets at the very beginning and provides form and definition to the process.
    • Second, it marshals all of the internal expertise and knowledge-based assets of the organization at the outset of the development process, where they can be used more effectively to capitalize on the highest-potential solutions early in the process