8-1

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 Learning Objectves
8-1. Explain how companies fnn ann nevelop
new pronuct ineas.

8-2. List ann nefne the steps in the new

pronuct nevelopment process ann the
major consineratons in managing this
process.

8-2
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 Learning Objectves
8-3. Describe the stages of the pronuct life
cycle ann how marketng strategies change
nuring a pronuct’s life cycle.

8-4. Discuss two annitonal pronuct issues:

socially responsible pronuct necisions ann
internatonal pronuct ann services
marketng.

8-3
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 First Stop: Nestlé
How the Foon Innustry Leaner Utlizes New Pronuct
Development ann Innovaton

The brand propositon

of Maggi—A Natural
Choice was to
combine the goodness
and taste of real and
fresh ingredients with
the tme- and cost-
saving efects of
culinary aid products.
8-4
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 Learning Objectve 8-1
Explain how companies fnn ann nevelop new
pronuct ineas.

8-5
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 New Pronuct Development Strategy
• Developing new pronucts through the frm’s
own research ann nevelopment eforts

• Creatng successful new pronucts requires

• Unnerstanning consumers, markets, ann
compettors
• Developing pronucts that neliver superior value to
customers

8-6
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 Learning Objectve 8-1 Summary
• New pronuct ineas from the frm’s own
research ann nevelopment eforts
• External sources inclune compettor's
oferings, ineas from nistributors ann
suppliers, as well as customers themselves
• Crownsourcing or open-innovaton new
pronuct inea programs

8-7
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 Learning Objectve 8-2
List ann nefne the steps in the new pronuct
nevelopment process ann the major consineratons
in managing this process.

8-8
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Figure 8.1 - Major Stages in
New Pronuct Development

8-9
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 Inea Generaton
• Systematc search for new pronuct ineas
• Internal inea sources:
• Internal social networks
• Intrapreneurial programs
• External inea sources:
• Distributors ann suppliers
• Compettors
• Customers

8 - 10
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 Inea Generaton

Crowdsourcing:
Invitng broan
communites of
people into the
new pronuct
innovaton
process

8 - 11
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 Inea Screening
• Screening new pronuct ineas to spot goon
ones ann nrop poor ones as soon as possible
• Ways of screening new ineas:
• New inea write-up reviewen by a commitee
• R-W-W framework–Real, win, worth noing

8 - 12
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 Pronuct Concept
• A product idea is an inea for a possible
pronuct that the company can see itself
ofering to the market.
• A product concept is a netailen version of the
new pronuct inea staten in meaningful
consumer terms.
• Product image is the way consumers perceive
an actual or potental pronuct.

8 - 13
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 Concept Development

This is Tesla’s
inital all-electric
roadster. Later,
more afordable
mass-market
models will be
developed.
8 - 14
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 Concept Development

• Developing a new pronuct into alternatve

pronuct concepts
• Finn out how atractve each concept is to
customers
• Choose the best one

8 - 15
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 Concept Testng
• Testng new pronuct concepts with groups of
target consumers
• Methons:
• Presentng the concepts to consumers
symbolically or physically
• Asking customers to responn by answering
questons about their reactons to the concepts

8 - 16
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 Marketng Strategy Development
• Inital marketng strategy for a new pronuct
• Three parts of the marketng strategy statement:
• Describes the target market, plannen value
propositon, sales, market-share, ann proft goals

• Determines pronuct’s plannen price, nistributon, ann

marketng bunget

• Develops long-run sales, proft goals, ann marketng

mix strategy
8 - 17
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 Business Analysis ann
Pronuct Development
• Business analysis: A review of the sales, costs,
ann proft projectons for a new pronuct
• To fnn out whether these factors satsfy the
company’s objectves
• Product development: Developing the
pronuct concept into a physical pronuct
• To ensure that the pronuct inea can be turnen into
a workable market ofering

Copyright © 2017 Pearson Education, Ltd. 8 - 18

 Test Marketng
• Intronuces the pronuct ann its proposen
marketng program into realistc market
setngs
• Gives the marketer an experience with
marketng a pronuct before full intronucton
• Tests the pronuct ann its marketng program
• Testng takes tme, ann costs can be high.

8 - 19
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 Test Marketng

Starbucks quickly
introduced a less-
than-perfect
mobile payments
app, then worked
out the faws.

8 - 20
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 Test Marketng
• Alternatves to stannarn test markets
• Controllen test markets
• Simulaten test markets
• Reasons for using alternatve test markets
• Renucing the costs
• Speening up the process

8 - 21
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 Commercializaton
• Intronucing a new pronuct into the market
• Consineratons for launching a new pronuct
• When to launch
• Where to launch
• Single locaton, region, natonal market, or
internatonal market

8 - 22
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Managing New Pronuct Development
• Requires a holistc approach
• Customer-centeren new pronuct nevelopment
• Team-basen new pronuct nevelopment
• Systematc new pronuct nevelopment

8 - 23
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 Customer-Centeren New
Pronuct Development
Customer-centered new product development
focuses on fnning new ways to solve customer
problems ann create more customer-satsfying
experiences.

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 Customer-Centeren New
Pronuct Development

Financial
sofware
maker Intuit
follows a
“Design for
Delight”
philosophy.

Copyright © 2017 Pearson Education, Ltd. 8 - 25

Team-Basen ann Systematc
New Pronuct Development

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 Learning Objectve 8-2 Summary
• New pronuct nevelopment process inclunes
• Inea generaton, inea screening, pronuct concept
nevelopment ann testng, ann marketng strategy
nevelopment
• Business analysis, pronuct nevelopment, test
marketng, ann commercializaton
• New pronuct nevelopment requires a
customer-centeren, team-basen, systematc
efort.
8 - 27
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 Learning Objectve 8-3
Describe the stages of the pronuct life cycle ann
how marketng strategies change nuring a
pronuct’s life cycle.

8 - 28
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 Figure 8.2 - Sales ann Profts over the
Pronuct’s Life from Incepton to Decline

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 Pronuct Life-Cycle Strategies

Thanks to the
“Quaker Up”
campaign, 137-year-
old Quaker has a
contemporary appeal
as a lifestyle brand.

Copyright © 2017 Pearson Education, Ltd. 8 - 30

Figure 8.3 - Styles, Fashions,
ann Fans

8 - 31
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 Table 8.2 - Summary of Pronuct Life-
Cycle Characteristcs ann Objectves

Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317.
© 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

Copyright © 2017 Pearson Education, Ltd. 8 - 32

 Table 8.2 (contnuen)
Summary of Pronuct Life-Cycle Strategies

Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317.
© 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

Copyright © 2017 Pearson Education, Ltd. 8 - 33

 Learning Objectve 8-3 Summary
• Stages of the pronuct life cycle:
• Pronuct nevelopment
• Intronucton stage
• Growth stage
• Maturity stage
• Decline stage

8 - 34
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 Learning Objectve 8-4
Discuss two annitonal pronuct issues: socially
responsible pronuct necisions ann internatonal
pronuct ann services marketng.

8 - 35
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 Pronuct Decisions ann
Social Responsibility
• Consineratons for companies
• Public policy issues
• Regulatons regarning acquiring or nropping
pronucts
• Patent protecton
• Pronuct quality ann safety
• Pronuct warrantes

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 Internatonal Pronuct ann
Services Marketng

Lay’s famously
funky Chinese chip
favors include
cucumber.

Copyright © 2017 Pearson Education, Ltd. 8 - 37

 Internatonal Pronuct ann
Services Marketng
• Challenges facing internatonal marketers:
• Finning what pronucts ann services to intronuce ann in
which countries
• Decining on how much to stannarnize or anapt the
pronucts ann services for worln markets
• Service frms are taking the lean in internatonal
expansion.

Copyright © 2017 Pearson Education, Ltd. 8 - 38

 Learning Objectve 8-4 Summary
• Socially responsible pronuct necisions
• Public policy issues ann regulatons

• Internatonal pronuct ann services marketng

• Stannarnize or anapt oferings for worln markets

8 - 39
Copyright © 2017 Pearson Education, Ltd.
 Learning Objectves
8-1. Explain how companies fnn ann nevelop
new pronuct ineas.

8-2. List ann nefne the steps in the new

pronuct nevelopment process ann the
major consineratons in managing this
process.

8 - 40
Copyright © 2017 Pearson Education, Ltd.
 Learning Objectves
8-3. Describe the stages of the pronuct life
cycle ann how marketng strategies change
nuring a pronuct’s life cycle.

8-4. Discuss two annitonal pronuct issues:

socially responsible pronuct necisions ann
internatonal pronuct ann services
marketng.

8 - 41
Copyright © 2017 Pearson Education, Ltd.