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New-Product Development and Product Life-Cycle Strategies;Objectives;$50 billion in profits over 27 years
Early new-product development relied heavily on copying the competition
$4.2 billion annually invested in R D;Definition;New products can be obtained via acquisition or development.
New products suffer from high failure rates.
Several reasons account for failure.;New Product Development Process:
Stage 1: Idea Generation
Internal idea sources:
R D
External idea sources:
Customers, competitors, distributors, suppliers;New Product Development Process:
Stage 2: Idea Screening
Product development costs increase substantially in later stages.
Ideas are evaluated against criteria; most are eliminated.;New Product Development Process:
Stage 3: Concept Development and Testing
Product concepts provide detailed versions of new product ideas.
Concept tests ask target consumers to evaluate product concepts.;New Product Development Process:
Stage 4: Marketing Strategy Development
Strategy statements describe:
The target market, product positioning, and sales, share, and profit goals for the first few years.
Product price, distribution, and marketing budget for the first year.
Long-run sales and profit goals and the marketing mix strategy.;New Product Development Process:
Stage 5: Business Analysis
Sales, cost, and profit projections
Stage 6: Product Development
Prototype development and testing;New Product Development Process:
Stage 7: Test Marketing
Standard test markets
Controlled test markets
Simulated test markets
Stage 8: Commercialization
;The Typical Product Life Cycle (PLC) Has Five Stages
Product Development, Introduction, Growth, Maturity, Decline
Not all products follow this cycle:
Fads
Styles
Fashions;The product life cycle concept can be applied to a:
Product class (soft drinks)
Product form (diet colas)
Brand (Diet Dr. Pepper)
Using the PLC to forecast brand performance or to develop marketing strategies is problematic;Product Li
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