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Chapter 11Developing New
ObjectivesChallenges in New Product Development (NPD)Organizational Structure NPDStages Management of NPDDiffusion Adoption of New Products
Why New Products Fail“Over Championing”Overestimated DemandPoor DesignPoor Marketing ExecutionHigh Development CostsStrong Competitive Reaction
Challenges in NPDIdea ShortageFragmented MarketsSocial Governmental ConstraintsCostCapital ShortageNeed for SpeedShorter Product Life Cycles
New Product Development ProcessIdeaGenerationConceptDevelopmentand TestingMarketingStrategyDevelopmentIdeaScreeningBusinessAnalysisProductDevelopmentMarketTestingCommercialization
Probability of SuccessProbabilityof technicalcompletionOverallprobabilityof success=Probability ofcommercializationgiven technicalcompletionXProbability ofeconomicsuccess givencommercializationX
Concept Development Testing1. Develop Product Ideas into Alternative Product Concepts2. Concept Testing - Test the ProductConcepts with Groups of Target Customers3. Choose the Best One
High price/oz.Low in caloriesLow price/oz.High in caloriesProduct Brand Positioning(a) Product-positioningmap(breakfast market)ExpensiveSlowInexpensiveQuickBaconandeggsPancakesInstantbreakfastColdcerealHotcerealb) Brand-positioningmap(instant breakfast market)Brand CBrand BBrand A
Conjoint AnalysisBrand name----------Utility1.00| | |K2R Glory BissellRetail PriceUtility----------1.00| | |$1.19 $1.39 $1.59Good Housekeeping Seal?Utility1.0----------0| |No YesUtilityMoney-BackGuarantee?1.0----------0| |No Yes
Consumer-Goods Market TestingSales-WaveResearchTest offering trail toa sample of consumers insuccessiveperiods.SimulatedTest MarketTest in a simulated shopping environmentto a sample of consumers.StandardTest MarketFull marketing campaignin a small number of representative cities.Controlled Test MarketA few stores that have agreed to carry newproducts for a fee.
CommercializationWhenWh
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