1. Marketing Stephan Langdon, MBA, M Ed

2. Chapter Nine

3. New-Product Development and Product Life-Cycle Strategies New-Product Development Strategy New-Product Development Process Managing New-Product Development Product Life-Cycle Strategies Additional Product and Service Considerations Topic Outline

4. New-Product Development Strategy Acquisition refers to the buying of a whole company, a patent, or a license to produce someone else’s product New product development refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development Two ways to obtain new products

5. New-Product DevelopmentReasons for new product failure

6. Which of the following is not a reason that a new product might fail? The product is priced too high. The product is poorly designed. The estimated market for the product is too large. All of the above are reasons that a new product might fail.

7. Which of the following is not a reason that a new product might fail? The product is priced too high. The product is poorly designed. The estimated market for the product is too large. All of the above are reasons that a new product might fail.

8. New-Product Development Process Major Stages in New-Product Development

9. New-Product Development Process Idea generation is the systematic search for new-product ideas Sources of new-product ideas Internal External Idea Generation

10. New-Product Development Process Idea Generation Internal sources refer to the company’s own formal research and development, management and staff, and intrapreneurial programs External sources refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms

11. Which of the following is not a good external source of ideas? Customers The R&D department Suppliers Competitors

12. Which of the following is not a good external source of ideas? Customers The R&D department Suppliers Competitors

13. New-Product Development Process Identify good ideas and drop poor ideas R-W-W Screening Framework: Is it real? Can we win? Is it worth doing? Idea Screening

14. New-Product Development Process Concept Development and Testing Product idea is an idea for a possible product that the company can see itself offering to the market Product concept is a detailed version of the idea stated in meaningful consumer terms Product image is the way consumers perceive an actual or potential product

15. New-Product Development Process Concept testing refers to testing new-product concepts with groups of target consumers Concept Development and Testing

16. New-Product Development Process Marketing strategy development refers to the initial marketing strategy for introducing the product to the market Marketing strategy statement includes: Description of the target market Value proposition Sales and profit goals Marketing Strategy Development

17. New-Product Development Process Business analysis involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives Marketing Strategy Development

18. New-Product Development Process Marketing Strategy Development Product development involves the creation and testing of one or more physical versions by the R&D or engineering departments Requires an increase in investment

19. New-Product Development Process Marketing Strategy Development Test marketing is the stage at which the product and marketing program are introduced into more realistic marketing settings Provides the marketer with experience in testing the product and entire marketing program before full introduction

20. ________ is a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives. Market strategy development Product development Business analysis Forecasting

21. ________ is a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives. Market strategy development Product development Business analysis Forecasting

22. When a concept moves into a physical product to insure that the product idea can be turned into a workable product, this is referred to as ___________. market strategy product development business analysis commercialization

23. When a concept moves into a physical product to insure that the product idea can be turned into a workable product, this is referred to as ___________. market strategy product development business analysis commercialization

24. New-Product Development Process Types of Test Markets

25. Which of the following is not a form of test marketing? Standard test markets Controlled test markets Simulated test markets Perceptual test markets

26. Which of the following is not a form of test marketing? Standard test markets Controlled test markets Simulated test markets Perceptual test markets

27. Some of the drawbacks of ________ test markets are that they can be very costly, and they can give competitors a chance to look at the company’s new ideas. standard controlled simulated Internet

28. Some of the drawbacks of ________ test markets are that they can be very costly, and they can give competitors a chance to look at the company’s new ideas. standard controlled simulated Internet

29. New-Product Development Process Advantages of simulated test markets Less expensive than other test methods Faster Restricts access by competitors Disadvantages Not considered as reliable and accurate due to the controlled setting Marketing Strategy Development

30. New-Product Development Process Marketing Strategy Development

31. New-Product Development Process Commercialization is the introduction of the new product When to launch Where to launch Planned market rollout Marketing Strategy Development

32. The systematic search for new-product ideas is called ________. idea generation idea search idea screening concept development

33. The systematic search for new-product ideas is called ________. idea generation idea search idea screening concept development

34. Once the new product ideas have been screened, the next step in the new product development process is ________. marketing strategy concept development and testing product development none of the above

35. Once the new product ideas have been screened, the next step in the new product development process is ________. marketing strategy concept development and testing product development none of the above

36. The final stage in new product development is referred to as ________. new product penetration commercialization consumer initiation idea screened

37. The final stage in new product development is referred to as ________. new product penetration commercialization consumer initiation idea screened

38. Managing New-Product Development Successful new-product development should be: Customer centered Team centered Systematic

39. Managing New-Product Development Customer-centered new product development focuses on finding new ways to solve customer problems and create more customer satisfying experiences Begins and ends with solving customer problems New-Product Development Strategies

40. Managing New-Product Development Sequential new-product development is a development approach where company departments work closely together individually to complete each stage of the process before passing it along to the next department or stage Increased control in risky or complex projects Slow New-Product Development Strategies

41. Managing New-Product Development Team-based new-product development is a development approach where company departments work closely together in cross-functional teams, overlapping in the product-development process to save time and increase effectiveness New-Product Development Strategies

42. Managing New-Product Development Systematic new-product development is an innovative development approach that collects, reviews, evaluates, and manages new-product ideas Creates an innovation-oriented culture Yields a large number of new-product ideas New-Product Development Strategies

43. Product Life-Cycle Strategies Product Life Cycle

44. Product Life-Cycle Strategies Product development Sales are zero and investment costs mount Introduction Slow sales growth and profits are nonexistent Growth Rapid market acceptance and increasing profits. Maturity Slowdown in sales growth and profits level off or decline Decline Sales fall off and profits drop

45. Which of the following is not a stage in the product life cycle (PLC)? Idea screening Growth Maturity Decline

46. Which of the following is not a stage in the product life cycle (PLC)? Idea screening Growth Maturity Decline

47. Which stage of the product life cycle (PLC) is characterized by slow growth because the product has achieved acceptance by most of its potential buyers? Introduction Growth Maturity Decline

48. Which stage of the product life cycle (PLC) is characterized by slow growth because the product has achieved acceptance by most of its potential buyers? Introduction Growth Maturity Decline

49. Product Life-Cycle Strategies Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

50. Product Life-Cycle Strategies

51. ________ tend to grow slowly, remain popular for a while, and then decline slowly. Fads Styles Fashions Designs

52. ________ tend to grow slowly, remain popular for a while, and then decline slowly. Fads Styles Fashions Designs

53. Product Life-Cycle Strategies Slow sales growth Little or no profit High distribution and promotion expense Introduction Stage

54. Product Life-Cycle Strategies Sales increase New competitors enter the market Price stability or decline to increase volume Consumer education Profits increase Promotion and manufacturing costs gain economies of scale Growth Stage

55. Product Life-Cycle Strategies Slowdown in sales Many suppliers Substitute products Overcapacity leads to competition Increased promotion and R&D to support sales and profits Maturity Stage

56. Product Life-Cycle Strategies Market modifying Product modifying Marketing mix modifying Maturity Stage Modifying Strategies

57. Product Life-Cycle Strategies Maintain the product Harvest the product Drop the product Decline Stage

58. In the ________ stage, sales start climbing quickly and competition often enters the market. introduction growth maturity decline

59. In the ________ stage, sales start climbing quickly and competition often enters the market. introduction growth maturity decline

60. Product Life-Cycle Strategies Summary of Product Life Cycle

61. Additional Product and Service Considerations Public policy and regulations regarding developing and dropping products, patents, quality, and safety Product Decisions and Social Responsibility

62. Marketers should consider public policy issues involving product safety, environment, and warranties. This is referred to as ________. social responsibility positioning marketing mix commercialization

63. Marketers should consider public policy issues involving product safety, environment, and warranties. This is referred to as ________. social responsibility positioning marketing mix commercialization

64. Additional Product and Service Considerations International Product and Service Marketing—Challenges Determining what products and services to introduce in which countries Standardization versus customization Packaging and labeling Customs, values, laws

65. Marketing Stephan Langdon, MBA, M Ed