1. 12 THE PRODUCT EXPERIENCE:NEW PRODUCT DEVELOPMENT Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin

2. LEARNING OBJECTIVES Recognize the importance of new product development to long term success Understand the new product development process Comprehend the process consumers use in adopting a new product Identify how new products become diffused in a market 12-2

3. NEW PRODUCTS – CREATING LONG TERM SUCCESS “New” Defined Company Perspective New-to-the-World Disruptive Innovation Sustaining Innovations Reposition Existing Products Cost Reduction 12-3

4. NEW PRODUCTS – CREATING LONG TERM SUCCESS “New” Defined Customer’s Perspective The customer’s perspective is much more narrow and self directed. The customer is most interested in an answer to the fundamental question, is this new product new to me? 12-4

5. NEW PRODUCTS – CREATING LONG TERM SUCCESS 12-5

6. NEW PRODUCT DEVELOPMENT PROCESS The three major activities in new product development are: Identify Product Opportunities Define the Product Opportunity Develop the Product Opportunity 12-6

7. NEW PRODUCT DEVELOPMENT PROCESS Identify Product Opportunities Generate New Ideas 12-7

8. NEW PRODUCT DEVELOPMENT PROCESS Identify Product Opportunities Screen And Evaluate Ideas Go-to-Market Mistake Stop-to-Market Mistake 12-8

9. NEW PRODUCT DEVELOPMENT PROCESS Define the Product Opportunity Define and Test Product Concept Product definition has three objectives: Defines the product’s value proposition; what customer needs are being addressed and, in broad terms, at what price. The definition briefly identifies the target market(s) (who is the target market(s), what is the purchase frequency). The definition delineates the product’s characteristics (look, feel, physical elements, and features of the product). 12-9

10. NEW PRODUCT DEVELOPMENT PROCESS Define the Product Opportunity Create Marketing Strategy Marketing Program Target Market Promotion Product Price Place 12-10

11. NEW PRODUCT DEVELOPMENT PROCESS Define the Product Opportunity Conduct Business Case Analysis Total Demand New purchases Repeat purchases Replacement purchases Profitability Analysis 12-11

12. NEW PRODUCT DEVELOPMENT PROCESS Develop the Product Opportunity Develop The Product Product Testing Test the Market Consumer Product Market Tests Business Product Market Tests Product Launch 12-12

13. Summary of Decision Criteria in Market Tests EXHIBIT 12.5 Source: www.emeraldinsight.com. 12-13

14. CONSUMER ADOPTION AND DIFFUSION PROCESS Consumer Product Adoption Process Innovation diffusion process is how long it takes a product to move from first purchase to last purchase (the last set of users to adopt the product). 12-14

15. CONSUMER ADOPTION AND DIFFUSION PROCESS Consumer Product Adoption Process An individual moves through five stages before adopting a product: 12-15

16. CONSUMER ADOPTION AND DIFFUSION PROCESS The Diffusion Of New Innovations Innovators (2.5%) Early Adopters (13.5%) Early Majority (34.5%) Late Majority (34%) Laggards (16%) 12-16

17. Consumer Product Adoption Chart EXHIBIT 12.7 Source: www.rubiconconsulting.com. 12-17

18. Thank You, Please Visit Us At : http://wanbk.page.tl