Introducing New

Market Offering

Julyanawaty 3303015027
Outline
1. What challenges does a company face in developing new

products and services?

2. What organizational structures and processes do managers

use to oversee new-product development?

3. What are the main stages in developing new products and

services?

4. What is the best way to manage the new-product

development process?

5. What factors affect the rate of diffusion and consumer

adoption of newly launched products and services?

 A D D N E W P R O D U C T

Acquisition Development
-buyothercompanies -createnewproduct
-patentsfromother -contractwith
companies independentresearcher
-alicenseorfranchise
fromanothercompany
MOST NEW-PRODUCT ACTIVITY IS

DEVOTED TO IMPROVING EXISTING

PRODUCTS

INNOVATION CAN FORCE

COMPETITORS

FEWER THAN 10 PERCENT OF ALL NEW

PRODUCTS ARE TRULY INNOVATIVE

AND NEW TO THE WORLD

CREATING A STRONG R&D AND

MARKETING PARTNERSHIP
 Challenges in New-Product

Development
TheInnovationImperative TheIncrementalInnovation

-createapositiveattitude -tweakingproductsfornew
-routinizetheinnovationprocess customers
-practiceteamwork -createdisruptivetechnologies
-allowtheirpeopleto (unique,superiorproduct,
experiment well-definedproduct,
technologicalandmarketing
finding hidden assumptions and ignored

processes that can change the way a

synergy,qualityofexecutioninall
company does business stages,marketattractiveness)
New-ProductFailure
Shortageofimportantideasincertainareas
Fragmentedmarkets
Social,economic,andgovernmentalconstraints
Costofdevelopment
Capitalshortages
Shorterrequireddevelopmenttime
Poorlaunchtiming
Shorterproductlifecycles
Organizationalsupport
 Organizational Arrangements
BudgetingforNew-Product
Development
R&Doutcomesaresouncertain
itisdifficulttousenormalinvestment
criteria
OrganizingNew-Product
Development
CROSS-FUNCTIONALTEAMS
collaborateanduseconcurrent
new-productdevelopment
STAGE-GATESYSTEMS
dividetheinnovationprocessinto
stages
 Managing the Development Process: Ideas

GeneratingIdeas
1.Thedemandlandscape
2.Theopportunityspace
INTERACTINGWITHEMPLOYEES
3.Thestrategicblueprint
STUDYINGCOMPETITORS
INTERACTINGWITHOTHERS
-Customerneedsandwants ADOPTINGCREATIVITY
-Crowdsourcing TECHNIQUES
-Helpcustomerstofeelcloser
Managing the Development Process: Ideas

GeneratingIdeas

ADOPTINGCREATIVITYTECHNIQUES
Attributelisting
Gasstationstores=gasstations+food
Forcedrelationships
Cybercafs=cafeteria+Internet
Morphologicalanalysis
Cerealbars=cereal+snacking
Reverseassumptionanalysis
KinderSurprise=candy+toy
Newcontexts
SonyWalkman=audio+portable
Mindmapping
 Managing the Development Process: Ideas

UsingIdeaScreening
Aims:todroppoorideasasearlyaspossible
weighted-indexmethod:promotesystematicevaluationanddiscussion,not
supposedtomakethedecisionformanagement

istheprobabilityhigh
enoughtowarrantcontinued
development?
Managing the Development Process:
Concept to Strategy
Concept Development and Testing

Productidea:possibleproductthecompanymightoffertothemarket
Productconcept:elaboratedversionoftheideaexpressedinconsumerterms.

CONCEPTDEVELOPMENT
Concept1.Whowillusethisproduct?
Concept2.Whatprimarybenefitshouldthisproductprovide?
Concept3.Whenwillpeopleconsumethisproduct?

Theyrepresentsacategoryconceptthatdefinestheproductscompetition
Managing the Development Process:
Concept to Strategy
Concept Development and Testing

CONCEPTDEVELOPMENT
Managing the Development Process:
Concept to Strategy
Concept Development and Testing
CONCEPTTESTING
presentingtheproductconcepttotargetconsumers,physicallyor
symbolically,andgettingtheirreactions,helpavoidcostlymistakes
rapidprototypingandvirtualreality
Communicabilityandbelievability:Ifthescoresarelow,theconceptmustbe
refinedorrevised.
Needlevel:Thestrongertheneed,thehighertheexpectedconsumerinterest.
Gaplevel:Thegreaterthegap,thehighertheexpectedconsumerinterest.
Perceivedvalue:Thehighertheperceivedvalue,thehigherisexpectedconsumer
interest.
Purchaseintention
Usertargets,purchaseoccasions,purchasingfrequency
Managing the Development Process:
Concept to Strategy
Concept Development and Testing
CONJOINTANALYSIS
derivingtheutilityvaluesthatconsumersattachtovaryinglevelsofa
productsattributes
Managing the Development Process:
Concept to Strategy
Marketing Strategy Development

Thefirstpartdescribesthetargetmarketssize,structure,
andbehavior;theplannedproductpositioning;andthesales,
marketshare,andprofitgoalssoughtinthefirstfewyears
Thesecondpartoutlinestheplannedprice,distribution
strategy,andmarketingbudgetforthefirstyear
Thethirdpartofthemarketingstrategyplandescribesthe
long-runsalesandprofitgoalsandmarketing-mixstrategy
overtime
Managing the Development Process:
Concept to Strategy
Business Analysis

ESTIMATINGTOTALSALES
-Totalestimatedsalesarethesumofestimatedfirst-timesales,
replacementsales,andrepeatsales.Sales-estimationmethods
dependonwhethertheproductispurchasedonce(suchasan
engagementringorretirementhome),infrequently,oroften.

ESTIMATINGCOSTSANDPROFITS
-CostsareestimatedbytheR&D,manufacturing,
marketing,andfinancedepartments.
Managing the Development Process:

Development to Commercialization

PRODUCTDEVELOPMENT
-PhysicalPrototypes
-CustomerTests

MARKETTESTING
a.Consumer-goodsMarketTesting
Sales-WaveResearch,SimulatedTestMarketing,
ControlledTestMarketing,TestMarkets
b.Business-goodsMarketTesting

COMMERCIALIZATION
When(Timing)
Where(GeographicStrategy)
ToWhom(Target-marketProspects)
How(IntroductoryMarketStrategy)
THE CONSUMER-ADOPTION PROCESS
Adoptionisanindividualsdecisiontobecomearegularuserofaproduct
andisfollowedbytheconsumer-loyaltyprocess

STAGES IN THE ADOPTION PROCESS

1.Awareness:Theconsumerbecomesawareoftheinnovationbutlacks
informationaboutit.
2.Interest:Theconsumerisstimulatedtoseekinformationaboutthe
innovation.
3.Evaluation:Theconsumerconsiderswhethertotrytheinnovation.
4.Trial:Theconsumertriestheinnovationtoimprovehisorherestimate
ofitsvalue.
5.Adoption:Theconsumerdecidestomakefullandregularuseofthe
innovation.
THE CONSUMER-ADOPTION PROCESS
FACTORS INFLUENCING THE ADOPTION PROCESS

READINESSTOTRYNEWPRODUCTSANDPERSONALINFLUENCE
Innovatorsaretechnologyenthusiasts
Earlyadoptersareopinionleaderswhocarefullysearchfornewtechnologies
thatmightgivethemadramaticcompetitiveadvantage
Earlymajorityaredeliberatepragmatistswhoadoptthenewtechnologywhen
itsbenefitsareprovenandalotofadoptionhasalreadytakenplace
Latemajorityareskepticalconservativeswhoareriskaverse,technologyshy,and
pricesensitive
Laggardsaretradition-boundandresisttheinnovationuntilthestatusquoisno
longerdefensible

ORGANIZATIONSREADINESSTOADOPTINNOVATIONS
THE CONSUMER-ADOPTION PROCESS
FACTORS INFLUENCING THE ADOPTION PROCESS

CHARACTERISTICSOFTHEINNOVATION

-relativeadvantagethedegreetowhichtheinnovationappearssuperiorto
existingproducts.
-compatibilitythedegreetowhichtheinnovationmatchesthevaluesand
experiencesoftheindividuals
-complexitythedegreetowhichtheinnovationisdifficulttounderstandoruse.
-divisibilitythedegreetowhichtheinnovationcanbetriedonalimitedbasis.
-communicabilitythedegreetowhichthebenefitsofuseareobservableor
describabletoothers.
-cost,riskanduncertainty,scientificcredibility,andsocialapproval
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