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Conceiving, developing, and managing new products

Conceiving, developing, and managing new products. New product. A modification of an existing product or an innovation the consumer perceives as meaningful. Types of New products. Modifications Minor innovations Major innovations Significantly different. Product life cycle.

joseph-atkinson
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Conceiving, developing, and managing new products

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  1. Conceiving, developing, and managing new products

  2. New product • A modification of an existing product or an innovation the consumer perceives as meaningful

  3. Types of New products • Modifications • Minor innovations • Major innovations • Significantly different

  4. Product life cycle

  5. Product Innovation • Importance • New products cause old products to become obsolete • Consumer tastes and preferences change • Competition copies • All products are mortal • High failure rate • Reasons for high failure rate • Classifications of failure

  6. Stages in the new product development process

  7. Managing products throughout the product life cycle

  8. The Introduction Stage • Also called “pioneering” stage • Most expensive and risky • Truly innovative – build primary demand • Product strategies • JUMP IN! Pioneer advantage • Wait until growth stage • Pricing strategies • Market skimming • Market penetration

  9. Growth Stage • Sales and profits rise • Product is adopted by individual consumers • Factors Influencing adoption • Diffusion is the process by which an innovation is spread through a social system • Competition enters the market • Profits peak

  10. The diffusion process • Innovators (2.5-3%) • Early adopters (13%) • Early majority (34%) • Late majority (34%) • Laggards (16%)

  11. Maturity • Sales continue to grow, but at a declining rate • Benefits of having a product at the maturity stage • Marketing strategies to extend the maturity stage of the product life cycle

  12. Decline • Reasons • Strategies • Delete a product • Ensure efficiency in marketing and production • Prune unprofitable sizes and models • “Run out” the product

  13. Obsolescence • Functional • Style

  14. Evaluating the product life-cycle concept • Stages, time span and shape of the product life cycle vary by product • Economy, inflation, and consumer lifestyles may shorten or lengthen a product’s life cycle • A firm may do worse than the average product in the market • A firm may be able to manage the life cycle, or extend it or reverse decline • Firms may engage in a self-fulfilling prophecy

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