Launch your PollEV session: Text : UWMBUSINESS to 37607

1. Launch your PollEV session: Text: UWMBUSINESS to 37607 *Text LEAVE at the end of class* Alternate #: (747) 444-3548

2. Test 2 results • Average: 77.2% • 90 – 100: 24.5% • 80 – 89: 28.3% • 79 and below: 47%

5. Brand Equity • Brand equity, representing the value of the brand,is the set of assets and liabilities linked to the brand

6. Newly launched, In Jan 2019! • (A kind of “MILK” to compete with milk, soy, coconut, etc.) • They do not currently have other similar products Quaker – maker of oatmeal

8. Branding Strategies • Brand and Line Extensions • A “brand extension” refers to the use of the same brand name in a different product line. • A “line extension” is the use of the same brand name within the same product line.

10. Your questions • Would you consider making the exam open book exams ? • How does learning about marketing and branding strategies affect students' buying decisions? How about the buying decisions of people who work in branding?

13. The First ‘P’: Developing New Products Ref: Text, chapter 12

14. In this topic, we will: • Identify the reasons firms innovate • Examine the diffusion of innovation theory and describe the different groups of adopters • Explain the stages involved in developing a new product • Explain the product life cycle (PLC)

15. “To develop NEW PRODUCTS” In this topic, we will: • Identify the reasons firms innovate • Examine the diffusion of innovation theory and describe the different groups of adopters • Explain the stages involved in developing a new product • Describe the various product life cycle (PLC) concepts

16. “PRODUCT Strategy”: Innovation “PRODUCT” (Value) Seller Buyer VALUE

18. “A company survives changing times not by changing along with them, but by changing before them”

19. Value Creation: The First ‘P’ • “Innovation” refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow.

20. Deep understanding of Consumer Needs

21. Why Do Firms Create New Products? • New market offerings provide value to both firms and customers.

23. Why Do Firms Create New Products? • Even though only about 3%of new products actually succeed, serious reasons compel firms to continue introducing new products

24. Statistic from Nielsen: • 14 out of 3,500 new consumer goods introduced in 2012 had some measure of success • 0.4%!!

25. Why Do Firms Create New Products? • Note that the word “new” could refer to a wide variety of “newness”: Think of the degree of newness as a continuum, ranging from truly “new-to-the-world” to “slightly repositioned”

26. “New” continuum Slightly repositioned New-to-the-world

27. Why Do Firms Create New Products? • Changing Customers Needs: • Firms can create and deliver value more effectively by satisfying the changing needs of their current and new customers.

29. Why Do Firms Create New Products? • Market Saturation: • The longer a product exists in the marketplace, the more likely it is that the market will become saturated. • Many firms are now looking into niche markets(rather than mass markets)

30. Niche market example: luxury Socks on a Subscription The London Sock Company Source: https://www.metrilo.com/blog/

31. “Don’t put all your eggs in one basket” • Managing Risk through Diversity: • Through innovation, firms diversify their risk and enhance firm value better than a single product can

32. Fashion Cycles: • In industries that rely on fashion trends and experience short product life cycles, most sales come from new products ( apparel, arts, books, software)

34. Why Do Firms Create New Products? • Improving Business Relationships: • New products do not always target end consumers; sometimes, they function to improve relationships with suppliers.

37. The Roomba by iRobot 10 million pieces sold!

39. A Product

40. “New” continuum Slightly repositioned New-to-the-world

42. Diffusion of Innovation • New products are not adopted by everyone at the same time. • Rather, they diffuse or spread through a population in a process known as diffusion of innovation

44. Diffusion of Innovation“DoI” Number of adopters ( new users)

45. “DoI” Diffusion of Innovation • This is the process by which an innovation – whether a product, a service, or a process – spreads throughout a market group over time, and across various categories of adopters • The theory helps marketers understand the rate at which consumers are likely to adopt a new product. • It also helps them predict potential sales and identify potential markets for their new products

46. Diffusion of Innovation • “Pioneers” (or “breakthroughs”) are new-to-the-world products. • Pioneers are first movers.

47. This is not always true however. In many cases, imitators gain advantage in the market.

48. Diffusion of Innovation • The diffusion of innovation curve shows the number of users of a new product spreading through the population over a period of time and generally follows a bell shaped curve. • A few people buy the product at first, then increasingly more buy, and finally fewer people buy as the degree of the diffusion slows. • These purchasers can be divided into five groups

49. Diffusion of Innovation Number of adopters ( new users)

50. Diffusion of Innovation • Innovators: • Are those buyers who want to be the first on the blockto have the new product. • Represent about 2.5% of the total market • Through talking about and spreading positive word-of-mouth about the new product