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Launch Your PollEV Session: UWMBUSINESS to 37607

Learn about developing new products, diffusion of innovation, and the product life cycle in this PollEV session. Text UWMBUSINESS to 37607 to join (text LEAVE at the end of class). Alternate #: (747) 444-3548.

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Launch Your PollEV Session: UWMBUSINESS to 37607

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

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

  3. Peter Drucker, Management guru on marketing: • “Any organization has only two functions: one concerns marketing (innovation) and the other is marketing”

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

  5. The Roomba by iRobot 10 million pieces sold!

  6. Your pollev questions • Can you move the 3rd exam to the week before or week after because the avengers endgame film comes out on april the 26th? • Would you consider letting us use a small notecard on exams?

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

  8. Diffusion of Innovation • Note that different products diffuse at different rates.

  9. Using The Diffusion of Innovation Theory • The speed with which products diffuse depends on several characteristics: • Relative Advantage • Compatibility • Observability • Complexity and Trialability:

  10. Speed of Adoption:

  11. Best buy (electronics)

  12. Speed of Adoption:

  13. How Firms Develop New Products

  14. 1.Idea Generation

  15. *Internal R&D*

  16. 1.Idea Generation

  17. Step 2- Concept Testing: • Concept testing refers to the process in which a concept statement is presented to potential buyers to obtain their reactions.

  18. Example of a concept statement: Hands-free Vacuuming – does the dirty work so you don’t have to! • “Self-monitoring, affordable, yet sophisticated, help around the house, for one of the least-favorite household tasks - vacuuming. Just set the 15-inch cleaner down, and press the button. You can leave to get on with your other work, or stay to watch the cleaner quietly and effectively go about cleaning the floor and carpets, avoiding furniture and stairs, going under tables. No cords, no worries. The cleaner returns to its charger when it’s done”

  19. Step 3 – Product Development: • A prototype is the first physical form of a new product, still in rough form, that has the same properties as the new product • Alpha testing: Alpha tests occur in the firm’s R&D department • Beta testing: uses potential consumers, who examine the prototype in a “real use” setting

  20. Step 4 – Market Testing: • Premarket Tests: this is an early evaluation with a small group of consumers • Test Marketing: offering it to a limited geographical area prior to a national launch. This is a strong predictor of product success, because actual purchase behavior is studied. A test market usually involves all the elements of the marketing mix

  21. Step 5 – Product Launch: • The product is now ready for launch into the entire market. This requires tremendous financial resources and extensive coordination of all aspects of the marketing mix.

  22. Step 6 – Evaluation of Results: • Critical post-launch review to determine whether the product and its launch were a success or failure, and what needs to be changed. Three criteria may be used: • Satisfaction of technical requirements, such as performance • Customer acceptance; and • Satisfaction of the firm’s financial requirements, such as sales and profits

  23. How Firms Develop New Products

  24. Roomba’s Marketing: • Made sure consumers understood it as an “Intelligent vacuum cleaner” NOT “a robot” • (Didn’t want to scare off customers)

  25. POSITIONING & 4P’s Roomba’s Marketing mix: • “Intelligent vacuum cleaner” – POSITIONING • Specialty retailers – PLACE • Target, Bed Bath & Beyond, Amazon – PLACE • Show videos – PROMOTION • Publicity – PROMOTION • Advertising – PROMOTION • $200+ = PRICE

  26. The Product Life Cycle (PLC) • The PLC defines the stages the products move through as they enter, get established in, and ultimately leave the marketplace

  27. Product Life Cycle

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

  29. *Please note down* • DoI – how consumers behave • PLC – how a product behaves

  30. Stages in the Product Life Cycle

  31. Product Life Cycle

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

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

  34. Key concepts/ terms to know • Innovation; new-to-the-market products • Why do firms need to create new products? • Diffusion of innovation – pioneers, first movers. Innovators, early adopters, early majority, late majority, laggards. • Characteristics that influence adoption: relative advantage, compatibility, observability, complexity and trialability • The New Product Development Process: Idea generation, Concept testing, Product Development (prototype, alpha- and beta-testing), Market testing (premarket tests, test marketing), Product launch (trade and consumer promotions), Evaluation of results • The Product Life Cycle (PLC) and its 4 stages: Introduction stage, Growth stage, Maturity stage, Decline stage

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

  36. The First ‘P’: Services – the Intangible Product Ref: Text, Chapter 13

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