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1. 9 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Developing and Managing Products CHAPTER 10

2. The Importance of New Products LOI Explain the importance of developing new products and describe the six categories of new products

3. New Product New Product LOI A product new to the world, the market, the producer, the seller, or some combination of these.

4. New-to-the-World New Product Lines Product Line Additions Improvements or Revisions Repositioned Products Lower-Priced Products Categories of New Products LOI Increase market share among existing customers Attract new customers to existing products Create new products for present markets Market Development Diversification Introduce new products into new markets

5. New Product for Starbucks • Starbucks recently marketed the film “Akeelah and the Bee”. • It says the film is a natural extension of the Starbucks experience. • Critics say the pervasive chain is overextending its welcome. SOURCE: Janet Adamy, “Lights, Camera, Action at Starbucks,” Wall Street Journal, April 22-23/2006, A2. LOI

6. REVIEW LEARNING OUTCOMEDeveloping New Products LOI

7. The New Product Development Process LO2 Explain the steps in the new-product development process

8. New Product Success Factors Long-term commitment Company-specific approach Capitalize on experience Establish an environment The New-Product Development Process LO2

9. New-Product Strategy Idea Generation Idea Screening Business Analysis Development Test Marketing Commercialization New Product New-Product Development Process LO2

10. Focuses new-product ideas Role of new products in overall plan Describes characteristics of new products Step 1: New-Product Strategy Links new-product development process with Objectives of the marketing department, the business unit and corporation Part of overall marketing strategy LO2

11. Sources ofNew-ProductIdeas Customers Employees Distributors Competitors Vendors R & D Consultants Online Step 2: Idea Generation LO2 Diversification http://www.ideo.com

12. Tips for New Product Development LO2 • Disperse R & D around the globe • Keep teams small and empower employees • Flatten hierarchy • Encourage generation of crazy new ideas • Welcome mistakes

13. Brainstorming Brainstorming LO2 The process of getting a group to think of unlimited ways to vary a product or solve a problem.

14. Screening Step 3: Idea Screening LO2 The first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are inappropriate for some other reason.

15. A test to evaluate a new-product idea, usually before any prototype has been created. Concept Test Concept Test LO2

16. Demand Considerations in Business Analysis Stage Cost Sales Profitability Step 4: Business Analysis LO2

17. Step 5: Development LO2 • Creation of prototype • Marketing strategy • Packaging, branding, labeling • Promotion, price, and distribution strategy • Manufacturing feasibility • Final government approvals if needed

18. A new team-oriented approach to new-product development where all relevant functional areas and outside suppliers participate in the development process. SimultaneousProduct Development Simultaneous Product Development LO2

19. TestMarketing Online Step 6: Test Marketing LO2 The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. http://www.merwyn.com

20. Alternatives to Test Marketing http://www.newproductworks.com Online LO2 • Single-source research using supermarket scanner data • Simulated (laboratory) market testing • Online test marketing

21. Biz Flix LO2 October Sky 21

22. Production Inventory Buildup Distribution Shipments Sales Training Trade Announcements Customer Advertising Step 7: Commercialization LO2

23. REVIEW LEARNING OUTCOMENew-Product Development Process LO2