Armstrong mai12 inppt_08

2. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
•Explain how companies find and develop
new product ideas.
•List and define the steps in the new product
development process and the major
considerations in managing this process.
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3. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
•Describe the stages of the product life cycle
and how marketing strategies change during
a product’s life cycle.
•Discuss two additional product issues:
socially responsible product decisions and
international product and services
marketing.
8 - 3

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First Stop: Samsung–Enriching Customers’
Lives through New Product Innovation
•Transition from a low-cost knock-off to a
cutting-edge technology brand
•Aimed to dethrone Sony
•Set out to become a premier brand
•Focused on customer-centered new product
•Wants to be the first company that finds and
develops the next product in consumer
electronics
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New Product Development
•Development of new products through the
firm’s own research and development efforts
•New product - Original products, product
improvement and modifications, and new brands
•Creating successful new products requires:
•Understanding consumers, markets, and
competitors
•Developing products that deliver superior value
to customers
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Figure 8.1 - Major Stages in
New Product Development
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Idea Generation
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•Systematic search for new product ideas
•Internal idea sources:
•Intrapreneurial programs
•Internal social networks
•External idea sources:
•Competitors
•Customers
•Distributors and suppliers

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Idea Generation
•Crowdsourcing:
Inviting broad
communities of
people into the new
product innovation
process
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Idea Screening
•Screening new product ideas to spot good
ones and drop poor ones as soon as possible
•Ways of screening new ideas:
•New idea write-up reviewed by a committee
•R-W-W framework–Real, win, worth doing
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Product Concept
•A product concept is a detailed version of the
new product idea stated in meaningful
consumer terms.
•A product idea is an idea for a possible
product that the company can see itself
offering to the market.
•A product image is the way a product is
perceived by consumers.
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Concept Development
•Developing a new product into alternative
product concepts
•Find out how attractive each concept is to
customers
•Choose the best one
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Concept Testing
•Testing a group of target consumers to find
out the degree of consumer appeal toward
the concepts
•Methods:
•Presenting the concepts to consumers
symbolically or physically or with a word or
picture description
•Asking customers about their reactions to the
concepts
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Marketing Strategy Development
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•Initial marketing strategy for a new product
•The marketing strategy statement
•Describes the target market, the planned value
proposition, and the sales, market-share, and
profit goals for the first few years
•Outlines the planned product price, distribution,
and marketing budget for the first year
•Describes the planned long-run sales, profit
goals, and marketing mix strategy

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Business Analysis and
Product Development
•Business analysis: Review of the sales, costs,
and profit projections for a new product
•To find out whether the projections satisfy the
company’s objectives
•Product development: Develop the product
concept into a physical product
•To ensure that the product idea can be turned
into a workable market offering
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Test Marketing
•The product and its proposed marketing
program are introduced into realistic market
settings.
•Gives the marketer an experience with
marketing a product before the introduction
•Tests the product and its marketing program
•Costs can be high
•Time consuming
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Test Marketing
•Alternatives to standard test markets
•Controlled test markets
•Simulated test markets
•Reasons for using alternative test markets
•Reduce the costs of test marketing
•Speed up the process
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Commercialization
•Introducing a new product into the market
•Considerations for launching a new product
•Time
•Place
•Single location, region, national market, or
international market
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Managing New Product Development
•Requires a holistic approach
•Customer-centered new product development
•Team-based new product development
•Systematic new product development
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Customer-Centered New
Product Development
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•Focuses on finding new
ways to solve customer
problems and create
more customer-
satisfying experiences

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Team-Based and Systematic
New Product Development
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Figure 8.2 - Sales and Profits over the
Product’s Life from Inception to Decline
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Figure 8.3 - Styles, Fashions,
and Fads
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Table 8.2 - Summary of Product Life-
Cycle Characteristics and Objectives
Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317.
© 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.
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24. Copyright © 2015 Pearson Education, Inc.
Table 8.2 - Summary of Product
Life-Cycle Strategies
Source: Philip Kotler and Kevin Lane Keller, Marketing Management, 14th ed. (Upper Saddle River, NJ: Prentice Hall, 2012), p. 317.
© 2012. Printed and Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.
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Product Decisions and
Social Responsibility
•Considerations for companies
•Public policy issues
•Regulations regarding acquiring or dropping
products
•Patent protection
•Product quality and safety
•Product warranties
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International Product and
Services Marketing
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•Challenges
•To find what products and services to introduce
and in which countries
•To decide on how much to standardize or adapt
the products and services for world markets

27. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
•Explain how companies find and develop
new product ideas.
•List and define the steps in the new product
development process and the major
considerations in managing this process.
8 - 27

28. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
•Describe the stages of the product life cycle
and how marketing strategies change during
a product’s life cycle.
•Discuss two additional product issues:
socially responsible product decisions and
international product and services
marketing.
8 - 28

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retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2015 Pearson Education, Inc.Copyright © 2015 Pearson Education, Inc.