Summary
Summary comm 223 (COMM223)
- Course
- Comm 223 (COMM223)
- Institution
- Concordia University ( )
Marketing course. Notes for final exam chapter 8 to 12
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Chapter 8: Developing New Products and Managing the Product Life CycleNew Product Development Strategy
- New products are original products, product improvements, product
modifications, and new brands that the firm develops through its own research
and development efforts.
- Developing new products through the firm’s own research and development
efforts
- Creating successful new products requires
o Understanding consumers, markets, and competitors
o Developing products that deliver superior value to customers
- Companies find and develop new product ideas from:
1. Internal sources: Companies conduct formal R&D, or they pick the
brains of their employees, urging them to think up and develop new
product ideas. Other ideas come from
2. External sources: Companies track competitors’ offerings and obtain
ideas from distributors and suppliers who are close to the market and
can pass along information about consumer problems and new product
possibilities.
3. Customers themselves: Companies observe customers, invite them to
submit their ideas and suggestions, or even involve customers in the
new product development process.
- Innovation can be very expensive and very risky.
o New products face tough odds
- Reasons for failure include:
o Overestimate market size
o Poor designed
o Incorrectly positioned
o Wrong timing (launch)
o Priced too high
o Poorly advertised
,Idea Generation
- Systematic search of new product ideas
- Internal idea sources
o Internal social networks
o Intrapreneurial programs
- External idea sources
o Distributors and suppliers
o Competitors
o Customers
- Under Armor sponsors an annual crowdsourcing competition called the Future
Show Innovation Challenge.
Idea Screening
- Screening new product ideas to spot good ones and drop poor ones as soon as
possible
- Ways of screening new ideas:
o New idea write-up reviewed by a committee: Many companies require
their executives to write up new product ideas in a standard format that
can be reviewed by a new product committee. The write-up describes the
product, value proposition, the target market, and the competition. It also
estimates market size, product price, development time and costs,
manufacturing costs, and rate of return. The committee then evaluates
the idea against a set of general criteria.
, o R-W-W framework—Real, win, worth doing: The company should be able to
answer yes to all three R-W-W questions before developing the new
product idea further.
Is it real? Is there a real need and desire for the product and will
customers buy it? Is there a clear product concept and will such a
product satisfy the market?
Can we win? Does the product offer a sustainable competitive
advantage? Does the company have the resources to make such a
product a success?
Is it worth doing? Does the product fit the company’s overall
growth strategy? Does it offer sufficient profit potential?
Product Concept
- A product idea is an idea for a possible product that the company can see itself
offering to the market.
- A product concept is a detailed version of the new product idea stated in
meaningful consumer terms.
- Product image is the way consumers perceive an actual or potential product.
Concept Development
- This is Tesla’s initial all-electric roadster. Later, more affordable mass-market
models will be developed.
- Developing a new product into alternative product concepts: Example: Tesla
objective for a more affordable, mass-market compact version
o CONCEPT 1. An affordably priced compact car designed as a second family
car to be used around town for running errands and visiting friends.
o CONCEPT 2. A mid-priced sporty compact appealing to young singles and
couples.
o CONCEPT 3. A “green” everyday car appealing to environmentally
conscious people who want practical, no-polluting transportation.
o CONCEPT 4. A compact crossover SUV appealing to those who love the
space SUVs provide but lament the poor gas mileage.
- Find out how attractive each concept is to customers
- Choose the best one
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