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Summary (Chpt.9) Developing New Products and Managing The Product Life Cycle
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- University Of The Witwatersrand (wits)
(Chpt.9) Developing New Products and Managing The Product Life Cycle
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Principles of Marketing by ProfessorBurgerQueenDeveloping New Products and Managing
The Product Life Cycle
- New product development refers to original products, product improvements, product
modifications, and new brands developed form the firm’s own R&D
- New products bring new solutions and variety to customer’s lives, and they are a key
source of growth for companies
- Yet, innovation can be very expensive and very risky. Estimates say that 66% of all
new products fail within 2 years
- There are many reasons why, these include incorrect timing, pricing, positioning or
advertising, poor product design, and overestimated market size
New Product Development Process
1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Test marketing
8. Commercialisation
- Idea generation is the systematic search for new product ideas, using internal
sources like company R&D, or external sources such as distributors
- Distributors are close to the market and can pass along information about
customer problems and new product possibilities
- Idea screening identifies good ideas and rops poor ones using the RWW screening
framework
- Is it Real?
- Can we Win?
- Is it Worth doing
- Product development costs rise greatly in the later stages, so the company wants to
only pursue those product ideas that will turn into profitable products
- New product idea write-ups describe the product, proposed customer value
proposition, target market, and competition. It makes rough estimates of 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. The
company should be able to answer yes to all three RWW questions before
developing the new product idea further
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