Objectives
ObjectivesObjectives
Objectives
Challenges in New Product Challenges in New Product
Development (NPD)
Development (NPD)
Organizational Structure & NPDOrganizational Structure & NPD Stages & Management of NPDStages & Management of NPD
Why New Products Fail
Why New Products FailWhy New Products Fail
Why New Products Fail
““Over Championing”Over Championing”
Overestimated DemandOverestimated Demand Poor DesignPoor Design
Poor Marketing ExecutionPoor Marketing Execution High Development CostsHigh Development Costs
Challenges in NPD
Challenges in NPDChallenges in NPD
Challenges in NPD
Idea ShortageIdea Shortage
Fragmented MarketsFragmented Markets
Social & Governmental ConstraintsSocial & Governmental Constraints
CostCost
Capital ShortageCapital Shortage
Need for SpeedNeed for Speed
New Product Development
New Product Development
Process
Process
New Product Development
New Product Development
Process
and Testing
and Testing
Probability of Success
Probability of SuccessProbability of Success
Probability of Success
Probability
Probability
of technical
of technical
completion
of success
of success
=
=
Probability of
Probability of
commercialization
commercialization
given technical
given technical
completion
completion
X
X
Probability ofProbability ofeconomiceconomic success givensuccess given
commercialization
commercialization
X
Concept Development &
Concept Development &
Testing
Testing
Concept Development &
Concept Development &
Testing
Testing
1. Develop Product Ideas into Alternative Product Concepts 1. Develop Product Ideas into Alternative Product Concepts
2. Concept Testing - Test the Product Concepts with Groups of Target Customers
2. Concept Testing - Test the Product Concepts with Groups of Target Customers
High price/oz.
High price/oz.
L
Low price/oz.
Low price/oz.
H
Product & Brand
Product & Brand
Positioning
Positioning
Product & Brand
Product & Brand
Positioning
Positioning
(a) Product-positioning
(a) Product-positioning
map
map
(breakfast market)
(breakfast market)
Expensive
Pancakes Instant
breakfast Cold cereal
Hot cereal
b) Brand-positioning
b) Brand-positioning
map
map
(instant breakfast market)
(instant breakfast market)
Brand C
Conjoint Analysis
Conjoint AnalysisConjoint Analysis
Conjoint Analysis
Brand name Brand name
--Retail Price Retail Price
U
Good Housekeeping Seal? Good Housekeeping Seal?
Consumer-Goods Market
Consumer-Goods Market
Testing
Testing
Consumer-Goods Market
Consumer-Goods Market
Testing
Testing
Sales-Wave Research
Test offering trail to a sample of
consumers in successive
Sales-Wave Research
Test offering trail to a sample of
consumers in successive
Simulated Test Market
Test in a simulated shopping environment
to a sample of consumers.
Simulated Test Market
Test in a simulated shopping environment
to a sample of consumers.
Standard Test Market
Full marketing campaign in a small number of representative cities.
Standard Test Market
Full marketing campaign in a small number of representative cities.
Controlled Test Market
A few stores that have agreed to carry new
products for a fee.
Controlled Test Market
A few stores that have agreed to carry new
Commercialization
CommercializationCommercialization
Commercialization
When
Where
Whom
Product Price Place
2 1/2%
Innovators 13 1/2% Early adopters
34% Early majority
34% Late majority
16% Laggards
Time of adoption innovations
Adopter Categorization of the Basis of
Adopter Categorization of the Basis of
Relative Time of Adoption of Innovations
Relative Time of Adoption of Innovations Adopter Categorization of the Basis of
Adopter Categorization of the Basis of
Relative Time of Adoption of Innovations
Characteristics of the
Characteristics of the
Innovation Rate of Adoption
Innovation Rate of Adoption Characteristics of the
Characteristics of the
Innovation Rate of Adoption
Innovation Rate of Adoption
Relative advantageRelative advantage CompatibilityCompatibility
ComplexityComplexity DivisibilityDivisibility
Review
ReviewReview
Review
Challenges in New Product Challenges in New Product
Development (NPD)
Development (NPD)
Organizational Structure & NPDOrganizational Structure & NPD Stages & Management of NPDStages & Management of NPD
