New Product Dev444

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

New to the World New Product Lines Additions Improvement s Repositionings Cost Reductions

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

Simple: Listen to your customers, intermediaries and other external associates carefully To create successful new products, the company must: Understand it’s customers, markets and competitors Develop products that deliver superior

Ashish Pillai

IBS Chandigarh

Overestimation of Market Size Product Design Problems Product Incorrectly Positioned, Priced or Advertised Costs of Product Development Competitive Actions

Ashish Pillai

IBS Chandigarh

Shortage of ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

The key to idea generation is interacting with customers and consumers regularly Attribute listing Forced relationships Morphological analysis Reverse assumption analysis New contexts Mind mapping Surveys Brainstorming

Ashish Pillai

IBS Chandigarh

Weeding out non-viable ideas and escalating the viable ideas. Drop Error: An other wise great new product idea gets dropped Go Error: An otherwise bad idea gets selected for further action

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

Product idea Product concept Category concept  Brand concept Concept testing Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency Conjoint analysis: A statistical technique in which respondents' utilities or valuations of attributes are inferred from the preferences they express for various combinations of these

Ashish Pillai

IBS Chandigarh

Target market’s size, structure, and behavior

Planned price, distribution, and promotion for the first year

Long-run sales and profit goals and marketing-mix strategy over time

Ashish Pillai

IBS Chandigarh

The idea may be great and the concept may be well appreciated, but at the end the idea should be a “sound business proposal” Costs & profits Breakeven analysis and risk analysis

Ashish Pillai

IBS Chandigarh

Prototype: The first physical form or service description of a new product, still in rough or tentative mode With complex products, there may be component prototypes as well as one finished prototype. On services, the prototype is. simply the first full description of how the service will work, and comes from the systems design or development function.

Ashish Pillai

IBS Chandigarh

The new product and its marketing plan are tested together in the market. A market test simulates the eventual marketing of the product Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets

Ashish Pillai

IBS Chandigarh

When: Timing First Entry Parallel Entry Late Entry

Where: The geographic strategy of product launch To Whom: How are planning to take the product and message right to the target segment? How: How are you planning to

Ashish Pillai

IBS Chandigarh

Awarenes s Interest Evaluatio n Trial Adoption

Ashish Pillai

IBS Chandigarh

Consumer Characteristics: The readiness of the target consumers to try new products

New Product Characteristics: How innovative is the product? Relative advantage Compatibility Complexity Divisibility Communicability

Organizational Characteristics: If the new product is a B2B product the

Ashish Pillai

IBS Chandigarh

Where do you place yourself with respect to: Windows Vista, MS Office 2007

Ashish Pillai

IBS Chandigarh

Ashish Pillai

IBS Chandigarh

Product line is narrow Keep prices high (skim) or launch “cheap” (penetration) Distribution is selective Target “early adopters” - experts Promotional budget very high Examples: Home networking, hybrid cars, HDTV, Blu Ray

Inform, Induce, Distribute

Ashish Pillai

IBS Chandigarh

Add more channels - broader distribution Still getting new customers Watch for “me too” new entrants Advertise in mass media … Compete on features Examples: Digital cameras (5 year ago), MP3 players

New: Features, Channels, Flankers, Segments

Ashish Pillai

IBS Chandigarh

Peak of sales volume Low cost per customer High profits Market share comes under attack because: Early adopters are already moving on

Time for strengthening the distribution network

Modify: Product, Program

Ashish Pillai

IBS Chandigarh

Declining sales and declining profits Late adopters and laggards remain as customers Competition is strong and products

• Increase have evolved

/ Maintain / Decrease Cut costs, milk the brand, prepare for • Harvest / Divest

Ashish Pillai

IBS Chandigarh

We have already covered the Product Life Cycle…. So why do we need to study Brand Life Cycle all over again? Is there a difference between a “Product” and a “Brand”? Do consumers behave differently towards brands and products? Do you think that brands will need different strategies than products? So…. Do you think the life cycle and the consequent changes required will be

Ashish Pillai

IBS Chandigarh

According to the American Marketing Association: A brand is a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller If used for the firm as a whole, the

Ashish Pillai

Brand A name, term, sign, symbol, design, or a combination of them, intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors Intangible E.g. 1: Pepsi / Coke E.g. 2: Band Aid

IBS Chandigarh

Product Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need

Tangible E.g. 1: Soda Pop E.g. 2: Adhesive bandage

Ashish Pillai

IBS Chandigarh

Think of how you became aware of them, why you bought them, why you prefer them, how you feel about them ... List them as they come to your mind Chose one brand you are very familiar with : What does this Brand do for you?

What does it MEAN to you? How do you relate to it ? …

Ashish Pillai

IBS Chandigarh

According to you, who makes the best cars in the world????? Ans:……… …………. Do you own one? Have you ever owned one? Have you ever driven one? Do you know anybody who owns one? How do you know ….. It is the best?

Ashish Pillai

IBS Chandigarh

User Culture

Attributes

Personality

Benefits

Values

Ashish Pillai

IBS Chandigarh

A persona  that overlays and includes the physical products/services The sum of fundamental values and attributes ascribed to it by people The entity that the consumers construct from the products’ meanings, symbols and images

Ashish Pillai

A

brand

is

IBS Chandigarh

essentially

a

container for a costumer’s complete experience with the offer and the company (Sergio Zyman)

Ashish Pillai

IBS Chandigarh

Source : K. L. Keller

Ashish Pillai

IBS Chandigarh

Apparel

:

61%

Tobacco

:

46%

Food Products

:

37%

Transportation Equip

:

Primary Metals

:

1%

Stone, Clay

:

0%

20%

Ashish Pillai

IBS Chandigarh

The classical marketing literature recognises the following four stages of brand life cycle: 2. Unbranded

Goods

3. Brands

as Reference

4. Brands

as Personality

5. Brand

as Icon

6. Brand

as Company

7. Brand

as Policy

Ashish Pillai

IBS Chandigarh

Unbranded Goods: Commodities & packaged goods; major proportion of goods in non-industrialized context; minor role in Europe/USA; supplier has power over consumer Brands as Reference: Brand name often name of maker; name used for identification; any advertising support focuses on rational attributes; name over time becomes guarantee of quality/consistency E.g: Kissan, USHA, Godrej

Brand as Personality: Brand name may be "stand alone"; marketing support focuses on

Ashish Pillai

IBS Chandigarh

Brand as Icon:

Consumer now ‘owns’ brand; brand taps into higher-order values of society; advertising assumes close relationship; use of symbolic brand language; often established internationally E.g: Marlborro, Nike

Brand as Company:

Brands have complex identities; consumer assesses them all; need to focus on corporate befits to ‘diverse’ consumers; integrated communication strategy essential through-the-line E. g: IKEA, ICICI

Brand as Policy:

Company and brands aligned to social and political issues; Consumers ‘vote’ on issues through companies; consumers now ‘own’