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Kotler KellerPhillip Kevin Lane

Marketing Management 14e

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Introducing New Market

Offerings

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Discussion Questions

1. What challenges does a company face in developingnew products and services?

2. What organizational structures and processes do

managers use to oversee new-product development?

3. What are the main stages in developing new products

and services?

4. What is the best way to manage the new-productdevelopment process?

5. What factors affect the rate of diffusion and consumer

adoption of newly launched products and services?

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New Product Options

Make or Buy

Types of New Products

Improved

Formula

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New-Product Development Challenges

The Innovation Imperative

New Product Success

New Product Failure

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Organizational Arrangements

Customer-driven Engineering

Budgeting for NPD

Organizing New

Product Development

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Finding One Successful New Product

Stage

Number

of Ideas

Pass

Ratio

Cost

per Idea Total Cost

1. Idea Screening 64 1:4 $1,000 $64,000

2. Concept Testing 16 1:2 20,000 320,000

3. Product Development 8 1:2 200,000 1,600,000

4. Test Marketing 4 1:2 500,000 2,000,000

5. National Launch 2 1:2 5,000,000 10,000,000

$13,984,000

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Organizing New Product Development

Cross-functional Teams

Skunkworks

Stage-gate Systems

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New-Product Decision Process

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Generating Ideas

Employees

Competitors

Crowd Sourcing

Lead Users

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Creativity Techniques

Lateral Marketing

Mind Mapping

Attribute Listing

Morphological

Analysis

ForcedRelationships

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Ideas Screening

Product SuccessRequirements

RelativeWeight (a)

ProductScore (b)

Product Rating(c=a x b)

Unique or superior product .40 .8 .32

High performance-to-cost ratio .30 .6 .18

High marketing dollar support .20 .7 .14

Lack of strong competition .10 .5 .05

Total 1.00 .69

Overall

probability

of success

Probability

of technical

completion

Probability of

commercialization

given technical

completion

Probability of

economic

success given

commercialization

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Forces Fighting New Ideas

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Concept to Strategy

Concept Development Business Analysis

Marketing Strategy Development

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Concept Development

Concept 2

Concept 3Concept 1

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Continuum of Evaluation for Products

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Concept Testing

Product Dimensions

1. Communicability and Believability

2. Need level

3. Gap level

4. Perceived value

5. Purchase intention

6. User targets, purchase occasions,

frequency

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Conjoint Analysis

Design Elements

Three package designs (A, B, C) Three brand names (K2R, Glory, Bissell)

Three Prices ($1.19, $1.39, $1.59)

A possible Good Housekeeping seal (yes, no)

A possible money-back guarantee (yes, no)

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Continuum of Evaluation for Products

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Marketing Strategy Development

Marketing Mix

Target Markets

Size Structure

Behavior

Marketing-mix strategy

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Business Analysis

Estimating Costs and ProfitsEstimating Total Sales

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PLC Sales for Three Types of Products

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Development to Commercialization

Product Development

Commercialization

Market Testing

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Product Development

Physical Prototype

Alpha Testing

(Internal)

Beta Testing

(Customers)Customer Tests

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Market Testing

Simulated

Test Marketing

Controlled

Test Marketing

Sales-Wave

Research

Test Markets

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Commercialization

How?

To Whom?

When?

Where?

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The Consumer-Adoption Process

Stages in the Adoption Process

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The Consumer-Adoption Process

Influencing Factors

Buyer Readiness

Personal Influence

Innovation Characteristics Organizations Readiness

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Buyer Readiness

Innovators

Early Adopters

Early Majority

Late Majority

Laggards

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Continuum of Evaluation for Products

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Innovation Characteristics

Communicability

Relative AdvantageCompatibility

Complexity

Divisibility