kotler • keller

Kotler • KellerPhillip Kevin Lane

Marketing Management • 14e

Chapter 20

Introducing New Market Offerings

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 31

Discussion Questions

1. What challenges does a company face in developing new 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-product development process?

5. What factors affect the rate of diffusion and consumer adoption of newly launched products and services?


New Product Options

Make or Buy

Types of New Products

NewImprovedFormula


New-Product Development Challenges

The Innovation Imperative

New Product Success

New Product Failure


Organizational Arrangements

Customer-driven Engineering

Budgeting for NPD

Organizing New Product Development


Tabl

e 20

.1

Finding One Successful New Product

StageNumber 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


Organizing New Product DevelopmentCross-functional Teams

“Skunkworks”

Stage-gate Systems


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20.1

New-Product Decision Process


Generating IdeasEmployees

Competitors

Crowd Sourcing

Lead Users


Creativity Techniques

Lateral Marketing

Mind Mapping

Attribute Listing

Morphological Analysis

Forced Relationships


Ideas – Screening

Product Success Requirements

Relative Weight (a)

Product Score (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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20.2 Forces Fighting New Ideas


Concept to Strategy

Concept Development Business Analysis

Marketing Strategy Development


Concept Development

Concept 2

Concept 3Concept 1


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20.3 Continuum of Evaluation for Products


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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20.4 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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Marketing Strategy Development

Marketing Mix

Target Market’s • Size• Structure• Behavior

Marketing-mix strategy


Business Analysis

Estimating Costs and ProfitsEstimating Total Sales


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20.6

PLC Sales for Three Types of Products


Development to CommercializationProduct Development

Commercialization

Market Testing


Product Development

Physical Prototype

Alpha Testing(Internal)

Beta Testing(Customers) Customer Tests


Market Testing

Simulated Test Marketing

Controlled Test Marketing

Sales-Wave Research

Test Markets


Commercialization

How?

To Whom?

When?

Where?


The Consumer-Adoption Process

Stages in the Adoption Process


The Consumer-Adoption Process

Influencing Factors

• Buyer Readiness

• Personal Influence

• Innovation Characteristics

• Organizations Readiness


Buyer Readiness

Innovators

Early Adopters

Early Majority

Late Majority

Laggards


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Innovation Characteristics

Communicability

Relative AdvantageCompatibility

Complexity

Divisibility

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