new product development and current trends … management/new product... · new product development...
TRANSCRIPT
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Deepak Damalla Student ID : 830328 Master in Biomedical Engineering, FH Aachen
NEW PRODUCT DEVELOPMENT
AND CURRENT TRENDS IN
MANAGEMENT
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PRODUCTS AND SERVICES
• Product functions across culture
• Standardization vs. customization; adaptation as a compromise
• Communication vs. product adaptations
• Branding
• Services
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Review issues
• Country economics – Demand for quality vs. low cost
– Cost of labor
• Within country segment variations
• Local competitive situation – Overall competition
– Competition for specific product lines
– Possible competition with partners in other countries
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Product Need Satisfaction
• Products serve different purposes in different
countries; e.g.,
– Autos: transportation in U.S.; largely status
symbol in Japan
– Toothpaste: Cavity prevention in U.S.; breath
freshener in Ireland
– Tang: convenience, low cost beverage in U.S.;
pineapple flavor as special treat in Brazil (real
oranges are cheap and plentiful)
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Approaches to Product Introduction
Not suitable for
the Middle East!
Customization Localization
Adaptation Standardization
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Product Design Philosophies
STANDARDIZATION
ADAPTATION
CUSTOMIZATION
ETHNOCENTRIC
GEOCENTRIC
POLYCENTRIC
REGIOCENTRIC
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Product Adaptations • Mandatory
– legal requirements
– infrastructure
– physical requirements
• “Discretionary”
– local tastes
– fit into cultural
environment
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Motivations for Adaptation
• Legal
• Infrastructure
• Consumer
demographics
• Culture
– Religious
impact
– Cultural context
of use
• Local traditions/
customs—e.g.,
– Food usage
occasions
– Aesthetic
preferences
• Local usage
conditions
• Pricing
pressures/
tradeoffs
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The Reality: Continuum of “Mandatoriness”
Completely
mandatory Completely
“discretionary”
Electric
Voltage
Product
labeling
Taste
Optimization
Style, color
Performance
Optimization
Strong
Cultural
Conflict
Legal
requirements
Economic
Suitability
Manner of use
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Mandatory Adaptation Issues
• Choices in approach to mandatory
conditions--examples
– Power drills with noise suppression
filters
– Non-public ear piercing in Japan
• Distribution and promotion implications
• “Arbitrary” standards (e.g., TV, DVD
players)
• Conflicting rules between
countries—may not be possible to
make product legal in all
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Compatibility Issues
• Basic requirements
– E.g., voltage, infrastructure, plugs
• Compatibility
– Ability to be used within a local system (e.g.,
frequencies, electronic protocols)
• Multi-system compatibility
– Product can be set to operate within several
standards
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Global Product Lines
• Historical decisions – Very difficult to change position of a
product
• Mergers and acquisitions – Trademark ownership across markets
• Preferences – For products
– For manufacturers of product types
• Capacity
• Product Life Cycle (PLC) and market growth
• Channels
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Entry Timing Strategy
• Waterfall
– Initial introduction in
selected market(s)
with “trickle down”
to markets of later
entry
• Market readiness
• Concentration of
resources
• Sprinkler
– Immediate entry
into all targeted
markets
– Preemption of
early entry
advantage
– Fewer resources
available for
each market
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Definitions
Innovation: “An idea, practice, or
product perceived to be new by
the relevant individual or group.”
Diffusion process: “The manner in
which innovations spread
through the market.”
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Notes on Degrees of Innovation
• Newness must be considered in context of
– Local market
– Segment within market
• The less continuous an innovation (for a
given region), the more marketing is
needed
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To Adopt or Not to Adopt: How Will
Consumers Answer the Question?
• Some causes of resistance to
adoption
– perceived risk--financial and social
– self image
– effort to implement and/or learn to
use the product
– incompatibility
– inertia
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Types of Innovations • Fashions—preferred styles change
over time; often with repetition
• Fads—a product or practice gains
large but temporary interest (can be
revised)
• Trends—the prevalence of usage or
acceptance of a product or practice
increases or decreases consistently
over time
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Societal Conditions Conducive to
Diffusion
• Modernity
• Homophily
• Physical distance
• High proportion of women in
the workforce
• Opinion leadership
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Developing New Global Products
IDEA
GENERATION
SALES
FORECAST
TEST
MARKETING
CONCEPT
RESEARCH
PRELIMINARY
SCREENING
FOCUS
GROUPS
CONCEPT
TESTING
TARGET
RESEARCH
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Branding Choices
BRANDING NO BRAND
NATIONAL/
LOCAL INTERNATIONAL
MANUFACTURER PRIVATE LABEL
MULTIPLE
BRANDS
SINGLE
BRAND
“UMBRELLA”
BRANDS
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Branding Choices--Notes
• Combinations are possible—e.g.,
– Own branding plus additional sales to store
branding
– International brand (e.g., Coca Cola) plus local
brand(s), usually sold at lower prices
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Branding Issues
• Demand spillover
– Media coverage
– Internet exposure
• Global customers
• Scale economies
• Importance of brands within country
– Country of origin
– Expertise
– Prestige
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Local Market Branding Expectations
• Asian consumers typically have more concern with brands
– conglomerates have brands encompassing large range of goods (e.g., Mitsubishi food products)
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Brand Globalization Potential
• Word meanings
• Word appeal
– Pleasantness of
associations
– Suitability of
associations
– Pronouncability
– Pleasantness of
sound
– Writing and
pictoral
appearance
• Trademark and
name availability
– Access to desired
name
– Protection against
close imitations by
others (e.g.,
Lindows)
• Complementarity
with other product
line items
• Growth plans—
regional vs.
international
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Positioning a Brand
• Position relative to existing brands?
– Same
– Generally better
– Foreign image
– Lower price
– Special, unique benefit
• Appeal across segments?
• Usage occasion/need
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Counterfeit Products
• Impact
– Loss of sales
– Loss of exclusivity/price pressure
– Possible lack of confidence in quality
– Warranty issues
• Approaches
– Legal
– “Search and destroy”
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Physical Product vs. Communication
Adaptations Communication
adaptations not
needed
(extension)
Communication
adaptations
needed
Product
adaptations not
needed
(extension)
Some industrial
equipment; some
electrical
equipment
Bicycle; some fast
food; chewing gum
Product
adaptations
needed
Gasoline; laundry
detergent
Greeting cards;
some fast food
Domestic
equivalent does
not exist (product
invention)
Compass-equipped prayer rug; hand
powered washing machine; bottled
green tea
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The International Life Cycle • Market for older
technology tends to exist in less developed countries – Manufacturing of
older generation technology—e.g., Pentium I computers
– Resale of capital equipment—e.g., DC 8 aircraft, old three part canning machines
• Some countries tend to be more receptive to innovation than others
• “Leap frogging” – Going directly
from old technology to the very newest, skipping intermediate step (e.g., wireless rather than wired technology)
• Shortening of product life cycles
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Country of Origin Effects
• Perception of product
– quality (e.g., Japan, Germany)
– elegance and style (e.g., France, Italy)
• Historical associations
• Positioning strategies
– Emphasis on origin (e.g., French wine)
– De-emphasis/obfuscation of of country of
origin (e.g., French beer, American products
with French language labels)
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Services
• Scope
• Characteristics
– Intangibility
– Heterogeneity
– Inseperability
– Perishability
• The Service-Tangible Product
Continuum
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Service Issues
• Country expectations – Willingness to
pay
– Quality
– Speed
– Competence of personnel
– Courtesy/deference
– Decision making authority of personnel
• Cost
• Availability of skilled personnel
• Control over personnel performance
• Overhead issues
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Thank You