?2000 Prentice Hall
Objectives
? Challenges in New Product Development (NPD)
? Organizational Structure & NPD
? Stages & Management of NPD
? Diffusion & Adoption of New Products
?2000 Prentice Hall
Why New Products Fail
?, Over Championing”
? Overestimated Demand
? Poor Design
? Poor Marketing Execution
? High Development Costs
? Strong Competitive Reaction
?2000 Prentice Hall
Challenges in NPD
? Idea Shortage
? Fragmented Markets
? Social & Governmental Constraints
? Cost
? Capital Shortage
? Need for Speed
? Shorter Product Life Cycles
?2000 Prentice Hall
Probability of Success
Probability
of technical
completion
Overall
probability
of success =
Probability of
commercialization
given technical
completion
X Probability of economic success given
commercialization
X
?2000 Prentice Hall
Concept Development & Testing
1,Develop Product Ideas into
Alternative Product Concepts
2,Concept Testing - Test the Product
Concepts with Groups of Target Customers
3,Choose the Best One
?2000 Prentice Hall
Consumer-Goods Market Testing
Sales-
Wave
Research
Test offering trail to
a sample of
consumers in
successive
periods,
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,
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee,
?2000 Prentice Hall
Commercialization
When
Where
Whom
Product
Price
Place
Promotion
?2000 Prentice Hall
Characteristics of the Innovation Rate
of Adoption
? Relative advantage
? Compatibility
? Complexity
? Divisibility
? Communicability