Lectures Marketing management: Chapter 20 - ThS. Nguyễn Tiến Dũng

CHAPTER 20
INTRODUCING NEW MARKET OFFERINGS

Nguyen Tien Dung, MBA
Email:


Chapter Questions
● What challenges does a company face in developing new
●
●
●
●

products and services?
What organizational structures and processes do
managers use to manage new-product development?
What are the main stages in developing new products
and services?
What is the best way to manage the new-product
development process?
What factors affect the rate of diffusion and consumer
adoption of newly launched products and services?

© Nguyễn Tiến Dũng

2


Main Contents
1. New Product Options

2. Challenges in New-Product Development
3. Organisational Arrangements
4. The Consumer-Adoption Process

© Nguyễn Tiến Dũng

3


1. New Product Options
● Make or Buy
● Types of New Products
● New to the world
● New to the company

● Improvements of existing products

© Nguyễn Tiến Dũng

4


The World’s
Most Innovative Companies
● Apple

● IBM

● Google

● Sony

● Toyota

● Wal-Mart

● General Electric

● Honda

● Microsoft

● Starbucks

● Procter & Gamble

● Target

● 3M

● BMW

● Walt Disney

● Samsung

© Nguyễn Tiến Dũng

5

2. Challenges in New-Product Development
● The Innovation Imperative
● New-Product Success
● Incremental innovation
● Disruptive technologies: higher risk, higher return
● iPhone 3 – 3S – 4 – 4S – 5 – 5S

● New-Product Failure

© Nguyễn Tiến Dũng

6


New Product Failure
● Shortage of important ideas in certain areas.
● Fragmented markets.
● Social, economic, and governmental constraints
● Cost of development

● Capital shortages
● Shorter required development time
● Poor launch timing
● Shorter product life cycles
● Organizational support
© Nguyễn Tiến Dũng

7

3. Organisational Arrangements
● Budgeting for New-Product Development
● Organising New-Product Development
● Product managers
● New-product managers who report to category

managers.
● Growth leaders—a full-time job for its most
creative and successful managers
● A high-level management committee
● A new-product department

© Nguyễn Tiến Dũng

8


Budgeting for New Product Development

© Nguyễn Tiến Dũng

9


4. Managing the New Product Development Process

© Nguyễn Tiến Dũng

10

Generating New Ideas: Ways to Find Great New Ideas
● Run informal sessions with customers
● Allow time off for technical people to putter

on pet projects
● Make customer brainstorming a part of plant
tours
● Survey your customers
● Undertake “fly on the wall” research to
customers

© Nguyễn Tiến Dũng

11


© Nguyễn Tiến Dũng

12


© Nguyễn Tiến Dũng

13


Seven Notions of Innovation
● See the future through the eyes of your customer

● Intellectual property and brand power are key

assets
● Use digital technology to create tools for
customers
● Build a championship team
● Innovation is a state of mind
● Speed is critical, so push your organization
● Partner up if you’re not the best

© Nguyễn Tiến Dũng

14


More Ways to Find Great Ideas
● Use iterative rounds with customers
● Set up a keyword search to scan trade

publications
● Treat trade shows as intelligence missions
● Have employees visit supplier labs
● Set up an idea vault

© Nguyễn Tiến Dũng

15


Drawing Ideas from Customers

● Observe customers using product
● Ask customers about problems with products
● Ask customers about their dream products
● Use a customer advisory board or a brand

community of enthusiasts to discuss product

© Nguyễn Tiến Dũng

16


Idea Generation: Creativity Techniques
● Attribute listing
● Forced relationships
● Morphological analysis
● Reverse assumption analysis
● New contexts
● Mind mapping

© Nguyễn Tiến Dũng

17


Lateral Mapping
● Gas stations + food
● Cafeteria + Internet
● Cereal + snacking
● Candy + toy

● Audio + portable

© Nguyễn Tiến Dũng

18


Variations on Failure
● Absolute product failure
● Partial product failure
● Relative product failure

© Nguyễn Tiến Dũng

19


Concept Testing
● Communicability and believability
● Need level
● Gap level
● Perceived value
● Purchase intention
● User targets, purchase occasions,

purchasing frequency

© Nguyễn Tiến Dũng

20

Marketing Strategy
● Target market’s size, structure, and behavior
● Planned price, distribution, and promotion for

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

© Nguyễn Tiến Dũng

21


Product Development
● Quality function

deployment
(QFD)
● Customer

attributes
● Engineering
attributes

© Nguyễn Tiến Dũng

22

Prototype Testing
● Alpha testing
● Beta testing
● Rank-order method
● Paired-comparison method

● Monadic-rating method

● Market testing

© Nguyễn Tiến Dũng

23


Consumer Goods Market Testing
● Sales-Wave Research
● Simulated Test Marketing
● Controlled Test Marketing
● Test Markets

© Nguyễn Tiến Dũng

24


Test Market Decisions
● How many test cities?
● Which cities?

● Length of test?
● What information to collect?
● What action to take?

© Nguyễn Tiến Dũng

25