Chapter 9 Product Planning and Development

1、Chapter 9Product Planning andDevelopmentCopyright 2001 by McGraw-Hill Ryerson LimitedSommers BarnesNinth Canadian EditionPresentation by Karen A. BlotnickyMount Saint Vincent University, Halifax, NSChapter GoalsTo gain an understanding of:The meaning of total “product and “new productClassification

2、of business and consumer products and its relevance to marketing planningProduct innovationThe product-development processWhen to add new products to a product lineThe adoption and diffusion process for productsOrganizational structures for product planning and development2What is a Product?it is mo

3、re than physical products; includes services, places, persons, and ideasit is easy to visualize the products of Esso, but more difficult to describe those of the Toronto Symphony, UNICEF, or the Salvation Armysome products are sold only to consumers, while others are sold to organizationswhether a p

4、roduct is a consumer product or a business product depends on how it is used3SellersservicesProductqualityPhysicalcharacteristicsof goodsPriceBrandDesignPackagingProductwarrantySellersreputationColourThe Total Product4Consumer Goods ClassesConsumer products can be classified by the buying behaviour

5、of the consumers:Convenience goods are bought with little time and effort, such as milk, bread, a chocolate bar.Shopping goods are those where extensive comparison is the norm- cars, furniture, clothes.Specialty goods are those for which consumers have a strong brand preference. BMW, Armani.Unsought

6、 goods are those now unknown to the consumer or, if known, undesired.5Classifying Business Productsraw materials: unprocessed, become part of other manufactured productsmanufactured parts and materials: processed products that become part of other productsinstallations: major buildings and equipment

7、accessory equipment: used in operations, include computers, desks, toolsoperating supplies: low value, used by most firms, convenience products for businesses6Innovation is RequiredProducts go through life cycles- you need new ones coming on stream.Profits highest when products new.Consumers more se

8、lective: they look carefully at each purchase. Also a little jaded.High failure rates in the 75% range.Leads to new products:Innovative= truly uniqueImproved, with valuable new benefitsImitative, another “me too product.71. Fords Edsel automobile.2. Duponts Corfam synthetic leather.3. Polaroids Pola

9、vision.4. United Artists Heavens Gate western movie.5. RCAs Videodisc.6. Times TV-Cable Week magazine.7. IBMs PCjr.8. New Coke.9. R.J. Reynolds Premier cigarette.10. Nutrasweets Simplesse fat substitute.Ten World-Class Product Failures8New Product Developmentcompanies must be constantly modifying ex

10、isting products and developing new ones; the marketplace demands ithow new is new? most new products are modifications of or extensions to existing onesthe introduction of a new product is a strategic decision which should be guided by the companys goals and a new product introduction strategy9Ident

11、ifythe strategicrole of newproducts,then.1.Ideageneration2.Screeningof ideas3.Businessanalysis4. Prototypedevelopment5.MarketTests6.Commer-cializationThe New Product Development Process10The New Product Development ProcessA new product is best developed through a series of six stages:The first two s

12、tages provide a focus for generating new-product ideas and a basis for evaluating them.The next three stages deal with ideas and are the least expensive.In their haste, some companies skip stages the most common omission being market tests.9-711Criteria for New Productsthere must be adequate market

13、demand: this is necessary but not sufficient for successmust satisfy key financial criteriamust be compatible with environmental standardsmust fit with the companys marketing structureshould also be compatible with production capabilities, satisfy legal requirements, and fit with corporate goals and

14、 objectives12Development of New Product StrategyCompany GoalsProduct StrategyExamplesDefend market shareIntroduce addition toexisting produce line/ revise existing productPizza Huts “BigNew Yorker” and “Stuffed Crust” piesStrengthenreputation as an innovatorIntroduce a really new product - not just

15、an extension of an existing productDigital camerasintroduced by Sony, Canon, and other firms13Adoption-Diffusion Processdifferent new products are adopted by consumers at different ratesthe individual consumer goes through certain stages before adopting a new productmarketers must be interested in f

16、irst creating awareness, then interest, then trial, before the consumer is considered an adoptersome people are genuine innovators, while others wait and try later; some never adopt14New Product Adoption and DiffusionAdoption process: The decision-making activity of an individual through which the n

17、ew product is accepted.Diffusion: The process by which an innovation is spread through a social system over time.15Stages in the Adoption Processawareness: customer is exposed to the productinterest: interest and information seekingevaluation: assessment of the advantages and disadvantages of the ne

18、w producttrial: customer tries the product in low-risk situation; may be a sample or test driveadoption: customer decides to buy the productconfirmation: customer decides to stay with the product; attempts dissonance reduction16Adopter CategoriesResearchers have identified five categories of individ

19、ual adopters for new products:Innovators 3% of the market.Early adopters 13% of the market.Early majority 34% of the market.Late majority 34% of the market.Laggards 16% of the market.In addition, some individuals nonadopters never accept the innovation.17Evaluation of new safer baseball for youngsters:1. Relative advantagesuperior to current ball