New-Product Development and Product Life-Cycle Strategies
Chapter 10
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Objectives
Understand panies find and develop new-product ideas.
Learn the steps in the new-product development process.
Know the stages of the product life cycle.
Understand how marketing strategies change during the product’s life cycle.
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$50 billion in profits over 27 years
Early new-product development relied heavily on copying petition
$ billion annually invested in R & D
Innovation is critical to Microsoft’s future ess
Much of R & D efforts are related
Many new products and services are in development
Microsoft
Case Study
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Definition
New Product Development
Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.
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New products can be obtained via acquisition or development.
New products suffer from high failure rates.
Several reasons account for failure.
New Product Development Strategy
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New Product Development Process:
Stage 1: Idea Generation
Internal idea sources:
R & D
External idea sources:
Customers, competitors, distributors, suppliers
New Product Development Strategy
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New Product Development Process:
Stage 2: Idea Screening
Product development costs increase substantially in later stages.
Ideas are evaluated against criteria; most are eliminated.
New Product Development Strategy
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New Product Development Process:
Stage 3: Concept Development and Testing
Product concepts provide detailed versions of new product ideas.
Concept tests ask target consumers to evaluate product concepts.
New Product Development Strategy
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New Product Development Process:
Stage 4: Marketing Strategy Development
Strategy statements describe:
The target market, product positioning, and sales, share, and profit goals for the first few years.
Product price, distribution, and marketing budget for the first year.
Long-run sales and profit goals and the marketing mix strategy.
New Product D
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