MARKETING MANAGEMENT

12th edition

20
Introducing New
Market Offerings

Kotler Keller
Chapter Questions

• What challenges does a company face in

developing new products?
• What organizational structures are used to
manage new-product development?
• What are the main stages in developing new
products?
• What is the best way to set up the new-product
development process?
• What factors affect the rate of diffusion and
consumer adoption of newly launched products?
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3M Emphasizes
New Product Development

20-3
Categories of New Products

New-to-the-world

New product lines

Additions

Improvements

Repositionings

Cost reductions
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Innovations

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Factors That Limit New Product
Development
• Shortage of ideas
• Fragmented markets
• Social and governmental constraints
• Cost of development
• Capital shortages
• Faster required development time
• Shorter product life cycles

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Table 20.1 Finding One
Successful New Product

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Venture Team

Cross-functional group charged with

developing a specific product or business;
intrapreneurs are relieved of other duties
and provided a budget and time frame.

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Criteria for Staffing Venture Teams

• Desired team leadership style

• Desired level of leader
expertise
• Team member skills and
expertise
• Level of interest in concept
• Potential for personal reward
• Diversity of team members

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Figure 20.1 The New Product-
Development Decision Process

20-10
Idea Generation: Creativity Techniques

• Attribute listing
• Forced relationships
• Morphological
analysis
• Reverse assumption
analysis
• New contexts
• Mind mapping

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Lateral Mapping

• Gas stations + food

• Cafeteria + Internet
• Cereal + snacking
• Candy + toy
• Audio + portable

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Variations on Failure

• Absolute product failure

• Partial product failure
• Relative product failure

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Table 20.2 Product-Idea Rating Device

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Concepts in Concept Development

• Product idea
• Product concept
• Category concept
• Brand concept
• Concept testing

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

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Figure 20.5 Utility Functions Based
on Conjoint Analysis

20-17
Airlines Use Conjoint Analysis

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Marketing Strategy
• Target market’s size, structure, and
behavior
• Planned price, distribution, and promotion
for Year 1
• Long-run sales and profit goals and
marketing-mix strategy over time

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Figure 20.6 PLS Sales for Three
Product Types

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Table 20.3 Projected 5-year Cash-Flow
Statement (in thousands $)

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Product Development
• Quality function
deployment (QFD)
– Customer attributes
– Engineering
attributes

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Prototype Testing
• Alpha testing
• Beta testing
– Rank-order method
– Paired-comparison method
– Monadic-rating method
• Market testing

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Consumer Goods Market Testing

• Sales-Wave Research
• Simulated Test
Marketing
• Controlled Test
Marketing
• Test Markets

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Test Market Decisions
• How many test cities?
• Which cities?
• Length of test?
• What information?
• What action to take?

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Timing of Market Entry

• First entry
• Parallel entry
• Late entry

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Criteria for Choosing Rollout Markets

• Market potential
• Company’s local reputation
• Cost of filling pipeline
• Cost of communication media

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Consumer-Adoption Process

Adoption is an individual’s decision

to become a regular user
of a product.

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Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption
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Figure 20.7 Adopter Categorization

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Characteristics of an Innovation

• Relative advantage
• Compatibility
• Complexity
• Divisibility
• Communicability

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Marketing Debate

 Who should you target with new

products?

Take a position:
1. New products should always target new
adopters.
2. New products should target the broadest
market possible.

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Marketing Discussion

 Think about the last new product

you bought. How do you think
its success will be affected by
the five characteristics of an
innovation?

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