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New-Product Development and Product Life-Cycle Strategies
New-Product Development and Product Life-Cycle Strategies
Chapter 10
Objectives
10- 4
New Product Development
Strategy
10- 7
New Product Development
Strategy
10- 9
Using the Web to Solicit Product Ideas
Procter and Gamble
To see how P&G solicits ideas from
customers, visit the Procter and
Gamble home page, click on the
Resources and Offers button, then Procter & Gamble
select the Share Your Thoughts listing.
10- 10
New Product Development
Strategy
10- 13
New Product Development
Strategy
10- 15
BusinessNow
Computer modeling
is being used to aid
in product design
10- 16
New Product Development
Strategy
10- 17
New Product Development
Strategy
IRI BehaviorScan
provides an in-
market laboratory
for testing new
products and
marketing programs
IRI BehaviorScan
10- 18
Simulated Test Markets (STM)
In-Depth
Advantages: Types of STMs:
Reduces risk – capital, ASSESSOR
marketing dollars, BASES
cannibalization MarkeTest
Increases efficiency Merwyn
Maintains security –
And others
competitors have less time
to plan counter strategies
Saves the company time
10- 19
Simulated Test Markets (STM)
In-Depth
Model Inputs: Model Inputs:
The market's size Price
Copy testing results The proportion of
Advertising budget for the stores carrying the test
test product and product and the
competitors. number of shelf facings
Media schedule, by month.
Consumer promotion, Expected marketing
Trade promotion by costs and margin
month. contribution.
10- 20
Simulated Test Markets (STM)
In-Depth
Do‘s & Don’ts of STMs Do‘s & Don’ts of STMs
Be a champion for your Calculate different levels
new product--but be of competitive response.
objective Don't estimate a level of
Choose the proper sample. support in a simulated
Expose people to your market that you would not
product and its advertising maintain nationally.
in a way that best simulates Be very careful in
the real world. estimating all marketing
Use proven research input factors—the more
technology to forecast you guess incorrectly, the
market behavior and sales. less accurate the forecast.
10- 21
Figure 10-2:
Sales and Profits
Over A Product’s Life
10- 22
Product Life-Cycle
Strategies
10- 24
Companies
want their
products to
enjoy a long
life cycle.
Hershey’s
actively
promotes
the fact that
it has been
“unchanged
since 1899”
10- 25
Product Life-Cycle
Strategies
Additional marketing
investments can
move a product back
into the growth stage,
as in the case of
Cracker Jack.
10- 26
Product Life-Cycle
Strategies
PLC Stages
Begins when the
company develops
Product a new-product idea
development Sales are zero
Introduction Investment costs
Growth are high
Maturity Profits are negative
Decline
10- 28
Product Life-Cycle Strategies
PLC Stages
Low sales
High cost per
Product
development customer acquired
Introduction Negative profits
Growth Innovators are
Maturity targeted
Decline Little competition
10- 29
Marketing Strategies:
Introduction Stage
10- 30
Product Life-Cycle Strategies
PLC Stages
Rapidly rising sales
Average cost per
Product customer
development Rising profits
Introduction Early adopters are
Growth targeted
Maturity Growing
Decline competition
10- 31
Marketing Strategies:
Growth Stage
10- 32
Product Life-Cycle Strategies
PLC Stages
Sales peak
Low cost per
Product customer
development High profits
Introduction Middle majority are
Growth targeted
Maturity Competition begins to
Decline decline
10- 33
Marketing Strategies:
Maturity Stage
10- 34
Product Life-Cycle Strategies
PLC Stages
Declining sales
Low cost per
Product customer
development
Declining profits
Introduction
Laggards are targeted
Growth
Declining competition
Maturity
Decline
10- 35
Marketing Strategies:
Decline Stage
10- 36