Introducing New Market

Offerings
Godrej Chotukool
New-Product Options
• Acquire other companies – Reckitt Benckiser, Tata Motors

• Develop new products within – new models and variants or new-to-

the-world products
Types of New Products
• Most NP are improvements on existing products or brand extensions
• Helps gain market share by increasing reach
• Protect overall category share – e.g. Colgate-Palmolive

• New-to-the-world products or Radical innovations

• Greater cost and risk on the bottom line
• Right corporate culture
• Demand estimation – probe and learn approach
Challenges in New-Product Development
• The innovation imperative
• Continuous innovation is a necessity
• Management attitude
• Reduces vulnerability of current offerings
• New-product success
• Incremental innovation vs. disruptive technologies
• Understanding evolving needs
• Domestic vs international orientation
New-Product Failure
• Targeting fragmented • High development
markets time
• High development • Poor launch timing
costs • Shorter PLCs
• Capital shortages • Lack of organizational
support
Organizational Arrangements
• Budgeting for New-Product Development
Organizing New-Product Development
• Assigning existing product managers

• New-product department / Venture teams

• Stage-gate systems
New-Product Development Process
Generating Ideas
• Interacting with employees – Toyota, Cadbury, Kodak, ITC

• Interacting with outsiders (customers, engineers, channel members,

competitors) – crowdsourcing by Cisco, Inkfruit

• Studying competitors

• Adopting creativity techniques – attribute listing, brainstorming

sessions, forced relationships
Idea Screening
• Drop poor ideas – need fulfilment, superior value, distinctive
advertisement, core capabilities, business analysis
Using Idea Screening
• The company can monitor and revise its estimate of
the product’s overall probability of success, using the
following formula:
Concept to Strategy
• Concept development – who, benefits,
when or how

• Example. Instant, nutritious breakfast

drink for adults

• Perceptual maps

• Product-positioning map

• Brand-positioning map
Concept to Strategy
• Concept testing responses

Communicability &
Perceived value
believability

Need level Purchase intention

User targets, purchase

Gap level
occasions & frequency
Utility Functions in Conjoint Analysis
• Evaluating consumer preferences for alternative product concepts
• Deriving the utility values that consumers attach to varying levels of a product’s attributes
Concept to Strategy
• Marketing strategy development following a successful concept
test
1. Target market’s size, structure, & behavior; the planned brand
positioning; the sales, market share & profit goals in first few years
2. Planned price, distribution strategy, and marketing budget for the first
year
3. Long-run sales & profit goals and marketing-mix strategy over time
Concept to Strategy
• Business analysis

• Estimating total sales – one-time

purchase, replacement purchase,
repeat purchase

• Product Life-Cycle Sales for Three

Types of Products
Concept to Strategy
• Estimating costs and profits
Development to Commercialization
• Product development

• Physical prototypes – embodies key attributes of

product concept, safe performance and
manufacturing costs

• alpha & beta testing

Methods of Consumer-Goods Market
Testing
Sales-wave research

Simulated test marketing

Controlled test marketing

Test markets
Development to Commercialization
• Commercialization: When (Timing)

First entry

Parallel entry

Late entry
Development to Commercialization
• Commercialization
• Where (Geographic Strategy)

• To Whom (Target-Market Prospects)

• How (Introductory Market Strategy)

Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption
Factors Influencing the Adoption Process
• Readiness to try new products
• Innovators are technology enthusiasts
• Early adopters are opinion leaders
• Early majority are deliberate pragmatists. They make
up the mainstream market.
• Late majority are skeptical conservatives who are risk
averse, technology shy, and price sensitive.
• Laggards are tradition-bound and resist the innovation
Factors Influencing the Adoption Process
• Characteristics of the innovation

 Relative advantage
 Compatibility
 Complexity
 Divisibility
 Communicability