New-Product Development Strategy

Acquisition:

 Refers to the buying of a whole company, a patent, or a license to produce someone else’s product

New product development:

 Refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development

Two ways to obtain new products

Idea generation:

 Is the systematic search for new-product ideas

            Sources of new-product ideas

Internal

External

Idea Generation

                                      New-Product Development Process

Internal sources:

 Refer to the company’s own formal research and development, management and staff, and “intrapreneurial” programs

External sources:

 Refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms

Idea Generation

Identify good ideas and drop poor ideas

R-W-W Screening Framework:

Is it real?

Can we win?

Is it worth doing?

Idea Screening

Product idea:

 Is an idea for a possible product that the company can see itself offering to the market

Product concept:

 Is a detailed version of the idea stated in meaningful consumer terms

Product image:

Is the way consumers perceive an actual or potential product.

Business analysis:

Involves a review of the sales, costs, and profit projections to find out whether they satisfy the company’s objectives

Marketing Strategy Development

New-Product Development Process

Product development:

 Involves the creation and testing of one or more physical versions by the R&D or engineering departments

Requires an increase in investment

Marketing Strategy Development

Test marketing: Is the stage at which the product and marketing program are introduced into more realistic marketing settings

            Provides the marketer with experience in testing the product and entire marketing program before full introduction

Team-based new-product development:

 Is a development approach where company departments work closely together in cross-functional teams, overlapping in the product-development process to save time and increase effectiveness

New-Product Development Strategies

Managing New-Product Development

Systematic new-product development: Is an innovative development approach that collects, reviews, evaluates, and manages new-product ideas

Creates an innovation-oriented culture

Yields a large number of new-product ideas