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