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24 Cards in this Set
- Front
- Back
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Why do Products Fail? 7 things |
1. Insignificant "Point of Difference" 2. Incomplete market and product definition 3. Little Market Attractiveness 4. Poor Marketing Mix Execution 5. Bad Timing 6. Poor Product Quality 7. No Economical access to Buyers |
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Most important factor of a new product |
-Points of difference: defeating the competitior's product |
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Organizational problems in new product failure (5 things) |
1. Not listening to "voice of customer" 2. Skipping steps in new product process (7 stps) 3. Poorly conceived product pushed into market for quick revenue 4. "Groupthink" - seeing issues but not voicing 5. Not learning from past failures |
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New Product Process is : |
the stages taken to identify a business opportunity and convert to a saleable good |
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New Product Process Stages (7) |
1. New-product strategy development 2. Idea generation 3. Screening & evaluation 4. Business Analysis 5. Development 6. Market Testing 7. Commercialization |
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Step 1. New Product Strategy Development Purpose Marketing info and Methods used |
Purpose: Identify focus, structure, approach and innovation guidelines (PROTOCOL) - what type of innovation it wants to pursue (focus) Methods: Six Sigma Lead Users |
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Six Sigma concept |
"Delight the Customer" - with quality by developing a highly disciplined process to create near perfect products (no defects) -make decisions on data not feeling |
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Lead Users concept |
Small group of potential customers that seek new products before the general market sees they need them - provide valuable info early to help shape and scope out the product B2B: Lead Users = Buying Organizations |
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Stage 2. Idea Generation Purpose Marketing Info and Method used |
Develop pool of product candidate ideas - crowdsourcing: get insights from massive number of people which leads to action of the product ** need precise question to focus on ** most difficult stage |
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Stage 3. Screening & Evaluation Purpose Marketing Info and Method used |
Internal and External evaluation of product ideas to eliminate the ones that wont work |
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Two Screening and Evaluation Approaches Internal External |
Internal : evaluate technical feasibility of proposal and if idea will meet objectives defined in Stage 1 External: CONCEPT TESTS- preliminary testing of product idea with consumers |
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Stage 4. Business Analysis |
Specify product features and marketing strategy & make financial projections for commercialization ** last checkpoint before investing in idea financially (in prototype) |
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Business Analysis Questions to be Answered 4 |
1. Do we need new machinery or can we use unused capacity in existing machinery ? 2. Will it cannabalize sales of existing products? 3. Will it increase revenue by reaching new segments? 4. Can we get a patent/copyright ? |
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Stage 5. Development |
Turning idea into prototype - idea turns into tangible product - perform lab and consumer test on prototype - improve delivery of customer service |
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Stage 6. Market Testing |
Exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy it |
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3 Kinds of Test Markets |
1. Standard Test Market 2. Controlled Test Market 3. Simulated Test Market |
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Standard Test Market - what is it - disadvantages |
Develop product and try to sell through normal distribution channels in number of test market cities - time consuming and expensive - nee to set up production, promotion and sales programs |
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Controlled Test Market - what is it |
Contracting entire test program to an outside service - service pays retailers for "shelf space" to guarantee a specific % of product's potential distribution |
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Simulated Test Markets - what is it -advantages |
Lab Testing the market , technique that replicates a full scale test market to a limited degree (shopping malls) - participants given money to decide if they would buy new product or competitors in real store environment ** SAVES TIME AND MONEY and won't alert competitors to upcoming ideas |
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Stage 7. Commercialization |
Product is POSITIONED in market and launched with full-scale production and sales - involves perceptual maps, product positioning and regional rollouts - may be halted because competitor has leapfrogged the product or the new product cannabalizes sales of other products |
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Regional Rollout |
Introduce product to certain areas sequentially -allows production levels and marketing activities to build up gradually - minimizes risk of failure |
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Commercialization problems ie Grocery Stores 2 |
Slotting Fee Failure Fee - why companies implement regional rollouts |
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Slotting Fee |
For new product to have a space on the shelf (can be $$$ millions) |
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Failure Fee |
Penalty payment from manufacturer to compensate retailer for failed sales from valuable shelf space |
