Chap 008
Chap 008
Chap 008
PIERCY
8/e
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
8-2
Chapter Eight
Planning for
New Products
PLANNING FOR
NEW PRODUCTS
Importance of New Products
Customer Driven Process
Steps in New Product Planning
Idea Generation
Screening/Evaluating/and
Business Analysis
Product and Process
Development
Marketing Strategy and Market
Testing
Commercialization
Variation in the Generic Planning
Process
8-5
Importance of
New Products
1. Newness to market
2. Newness to company
High
New-to-world
products
10%
New product
lines
20%
Newness to company
Improvements/ Additions
revisions to to existing
existing product lines
products 26%
26%
Cost
reduction Repositionings
s 7%
11%
Low High
Newness to market
Source: New Product Management for the 1980s, Booz Allen & Hamilton Inc. 1982.
8-8
Finding Customer
Value Opportunities
Objective is to identify
needs for:
1. New products
2. Improvements to existing
products
3. Improvements in
production processes
4. Improvements in
supporting services
8-9
Matching Capabilities to
Customer Value Opportunities
Transformational Innovations
– “new-to-the-world” ideas
– Customers not always the
best guides
8-10
Customer
Expectations
Customer
Satisfaction
Gap OPPORTUNITIES
Actual (1) New Products
Product (2) Improvements
Performance (3) New and Improved
Processes
8-11
Characteristics of
Successful
Innovations
Creating an
Innovative
Culture
Selecting the
Leveraging Right
Capabilities Innovation
STRATEGIC Strategy
INITIATIVES
Developing an
Innovation Culture
Innovation Workshop for
top executives to develop
an innovation plan.
Innovation Statement
highlighting objectives and
senior management’s role
and responsibilities.
Training programs for
employees and managers.
Communicate the priority of
innovation.
Speakers to expose
employees to innovation
authorities.
Source: Thomas D. Kuczmarski et al., “The Breakthrough Mindset,” Marketing Management, March/April 2003,
43.
8-13
NEW PRODUCT
PLANNING PROCESS
Customer
Needs
Analysis
Screening
Idea Business
and
Generation Analysis
Evaluation
Marketing Product
Strategy Development
Development
Testing
Commercialization
8-15
Achieving Cross-
Functional Interaction
and Coordination
R&D
Operations Marketing
Finance
8-16
IDEA GENERATION
Idea search: targeted or open-
ended?
How extensive and
aggressive?
What specific sources are
best for generating a regular
flow of new product ideas?
How can new ideas be
obtained from customers?
Where will responsibility for
the new product ideas search
be placed?
What are potential threats
from alternative (or disruptive)
technologies?
8-18
BENETTON’S STRATEGY
TO REVIVE APPAREL IDEA
GENERATION
“We didn’t take advantage of the [industry’s] quick
transformation,” says Silvana Cassano, the ex-Fiat
manager who assumed the post of chief executive of
Benetton Group on May 5.
The transformation saw the best retailers turn
into cutting-edge users of digital technology.
Benetton’s competitors-notably Spain’s Zara and
Sweden’s H&M Hennes & Mauritz-have raised the bar
for the entire industry. These retailers can beam new
styles from the catwalk to the shop floor in less than a
month-and at bargain prices. Both deploy
sophisticated technology to track which items are
selling and which aren’t, so winners can be speedily
restocked and slow movers yanked down from the
racks. They’ve got the look down, too-cool and
minimal for the working women who love Zara, and
over-the-top trendy for H&M’s teen fans. And
Benetton’s look? Blan. “The Benetton brand is out of
fashion,” says Sagra Maceira de Rosen, retail analyst
at J.P. Morgan Chase & Co. in London.
8-19
Benetton’s Strategy
(continued)
Source: “Has Benetton Stopped Unraveling?” Business Week, June 30, 2003, 76.
8-20
Direct
Search
Alliances/
Acquisition/ Technological
Licensing Innovation
METHODS
OF
National Exploratory
GENERATING
Policy Customer
IDEAS
Studies
Creative Facilitating
Methods Lead User
Linking Analysis
Marketing
and Technology
8-21
SCREENING, EVALUATING,
AND BUSINESS ANALYSIS
IDEA GENERATION
SCREENING
(fit/feasibility)
CONCEPT EVALUATION
BUSINESS ANALYSIS
8-22
Business Analysis
Revenue Forecasts
Preliminary Marketing
Plan
Cost Estimation
Profit Projections
Other Considerations
8-23
NEW
PRODUCT
CONCEPT
PRODUCT
DEVELOPMENT MARKETING
AND USE STRATEGY
TESTING DEVELOPMENT
MARKET
TESTING
LAUNCH
8-24
Product and
Process
Development
Development of the new product
includes:
– Product design
– Packaging design
– Decisions to make or purchase
product components
Collaborative Development
8-25
Identify use
situations
8-26
MARKETING
STRATEGY AND
MARKET TESTING
Marketing Strategy Decisions
– Market Targeting
– Positioning Strategy
Market Testing Options
– Simulated Test Marketing
– Scanner – Based Test Marketing
– Conventional Test Marketing
– Testing Industrial Products
– Selecting Test Sites
– Length of the Test
– External Influences
8-27
Scanner-based Test
Marketing
Less artificial than simulated
testing
COMMERCIALIZATION
The Marketing Plan
– Complete marketing strategy
Marketing Strategy
Market
Target(s)
Marketing
Objectives Program(s)
8-30
VARIATIONS IN THE
GENERIC NEW
PRODUCT PLANNING
Technology Push
Processes
Platform Products
Process – Intensive
Products
Customized
Products