Notes on New Product Development

The Product Life Cycle 1. Inception & Development 2. Introduction 3. Growth 4. Maturity 5. Decline The Product: 3-on-1 Denition 1. The Generic Product: the core idea of a product, the category to which the product belongs (pillows, pc, shirts) 2. The Expected Product: what consumers expect from the product, the minimum satisers 3. The Augmented Product: the part of the product that exceeds customers expectations Product Attributes:

Product Inception: So long as Life is not yet perfect, customers will continue to expect new and better products that will help them solve problems more easily and at lower cost. They are also open to new problem denitions and new products to solve these problems. New product ideas should come from a recognition of a legitimate need or the improved delivery of need satisfactions. Technology is instrumental in creating and improving on these satisfactions but it can never invent the need. A thing is not relevant just because it can be created. The customer and his input must then be integral to the product design and central to the development process. Product Development: What is a new product? It's not what the organization thinks is a new product but what ultimately matters is whether the customer sees anything new and important in the product's introduction. Look at it from the customer's perspective. 1. 2. 3. 4. Who is your prospect? What's on their mind? What's their problem or desire that you can help them with? How do they talk about it/ think about it? The actual words they use?

New products can be: Modications: 70% of instances 1. improvements in or revisions of existing products to increase a product's perceived value satisfaction 2. Repositioning a product to change it's perception to increase its importance or value 3. Cost reductions to offer the same value at a lower cost Minor innovations: 20% of instances 1. new product lines (Crocs for kids) 2. additions to existing product lines (e.g., The Bowen by Crocs)

Major innovations: 10% of instances An item that has never been sold by any other company; new-to-the-world products, which result in entirely new categories and markets (e.g., mobile phones, tablets) 7 Stages of Product Development: 1. Generating Ideas 2. Screening Ideas 3. Developing and Testing the Concept 4. Business Analysis 5. Product Development 6. Test Marketing 7. Commercialization Generating Ideas or Ideation: Brainstorming: really new ideas are often a mix of existing ideas to come up with something non obvious and exciting. Group discussions among 5 or more State a specic problem or goal at the beginning of the meeting Be as free as you want in suggesting solutions; think out of the box No idea should be criticized; practicality is not yet important at this point As ideas start to ow, one leads to another Capture all ideas Screening Ideas or Evaluation: a criteria of three 1. Does it t into the organization's overall strategy? 2. Does it build on the company's resources, skills and core competencies? 3. Does the idea have sufcient market potential to justify further consideration?

Your Marketing Plan

Will give you a chance to think like brand/product managers, applying the principles and processes you're now learning to make certain decisions that will result in a new product. You will do research, interview potential customers, consult with brand managers in companies you've chosen to work with, document your ndings and put together a plan to launch the new product.

Given Industry: food and beverage Target Segment: this starting point is up to you
Who is your prospect? What's on their mind? What's their problem or desire that you can help them with? How do they talk about it/ think about it? The actual words they use? Moms who worry about what food to give their kids that will feed them right, keep them full at less than P10 a day. Busy working moms who need to prepare a good nutritious lunch for their kids leaving for school in 15 minutes. Diabetics who need to lose weight and control their blood sugar Obese kids who need to snack healthier and increase their metabolism in between meals

Quick Check: Seven Reasons People Buy

1. 2. 3. 4. 5. 6. 7. Make money Save money Save time Save effort Increase pleasure Reduce/eliminate pain Improve health

Process tips:
1. Brainstorm on potential segments and their possible needs that can be solved or addressed by food & beverage 2. Discuss as many within your groups and narrow down to three based on how important and real you think the problem is and how relevant it is (I.e., how many are affected by the problem) 3. On each segment-need scenario, brainstorm on possible solutions 4. Narrow solutions down to three per segment 5. Name a company for whom each product idea makes sense to develop 6. Submit recommendations: about nine per group

Submission should take this format:

1. 2. 3. 4. Target segment and need Proposed new product idea Identify what category of new product under which this will fall Name the Company you might propose this product to

Proposals may be approved/disapproved on the basis of:

1. Uniqueness/duplication. No products which have already been done previous Marketing batches will be allowed. We will not allow the same product ideas under the same company. You can have the same host company or even brand so long as the product is clearly differentiated. 2. Campaign-worthiness. Is the product worth a major marketing campaign? Will the Company likely to spend behind a major marketing campaign for it?