Chapter 7 ("Developing and Managing Offerings") Flashcards
Developing New Offerings
Step 1: Idea Generation Sources of new product ideas - - -
-Customers
Customers are important generators of new product ideas, especially if the product comes with a service component.
-Employees
Employees are often used to the product category and can devise new products and uses. PRODUCT DESIGNERS and PRODUCT ENGINEERS are employees who specialize in developing new product ideas and uses.
-Suppliers
Suppliers often suggest new uses for products that they supply.
-Competitors
Firms often get new product ideas by modifying the products of their competitors.
Developing New Offerings
Step 2: Idea Screening
The company tires to determine how promising the new product idea may be.
The goal at this stage is to answer the following questions:
Does the product add value for the customer?
Will it satisfy a market need?
Can it be made within a stated time period?
How many units can we sell, and at what price?
Can firm manufacture and sell within their budget?
Will there be enough profit margin?
Will there be need for after-sales services, and can we provide it?
Does it fit firm’s image and corporate strategy?
Developing New Offerings
Step 2: Idea Screening
- Concept Testing
- Focus groups
- Depth Interviews
Concept Testing : Get early consumer feedback about a new offering before investing too much money into an offering that will not be successful.
Focus Group: Groups of 8-12 consumers gather together and react to the product concept in a group setting.
Depth Interviews: Individuals are presented with a new product concept and can react to it individually, and in great depth.
Developing New Offerings
Step 2: Idea Screening
-Strategic fit
Company must determine the STRATEGIC FIT of the new offering. Does the new offering match the image of the company?
Good Strategic Fit 例）Tideの会社が掃除用の商品を開発。
Poor Strategic Fit 例）Colgateが食製品を開発。
Developing New Offerings
Step 2: Idea Screening
Risk assessment
- investment risk
- opportunity risk
Investment risk: The possibility that the firm will not earn a sufficient return on their investment in the proposed new offering.
Opportunity risk: The risk that by choosing one product to develop, the firm might miss out an even better idea.
Developing New Offerings
Step 3: Feature Specification
Must narrow down the possible features to include in the proposed new offering, and decide on the best mix of features.
Developing New Offerings
Step 4: Development
- the actual offering is DESIGNED.
- detailed SPECIFICATIONS for the offering are created.
- PROTOTYPES are developed.
Developing New Offerings
Step 5: Testing
- Alpha testing
- Beta testing
- Alpha testing: Test it in a lab
- Beta testing: Actual customers makes sure that the offering will work under real-world conditions.
Developing New Offerings
Step 6: Launch or Commercialization
-rolling launch
Most common way to launch or commercialize a product is ROLLING LAUNCH.
- In a rolling launch, the firm introduces the new product gradually, expanding into new markets one-by-one or a few at a time.
- Rolling launch make sense if the company’s sales or service staff needs training before having to handle the new product.
Developing New Offerings
Step 7: Evaluation
-milestones
The milestone used will typically vary depending on the industry, the organization, and the type of offering being introduced. 例）映画がリリースされた時の最初の週末の売り上げ
Firms use the results of these milestones to evaluate their offerings, and may modify their product or marketing strategy based on these results.
4 different product lifecycle
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- Introduction stage
- Growth stage
- Maturity stage
- Decline stage
Product Lifecycle:
Stage 1: The Introduction Stage
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- generate awareness of the product
- persuade consumers to try the product
- develop a sufficient supply chain to deliver the product to consumers.
Due to these requirements, the introduction stage is the most expensive stage in the product lifecycle.
Product Lifecycle:
Stage 1: The Introduction Stage
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-Promotional strategies
Pull strategy:
Push strategy
-Pricing strategies
Penetration pricing: Low initial price
Skimming pricing: High initial price
Product Lifecycle:
Stage 2: the Growth Stage
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- increasing sales
- more competitors
- higher profits
- increased consumer demand for the new offering
- increased number of distribution and retailing channels
- new competitors will enter the market in response to the higher demand.
This is the most DANGEROUS stage. Company must have their distribution and production ready to go when the growth begins. じゃないと同業他社に奪われる。
Product Lifecycle
Stage 4: The Decline Stage
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- Harvesting: Stop spending money on promotion of the product, and just let the inventory run out without spending much.
- Divesting: Drop or delete the product, or sell off the brand, or reduce the price drastically to get rid of remaining inventory.
