3. Idea generation Idea screening Concept develop-ment Marketing strategy Business analysis Product development Market testing Commerc- ialization Send the idea back for product development Modify the product or marketing programmer Drop Lay future plans Yes No No No No No No No No No No Yes Yes New Product Development Process

4. Budgeting for New Product Development 13984000 5721000 Total 10000000 5000000 1:2 2 National Launch 2000000 500000 1:2 4 Test Marketing 1600000 200000 1:2 8 Product Development 320000 20000 1:2 16 Concept Testing 64000 1000 1:4 64 Idea Screening Total Cost $ Cost per Product Idea $ Pass Ratio Number of Ideas Stage

8. Product Success Requirements aRating Scale: 00-0.30 Poor, 0.31-0.60 Fair, 0.61-0.80 Good, Minimum Acceptance rate: 0.61 0.69a 1.00 Total 0.05 0.50 0.10 Lack of Strong Competition 0.14 0.70 0.20 High Marketing Dollar support 0.18 0.60 0.30 High performance to Cost Ratio 0.32 0.80 0.40 Unique or Superior product Product Ratings Product Score Relative Weight Particulars

9. Probability of Success Overall Probability of Success Probability Of technical Completion = X Probability of Commercialization given technical X Probability of economic Success given

14. Product Positioning Map Bread & Toast, Butter & Eggs Tea Cold Milk Idli Dosa Upma Instant Breakfast Expensive Inexpensive Slow Quick

19. Kellogg’s Distribution Channels Kellogg’s Retailer Kellogg’s Wholesaler Retailers Kellogg’s Computer system Kroger, Target, distrib. centers Distrib. In stores

21. Positioning Map Nutrition Taste Special K Cheerios Cocoa Krisp Raisin Bran Corn Flakes Fruit Loops

25. High Low PRICE/ QUALITY /IMAGE PRODUCT LINE/MANUFACTURING MIX Strategic Group Map of Competitors in the Presweeter Cereal Industry Brand Cereals Kellogg General Mills General Food Quaker Oats Private Label

26. Bagged Value-Priced Cereal Cap’n Crunch Snack Bars Rice Cakes Oatmeal Cereal Bars Fruit Cereal Bars Cap’n Crunch Quaker Oats General Foods Honey Nut Shredded Cranberry Almond Crunch Honey Nut Cheerios Private Label Cocoa Krispies KELLOGG General Mills Lucky Charm Cheerios Honey Nut Cheerios Other Cereals

30. Product Development Quality Function Development Customer Attributes Engineering Attributes