Developing new products is important for business growth and sustainability. There are six categories of new products: new-to-the-world, new product lines, additions to existing lines, improved existing products, repositioned products, and lower-priced products. The new product development process involves strategizing, idea generation, screening, business analysis, development, test marketing, and commercialization. Global issues like adapting products to local needs and finding good ideas worldwide are also considered. New products diffuse through adoption by five categories of users from innovators to laggards based on characteristics like complexity and advantage over existing options.

1. Developing and
Managing Rroducti
KEY THERM! KEEY CONCERTS
L01 new product a product
new to the world, the
Explain the importance of developing new products and describe
the six categories of new products. New products are important to sustain
market, the producer, the growth and profits and
seller, or some combination of these to replace obsolete items. New
products can be classified as new-to-
L0 2 new-product strategy
a plan that links the new-
the-world products (discontinuous
innovations), new product lines,
product development
additions to existing product lines,
process with the objectives of the
marketing department, the business improvements or revisions of existing
unit, and the corporation products, repositioned products, or
lower-priced products. To sustain or
product development a
increase profits, a firm must innovate.
marketing strategy that entails the
creation of marketable new products;
the process of converting applications Explain the steps
for new technologies into marketable in the new-product
products development
brainstorming the process of process. First, a firm forms a
getting a group to think of unlimited new-product strategy by outlining Test marketing
ways to vary a product or solve a the characteristics and roles T -
Commercialization
problem of future products. Then new-
screening the first filter in the product ideas are generated by
New product
product development process, which customers, employees, distributors, ©CENGAGE LEARNING 2011
eliminates ideas that are inconsistent competitors, vendors, and
with the organization's new- internal research and development
product strategy or are obviously personnel. Once a product idea has survived initial screening by an appointed screening
inappropriate for some other reason group, it undergoes business analysis to determine its potential profitability. If a product
concept test a test to evaluate a concept seems viable, it progresses into the development phase, in which the technical
new-product idea, usually before any and economic feasibility of the manufacturing process is evaluated. The development
prototype has been created phase also includes laboratory and use testing of a product for performance and safety.
business analysis the second Following initial testing and refinement, most products are introduced in a test market to
stage of the screening process where evaluate consumer response and marketing strategies. Finally, test market successes are
preliminary figures for demand, cost, propelled into full commercialization. The commercialization process involves starting up
sales, and profitability are calculated production, building inventories, shipping to distributors, training a sales force, announcing
development the stage in the the product to the trade, and advertising to consumers.
product development process in
which a prototype is developed and a Discuss global issues in new-product development. A marketer with
marketing strategy is outlined
global vision seeks to develop products that can easily be adapted to suit local
simultaneous product needs. The goal is not simply to develop a standard product that can be sold
development a team-oriented worldwide. Smart global marketers also look for good product ideas worldwide.
approach to new-product
development
test marketing the limited Explain the diffusion process through which new products are
introduction of a product and a adopted. The diffusion process is the spread of a new product from its
producer to ultimate adopters. Adopters in the diffusion process belong
marketing program to determine the
reactions of potential customers in a to five categories: innovators, early adopters, the early majority, the late majority, and
market situation laggards. Product characteristics that affect the rate of adoption include product
complexity, compatibility with existing social values, relative advantage over existing
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