Ethics And Functional Areas Prod

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Developing and Managing Products Unrestricted • Sustain growth • Increase revenue/profit • Replace obsolete items Why introduce new products? • New-to-the-world: discontinuous innovations • New product lines: enter an established market • Product line additions • Improvements or revisions • Repositioned products: existing products • Lower-priced products: like competition, but at a lower price Categories of new products 1. New product strategy 2. Idea generation 3. Idea screening 4. Business analysis 5. Development 6. Test marketing 7. Commercialization 8. New product New product development process • “Plan that links the new product development process with the objectives of the: • Marketing department • Business unit • Corporation” • Should specify the role the new products will play in the organization’s overall strategy New product strategy • Sources of new-product ideas • Customers • Employees • Distributors • Competitors • Research and development • Consultants • Other experts Idea generation • Screening: • Eliminates ideas that are inconsistent with organizational strategy or are inappropriate for some other reason • Concept test: • Test to evaluate a new-product idea, usually before any prototype has been created • Involves consumer reactions to product descriptions or visual representations of the proposed new product Idea screening and concept test Demand Cost Sales Profitability Business analysis stage • “The stage in the product development process in which a prototype is developed and a marketing strategy is outlined” • Involves: • Prototype • Marketing strategy • Packaging, branding, and labeling • Promotion, price, and distribution strategy • Examining manufacturing feasibility Development • Team oriented approach • Marketing, R&D, engineers, production, and suppliers • Shortens process and reduces costs Development • Test marketing: • “Limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.” • Alternatives to test marketing: • Scanner-based research • Simulated market testing • Online test marketing Test marketing • Decision to market a product involves: • Ordering production materials and equipment • Starting production • Building inventories • Shipping the product to field distribution points • Training the sales force • Announcing the product to the trade • Advertising to potential customers Commercialization Why do some products fail? • No discernible benefit compared to existing products • Poor match between product features and customer desires • Overestimation of market size • Incorrect targeting • Too high or too low prices • Inadequate distribution Reasons for product failure Diffusion of Innovation Spread of new products Complexity Compatibility Relativeadvantage Observability Trialability Product characteristics and rate of adoption Product life cycles • Hi.

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