New Product Dev444

Ashish Pillai IBS Chandigarh
New to the
World
New Product
Lines
Additions
Improvement
s
Re-
positionings
Cost
Reductions
Simple: Listen to your customers,

intermediaries and other external
associates carefully
To create successful new products,

the company must:
Understand it’s customers, markets and
competitors
Develop products that deliver superior

Overestimation of Market Size
Product Design Problems
Product Incorrectly Positioned, Priced

or Advertised
Costs of Product Development
Competitive Actions
Shortage of ideas
Fragmented markets
Social and governmental constraints

Cost of development
Capital shortages
Faster required development time

Shorter product life cycles
The key to idea generation is

interacting with customers and
consumers regularly
Attribute listing
Forced relationships
Morphological analysis
Reverse assumption analysis
New contexts
Mind mapping
Surveys
Brainstorming
Weeding out non-viable ideas and

escalating the viable ideas.
Drop Error: An other wise great new

product idea gets dropped
Go Error: An otherwise bad idea gets

selected for further action
Product idea Product concept Category

concept  Brand concept
Concept testing
Communicability and believability
Need level
Gap level
Perceived value
Purchase intention
User targets, purchase occasions, purchasing
frequency
Conjoint analysis: A statistical technique in
which respondents' utilities or valuations of
attributes are inferred from the preferences they
express for various combinations of these
Target market’s size, structure, and

behavior
Planned price, distribution, and

promotion for the first year
Long-run sales and profit goals and

marketing-mix strategy over time
The idea may be great and the concept

may be well appreciated, but at the end
the idea should be a “sound business
proposal”
Costs & profits
Breakeven analysis and risk analysis

Prototype: The first physical form or service

description of a new product, still in rough or
tentative mode
With complex products, there may be

component prototypes as well as one
finished prototype.
On services, the prototype is. simply the first

full description of how the service will work,
and comes from the systems design or
development function.
The new product and its marketing plan

are tested together in the market.
A market test simulates the eventual

marketing of the product
Sales-Wave Research
Simulated Test Marketing
Controlled Test Marketing
Test Markets
When: Timing
First Entry
Parallel Entry
Late Entry
Where: The geographic strategy of

product launch
To Whom: How are planning to take the

product and message right to the target
segment?
How: How are you planning to

Awarenes
s
Interest
Evaluatio
n
Trial
Adoption
Consumer Characteristics: The

readiness of the target consumers to try new
products
New Product Characteristics: How
innovative is the product?
Relative advantage
Compatibility
Complexity
Divisibility
Communicability
Organizational Characteristics: If the
new product is a B2B product the
Where do you place yourself with respect

to:
Windows Vista, MS Office 2007
Product line is narrow

Keep prices high (skim) or launch
“cheap” (penetration)
Distribution is selective
Target “early adopters” - experts
Promotional budget very high
Examples: Home networking, hybrid
cars, HDTV, Blu Ray
Inform, Induce,
Distribute
Add more channels - broader

distribution
Still getting new customers
Watch for “me too” new entrants
Advertise in mass media …
Compete on features
Examples: Digital cameras (5 year ago),
MP3 players
New: Features, Channels,
Flankers, Segments
Peak of sales volume

Low cost per customer
High profits
Market share comes under attack
because:
Early adopters are already moving on
Time for strengthening the distribution

network
Modify: Product,
Program
Declining sales and declining profits
Late adopters and laggards remain as
customers
Competition is strong and products
• Increase
have evolved / Maintain /
Decrease
Cut costs, milk the brand, prepare for
• Harvest / Divest
We have already covered the Product Life

Cycle…. So why do we need to study
Brand Life Cycle all over again?
Is there a difference between a
“Product” and a “Brand”?
Do consumers behave differently
towards brands and products?
Do you think that brands will need
different strategies than products?
So…. Do you think the life cycle and the
consequent changes required will be
According to the American Marketing

Association: A brand is a name, term,
design, symbol, or any other feature
that identifies one seller's good or
service as distinct from those of other
sellers
The legal term for brand is trademark.
A brand may identify one item, a family

of items, or all items of that seller
If used for the firm as a whole, the

Brand Product
A name, term, sign, Anything that can be
symbol, design, or a offered to a market for
combination of them, attention, acquisition,
intended to identify the use, or consumption and
goods or services of that might satisfy a
one seller or a group of want or need
sellers and to
differentiate them from
those of competitors
Tangible
Intangible
E.g. 1: Soda Pop
E.g. 1: Pepsi / Coke
E.g. 2: Adhesive
E.g. 2: Band Aid bandage
Think of how you became aware of

them, why you bought them, why you
prefer them, how you feel about
them ...
List them as they come to your mind
Chose one brand you are very
familiar with :
What does this Brand do for you?
What does it MEAN to you?
How do you relate to it ? …
According to you, who makes the

best cars in the world????? Ans:………
………….
Do you own one?
Have you ever owned one?
Have you ever driven one?
Do you know anybody who owns one?
How do you know ….. It is the best?
User
Culture Personality
Attributes Benefits Values

A persona that overlays and

includes the physical
products/services
The sum of fundamental values

and attributes ascribed to it by
people
The entity that the consumers

construct from the products’
meanings, symbols and images
A brand is essentially a
container for a costumer’s
complete experience with
the offer and the company
(Sergio Zyman)
Source : K. L. Keller
Apparel : 61%
Tobacco : 46%
Food Products : 37%
Transportation Equip : 20%
Primary Metals : 1%
Stone, Clay : 0%
The classical marketing literature

recognises the following four stages
of brand life cycle:
2. Unbranded Goods
3. Brands as Reference
4. Brands as Personality
5. Brand as Icon
6. Brand as Company
7. Brand as Policy
Unbranded Goods: Commodities &

packaged goods; major proportion of goods
in non-industrialized context; minor role in
Europe/USA; supplier has power over
consumer
Brands as Reference: Brand name often
name of maker; name used for identification;
any advertising support focuses on rational
attributes; name over time becomes
guarantee of quality/consistency E.g: Kissan,
USHA, Godrej
Brand as Personality: Brand name may be
"stand alone"; marketing support focuses on
Brand as Icon: Consumer now ‘owns’ brand;

brand taps into higher-order values of society;
advertising assumes close relationship; use of
symbolic brand language; often established
internationally E.g: Marlborro, Nike
Brand as Company: Brands have complex

identities; consumer assesses them all; need to
focus on corporate befits to ‘diverse’ consumers;
integrated communication strategy essential
through-the-line E. g: IKEA, ICICI
Brand as Policy: Company and brands aligned

to social and political issues; Consumers ‘vote’ on
issues through companies; consumers now ‘own’

New Product Dev444

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Ashish Pillai IBS Chandigarh

Ashish Pillai IBS Chandigarh

Simple: Listen to your customers,

To create successful new products,

Develop products that deliver superior

Overestimation of Market Size

Product Design Problems

Product Incorrectly Positioned, Priced

Costs of Product Development

Social and governmental constraints

Faster required development time

The key to idea generation is

Weeding out non-viable ideas and

Drop Error: An other wise great new

Go Error: An otherwise bad idea gets

Product idea Product concept Category

Target market’s size, structure, and

Planned price, distribution, and

Long-run sales and profit goals and

The idea may be great and the concept

Costs & profits

Breakeven analysis and risk analysis

Prototype: The first physical form or service

With complex products, there may be

On services, the prototype is. simply the first

The new product and its marketing plan

A market test simulates the eventual

Where: The geographic strategy of

To Whom: How are planning to take the

How: How are you planning to

Consumer Characteristics: The

Where do you place yourself with respect

Product line is narrow

Add more channels - broader

Peak of sales volume

Time for strengthening the distribution

Declining sales and declining profits

Late adopters and laggards remain as

Competition is strong and products

We have already covered the Product Life

According to the American Marketing

The legal term for brand is trademark.

A brand may identify one item, a family

If used for the firm as a whole, the

Think of how you became aware of

According to you, who makes the

Attributes Benefits Values

A persona that overlays and

The sum of fundamental values

The entity that the consumers

Food Products : 37%

Transportation Equip : 20%

The classical marketing literature

Unbranded Goods: Commodities &

Brand as Icon: Consumer now ‘owns’ brand;

Brand as Company: Brands have complex

Brand as Policy: Company and brands aligned

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