The document discusses challenges in new product development. It covers various stages of developing new products from idea generation to commercialization. Some key points include identifying different types of new products, common reasons for new product failures, organizational structures for managing development like using gatekeepers and the stage-gate system, techniques for stimulating new ideas, testing concepts, and factors that influence consumer adoption of new products.
12. Table 12.1 Finding One Successful New Product (Starting with 64 New Ideas) Lect. Niharika Bajeja, TNRCMS, Rajkot 12- Stage Number of Ideas Pass Ratio Cost per Product Idea Total Cost 1. Idea screening 64 1:4 $ 1,000 $ 64,000 2. Concept testing 16 1:2 20,000 320,000 3. Product development 8 1:2 200,000 1,600,000 4. Test marketing 4 1:2 500,000 2,000,000 5. National launch 2 1:2 5,000,000 10,000,000 $5,721,000 $13,984,000
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18. Lect. Niharika Bajeja, TNRCMS, Rajkot 12- Some of the most notable “drop-errors” have come from the most recognizable names in American business. Xerox saw the potential of the copy machine, IBM and Eastman Kodak did not. IBM thought the personal computer market would be miniscule. Can you think of any “drop-errors” that the company didn’t survive? Discussion Question
19. Table 12.2 Product-Idea Rating Device Lect. Niharika Bajeja, TNRCMS, Rajkot 12- Relative Weight Product Score Product Rating Product Success Requirements (a) (b) (c = a x b) Unique or superior product .40 .8 .32 High performance to cost ratio .30 .6 .18 High marketing dollar support .20 .7 .14 Lack of strong competition .10 .5 .05 Total 1.00 .69 Rating scale: .00-.30 poor; .31-.60 fair; .61-.80 good. Minimum acceptance rate: .61
22. Lect. Niharika Bajeja, TNRCMS, Rajkot 12- Sometimes a new product is developed, like the felt-tip pen and the “walkman” style personal music device. Consumers weren’t clamoring for either of these products before they came to market. Most people hadn’t even conceived of such an item. Careful planning developed markets for these new lines. Can you think of more recent examples? Discussion Question
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27. Table 12.3 Projected Five-Year-Cash-Flow Statement (in thousands of dollars) Lect. Niharika Bajeja, TNRCMS, Rajkot 12- See text for complete table Year 0 Year 1 Year 2 Year 3 1. Sales revenue $ 0 $11,889 $15,381 $19,654 2. Cost of goods sold 0 3,981 5,150 6,581 3. Gross margin 0 7,908 10,231 13,073 4. Development costs -3,500 0 0 0 5. Marketing costs 0 8,000 6,460 8,255 6. Allocated overhead 0 1,189 1,538 1,965
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37. Figure 12.7: Adopter Categorization on the Basis of Relative Time of Adoption of Innovation Lect. Niharika Bajeja, TNRCMS, Rajkot 12-
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