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Marketing Involvement in New product development

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Marketing Involvement in New product development

  1. 1. Group Members  Sikandar Nasser (12-SE-29)  Noman Zakir (12-SE-09)  Muhammad Ahsan (12-SE-53)
  2. 2. Topic of Discussion
  3. 3. Review the above list of tasks. Which ones would you expect marketing to be involved in? (Use the scale of: very likely, somewhat likely, unlikely.) Question 1
  4. 4. Marketing Role in new Product Process Part of successfully launching a new product is finding the people who need the product, educating them on its value and helping them purchase it. Marketing is vital to getting your product in people’s hands.
  5. 5. Product Development Strategy Marketing involves very likely in Product development strategy. The Product development strategy involves the following steps.  Idea Generation  Idea Screening  Concept Development and Testing  Marketing Strategy Development  Business Analysis  Product Development  Test Marketing  Commercialization
  6. 6. Test Marketing Standard Test Market Full marketing campaign in a small number of representative cities. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Controlled Test Market A few stores that have agreed to carry new products for a fee.
  7. 7. Commercialization  Commercialization involves implementing a total marketing plan and full production  Launch the product  Produce and place advertisements and other promotions  Fill the distribution pipeline with product  Critical path analysis is most useful at this stage
  8. 8. Identifying which broad types of new products might best fit with the firm’s strategic direction. Very likely involves Marketing as company can advertise about broad types of new product and identifying the opinion of the customers about the various broad types of the new product and this create the relationship between customer. Identifying broad types of new products
  9. 9. Coming up with specific new product ideas New ideas means you are gaining information so Marketing information System (MIS) can be used. For new product ideas company have to make relationship between customers and marketing frequently involves enduring relationship between customers, sellers and other parties. In getting new ideas you involves customers in new ways or you come to know about unarticulated view of customers.
  10. 10. Helping design the product Some what likely involves the marketing in the product design. Kaul and Rao (1995) provided an integrative review of product positioning and design models in the marketing literature. In Packaging and labeling. Product packaging must be appealing in order to attract and hold the consumers’ eye and attention, and serve as an efficient and functional shipping container.
  11. 11. Determining whether there is a consumer need for the product Possibly the most important aspect of market research is to determine if there is a need for your product in your chosen market. Opportunities to extend a product lifecycle, exporting unused inventory or even producing out-of-date technology may exist in new underdeveloped markets. Key indicators to look at when determining a need for your product are:  Income levels  Size and growth of the middle class  Access to technology, and  Infrastructure
  12. 12. Conducting market research to determine whether consumers will buy The important thing is to ensure it gives you reliable information that you can use in creating your Product. Market analysis provides information about the market potential that provides the basis for accurate sales forecasting and your marketing strategy. Its basic components include:  An estimate of the size or the market for the product/service  Projected market share  Information about your market and  Analysis of the competition
  13. 13. Analyzing competitor’s current and potential products Competitor analysis is an evaluation of the strengths and weaknesses of current and potential competitors. So in new product development it necessarily be involved to know:  Which companies involved in the production of these products/services  With which competitors to compete  Knowing the planned actions of competitors
  14. 14. Helping to develop the financial evaluation Marketing involves to somewhat likely to access viability of new product. Generally Market research involves to get information and to:  Estimate your product price  Product’s market Potential  Break-even Analysis  Forecast sales volume
  15. 15. Presenting to management on whether to develop the product Unlikely marketing involves because you will present to management after market research, analysis and you will told about the consequences of the product being developed.
  16. 16. Running the actual project team For project (new product development) every member in the team should have relevant information. In running the team the marketing is some what likely involves. This can comes under the internal marketing i.e. running of internal customers (staff) for gaining competitive advantage.
  17. 17. Undertaking test marketing programs before the launch Yes Marketing involves very likely. There are three types of test marketing  Standard Test Marketing  Controlled Test Marketing  Simulated Test Marketing
  18. 18. Developing the ads, sales promotions, and various launch events This is marketing communication strategy and marketing involves very likely. Deciding on a marketing communications strategy is one of the primary roles of the marketing manager and this process involves some key decisions about who the customer is, how to contact them, and what the message should be.
  19. 19. Organizing staff training, staff bonuses, and ongoing staff communication Somewhat likely involves marketing. This comes under internal marketing. With an internal marketing strategy, employees are treated as “internal customers” who must be convinced of a company's vision and worth just as aggressively as “external customers.” The goal of internal marketing is to align every aspect of a company’s internal operations to ensure they are as capable as possible of providing value to customers. If a company can operate in a coordinated and standardized way, that company can provide a more consistent experience to their customers
  20. 20. Monitoring the success of the product’s launch Some what likely involves marketing. It is very important to monitor not just the sales of the product, but also to check how the product is performing in distribution. So there is a need for qualitative research on the product, production, distribution and marketing as well as the technical research on product quality and the quantitative research on the efficiency of the launch
  21. 21. Organizing a celebration party for all staff involve in the final success of the new product The celebration party for all staff is an event and comes under event management so marketing not involves. However for the advertisement of an event marketing can involve.
  22. 22. From your evaluation in Q1, what is the earliest stage of the new product process that you would expect to see marketing involved? Question 2
  23. 23. What is new Product? • A Product that opens an entirely new market • A product that adopts or replaces an existing product • A Product that broadens the market for an existing product • An old product introduced in a new market • An old product packaged in a different way • An old product marketed in a different way
  24. 24. New Product Development  The New Product Development process is often referred to as The Stage-Gate innovation process, developed by Dr. Robert G. Cooper as a result of comprehensive research on reasons why products succeed and why they fail.
  25. 25.  New Product development is a process which is designed to develop, test and consider the viability of products which are new to the market in order to ensure the Growth or survival of the organization. New Product Development
  26. 26. Stages in New Product Development
  27. 27. New Product Development  Firms wishing to improve the efficiency of their NPD processes will tackle specific marketing goals in each of the new product development stages. In this paper, we’ll focus on market research during the Fuzzy Front End (FFE).
  28. 28. Opportunity Identification  When an organization is in the early stages of investigating new market opportunities, a catalog of success factors should be evaluated. These factors will focus on potential market demand, customer needs, and market saturation. The NPD team should ask the following questions (5).  What is the demand in this area?  What is the perceived degree of need by potential consumers?  Will our product offering be unique relative to our competitors?  Do we have an existing distribution channel for this opportunity?
  29. 29. Idea Generation  In the concept generation stage of NPD, an organization should solidify their understanding of customer needs and begin formulating conceptual product designs. Divergent brainstorming is a common technique used to generate many, many ideas that can address the opportunities identified in Stage 1.
  30. 30. Idea Generation cont.…  Customer site visits are an effective way to gauge and test new product concepts.  One recommendation is to use a dyad team, consisting of one person from R&D and one person from marketing. The dyad team can call on prospective customers and end-users to learn about their problems and gain direct input on product needs.  dyad teams can quickly add to the growing list of ideas in the brainstorming session.
  31. 31.  An emerging trend is to use customers for co-creation in new product development. Co-creation is a collaborative activity for NPD in which consumers actively contribute to the early stages of idea generation and selection for the new product offering  In particular, ideas born of consumers through co-creation will most closely mirror the end-users’ actual product needs. Idea Generation cont.…
  32. 32.  After a large number of ideas have been captured, either through in-house brainstorming or using consumers for co-creation, innovation teams will narrow down the number of potential solutions through convergent thinking methodologies. Similar ideas are grouped together Idea Generation cont.…
  33. 33. Concept Evaluation  During concept evaluation, the NPD team wants to generate customer feedback on the potential lead solution they have identified to help address the end-users’ problems.  Depending on the industry, between one and a half dozen concepts may be tested through customer focus groups or product concept tests.  The goal of these Stage 3 activities is to eliminate poor concepts.
  34. 34. What risks could there be for firms that tend to operate their new product process with limited marketing function involvement? Question 3
  35. 35. Risk  a situation involving exposure to danger. Customer investment on new product  low-involvement decisions risk.  high-involvement decisions risk.
  36. 36. Risk with limited Marketing The process through which goods and services move from concept to the customer.
  37. 37. Conti…. 1. Financial risk If you have limited marketing, there is the financial risk if your new product doesn't generate sufficient demand at a price that is profitable.
  38. 38. Conti…. If you have limited Marketing, potential customers may choose the competition over you. 2. Missing out on Potential Customers risk
  39. 39. Conti…. If you have limited Marketing, It’s easy for another company to stake out accounts for your identities. 3. Letting Your Competitors Take Advantage risk
  40. 40. Conti…. If you have limited Marketing, you are losing a competitive edge which is basic of business. 4. Losing a Competitive Edge risk
  41. 41. Conti…. If you have limited Marketing, you will not be able to build customer relationships through this channel. 5. Becoming Obsolete risk
  42. 42. Conti…. If you have limited Marketing, you have risk ruining your reputation as a customer- friendly business. 6. Ruining Your Reputation risk
  43. 43. Conti…. If you have limited Marketing, you will grow much more slowly starting from a small. 7. Missing Out on Growth Opportunities risk