Marketing - Developing products

Developing Products and
Managing Product Portfolios
Chapter 12

What We Already Know About
Products
• How to define a product
• How to classify a product
– Consumer v business products
– Different types of consumer products
• The product life cycle
• There are different levels of product:
– Core benefits
– Branding, design, quality
– Support aspects: guarantees, after-sales service

What Is Managing Products About?
• Ensuring we have the right product mix to maximise profits. This involves:
– Developing new products
– Managing products through their life cycle
– Modifying products in different ways
– Deleting weak products

New Product Development
• New prod development is very risky
• 60% to 90% of new products fail
– Lack of research
– Technical difficulties

• However you must innovate or die!
• “New Product” has more than one meaning.
– New to the world product
– Innovation on existing product
– New style or image of existing product

Stages In New Product Development (1)
1. Idea Generation
– develop systematic approaches – internal or external
– brainstorming
– rewards to employees
– ask customers what they want

2. Screening Ideas assess against
– org. objectives
– ability to produce
– ability to market
– wants of buyers
– test concept with groups of buyers

Stages In New Product Development (2)
3. Business Analysis
– contribution to sales, costs & profits
– fit with existing product mix
– development expertise?
– strength of demand
– production expertise

4. Product Development
– Technical Feasibility
– at low enough cost
– concept prototyping
– benefits linked to wants in marketplace

Stages in New Product Development (3)
5. Test Marketing
• Sample launching of entire marketing mix
– use selected outlets or areas (representative)
– identify product/mix weaknesses – competitor interference a possibility

6. Commercialisation