New Products Management
Chapter 1: The Menu
New products technology, complex products… BUT
New products are usually simple (low carb soda, new movies, new flavors…)
Examples: 3M Post-it notes, Dual cyclone bagless vacuum cleaner
Product innovation management: or product planning, or R&D (research and development) or marketing.
In this book is New Product Management, and we are interested in the viewpoint of a marketing management, and specific roles marketing plays
Why is it an important field of study?
Big business
New products hold the answer to most organization’s biggest problems
Because of need of differentiation among competitors and price
Because competitor might have a desirable new item we don’t
1/3 out of the company sales>from products introduced in the last 5 years
The new products process is very difficult. New products fail at 40% rate
It’s a great life… (ok…)- fun and exciting
Heuristics: Little rules of thumb that firms have found work for them. Ex: “On items such as this, about 30 % of the people who hear of a new brand, try it.”
Serendipity: New product process is almost accidental
What is a New Product?
They are categorized in terms of how new they really are to the world, or to the firm.
1. New to the world: they create a whole new market. Ex: Febreze, Walkman,.. 10%
- Require consumer learning and/or incorporate a very new technology
2. New to the firm/new product lines: Take a firm into a new category. Ex: P&G’s first shampoo or coffee, Cannon’s laser printer. 20%
- Raises the issue of imitation. Light beer is new to a company even tho not new to the market.
3. Additions to existing product lines: Extensions in the firm’s current markets. Ex: Bud light is an extension of Bud, P&G’s Tide Liquid Detergent 26%
4. Improvements and revisions to existing products: Current but made better 26%
5. Repositioning: Products RE-targeted for a new use or application. Ex: Aspirin used for...