MRKTNG 3000 1nd Edition Lecture 10Outline of Last LectureI. Happiness advantagea. Path to happinessOutline of Current LectureII. New product developmentIII. New product strategy a. Technology drivers b. Market driversIV. Idea generation V. BrainstormingVI. Concept testingVII. Product developmentVIII. Market testing Current LectureImportance of new product development-Key to profitability-Survivability -Capacity to change lives What is a new product--New to the world productsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-New category entries-Additions to product lines-Product improvements-RepositioningsBreakthrough innovations that changed our lives:-Internet-Refrigeration-MRI machine-GPS-Birth control pill-Broadband fiber optics-Electricity-TV-etc. Why does a firm need a new product strategy?-To chart the group’s/team’s direction-What tech? What markets?-To set the group’s goals and objectives-Why does it exist?-To tell the group how it will play the game-Rules and constraints?-Other key info?Contents of new product strategy:-Focus: A clear technology dimension and a clear market dimension that match and have good potential-Goals/objectives: What the project(s) will accomplish-GuidelinesTechnology drivers:Materials- Corning’s glassProcesses- Deloitte and Touche’s financial information analytical capabilitiesPeople- A scientist, an engineering group, even a product management groupFacilities- Kimberly-Clarke’s paper-making lines Other- Any strong competencyMarket drivers:-Customer groups or resellers- ski shops, European importers, Ford Motor Co., etc.-End users- All skiers, beginning skiers, professional skiers-End use, activity, skiing, food manufacturing, etc.-Others- Mass customizing (focusing on everyone individually), a competitor’s customers, etc. How firms develop new products:Idea generation concept testing product development market testing product launch evaluation of resultsIdea generation:-Internal R&D, R&D consortia, licensing, brainstorming, competitors’ products, customer inputBrainstorming:-Groups work together to generate ideas-No idea can be immediately accepted or rejected -As much as 85% of new business-to-business product ideas come from customers-Lead users modify existing products according to their own specific needs Concept testing:-Concept is a brief written description of the product-Customer reactions determine whether or not it goes forward-Triggers the marketing research process Product development:1. Prototype2. Alpha testing3. Beta testing Market Testing:Premarket tests-Customers exposed-Customers surveyed-Firm makes decisionTest marketing-Mini product launch-More expensive than premarket tests-Market demand is estimated New product development at Apple1. Level of importance? Extremely important 2. What are characteristics that make it