Chapter 12 New Product Development GOALS FOR NPD first two bullets New Products from the Firm s Perspective one perspective New Products from the Customer s Perspective second perspective o NPD Process o The Adoption Process Awareness Interest Evaluation Trial Adoption Examples of New Products Car that will fly compared to Jetsons Other example of ATV that you can use like water bike jet ski made by same company as above Ski Goggles with information in them speed temperature GPS phone Portable phone charger that uses kinetic energy Curved television Corning brand talks about future of glass Kit that you could add to a jeep Turns it into a water car 80 of new products fail o Berries and Cream yogurt by Starburst o Chocolate milk by Three Musketeers Milky Way etc o Frito Lay lemonade o Colgate frozen dinners o BIC underwear o Crystal Pepsi cola with no coloring or caffeine o Green and Purple Heinz Ketchup Business Side of NPD o 7 Steps to Develop New Products know examples Idea Generation Neurofocus o They help companies understand what customers are thinking They use medical devices to do this without having to ask them They found that people love orange mess on hands from Cheetos Crowdsourcing o When companies put out various versions of a product and then have consumers pick which they like the most Mountain Dew Lays Idea Screening Examples o When you take the ideas to a focus group and ask which one would be bought They give you feedback and help you fix it etc o Doggie Air Conditioner put it in a hot car and leave dog in for a bit Concept Testing Test Markets o Top test cities Albany Rochester Greensboro Birmingham Syracuse Charlotte Nashville Eugene Wichita Richmond Good test market cities because they represent the demographic groups of the population really well Jacksonville 15 Tallahassee terrible test market city 143 out of 150 o Product examples Pizza with hotdog crust from Pizza Hut Spaghetti from McDonalds sold in Europe already Bacon Sundae from BK Bacon Milkshake from Jack in the Box Tobacco lozenges from Camel brand Focus Group o 6 8 people paid to come to facility and try product out Business Analysis 3 questions associated with this How much will it cost to produce How much will consumers pay for it How will this affect profits Development of Physical Product Beta and Market Testing Product Launch Sun Chips created a greener option compostable bag When you throw it away it would degrade The bag was very loud Reverted back to old bag Product Innovation What is Nielsen BASES o This is a company closely associated with television ratings They measure how many people are watching Great marketing research company o Products Nielsen BASES products are aimed at NPD Product concept screening Neurofocus product they just bought Product pricing Price Advisor Product launch BASES Launch Advisor Early adjustments BASES Product Advisor Product modifications BASES Restager o Examples Bird robot TED talk o Test market New Product Adoption o Bird robot that flies and even flaps wings Customer Side of New Product Development o Innovators one of the most important First to adopt new product 2 5 are like this o Early Adopters second most important customer Choose new products carefully help spread word of mouth 13 5 are like this o Early Majority o Late Majority Adopt just prior to average person 34 Skeptics who adopt new products when they feel it is necessary 34 o Laggards Last to adopt a new product 16 New Product Adoption cycle Jobs in New Product Dev NPD o 3 Types Prod Marketing Analyst Product Specialist Product Marketing Director Chapter 5 Market Research Questions to answer o What is marketing research Process of designing gathering analyzing and reporting information that may be used to solve a marketing problem Examples Product development pricing studies customer satisfaction distribution analysis promotion effectiveness studies 60 of new vehicles are purchased by women 53 used cars etc Pricing How to make it seem like price is cheaper etc Customer Satisfaction Example has to do with waiting times o This study showed that long waits are a sign of volume so longer times o Where did it come from are higher quality etc TQM Movement total quality management Deming and Juran wrote books on how to run a better business Customer Orientation cornerstone of TQM Research to find customer reactions compare products to competitors and to find problems with products o Why is it important Examples Gives answers to important questions If decrease customer defection by 5 profits go up 25 100 5x as costly to attract new customers than keep old ones One mad customer tells 9 12 others U S firms lost half of customers every five years Telecommunications industry does bad job at retaining customers over many years Comcast Chick Fil A changed fast food model Foundation for marketing strategy decisions Statistical analysis technique that identifies customer segments Food Elites Friends of the farm badge wearers right choicers passive eaters kid fluenced Cluster Analysis o What types are there 6 types o How s it done Applied Research Designed to solve problem Bud Light example Basic Research McDonalds Designed to extend knowledge of marketing phenomena Not done for a particular company Usually available free of charge Example why people don t complain Receive 2 200 complaints a day 70 are service related Half receive follow up A third of those are dissatisfied with solution Therefore 33 of complaints are addressed Customer Complaints o Problem Definition a problem well defined is half solved Exploratory Research Qualitative Research Helps in problem solving as it allows researcher to better define the problem y getting a look at it first hand Who Involved o Research Design Two Types of Data Secondary o Collected for a purpose other than research at hand customer reviews rate my professor is an example Primary o Has been gathered specifically for the research objectives at hand Information Types Make sure to understand examples and details Exploratory used to get the real sources of the problems Have no info o Focus groups o Observations o Secondary source o Cross tabs o regression o experiments Descriptive when you have some information but not enough to move forward Generally associated with surveys to figure out who buys what they buy when where and how much Causal used if you know a lot of info and are just ready to test solutions Chapter 14 Branding and Packaging Ralph Lifshitz Ralph
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