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A systematized approach for the development of new products to manage risk. A general approach that is followed by most major consumer goods companies.
Includes the infusion of creativity and the rigor of evaluative decision points or Stage Gates
Commercialization
Test Marketing*
Commercialization
*Stage Gates
Stage Gates
Evaluative stages go/no go decisions Requires an objective assessment of the marketing initiative prior to proceeding further:
Will it fit: Manufacturing system Distribution system Consumer/Customer expectations Brand equity Will it likely sell What kind of financial resources will it require Will it provide an adequate pay-back/return on investment (ROI)
Often involves Marketing Research Testing to answer these questions. Usually involves a meeting with Senior Management
Opportunity Identification
Sources of Information:: Secondary Research - Data that has been previously gathered for a more general purpose.
Secondary market information Trend information Can come from a lot of directions: Consumers Competitors Technologists
Opportunity an easy one dish fully assembled meal that the kids will eat, and adults will enjoy too.
End Game
Who Executes New Product Development Process New Product Development Team - a collaborative, cross functional brand management group focused on specific opportunity area, reporting to senior management.
Research & Development Marketing Manager Advertising Agency
Promotions
Finance
Sales
Marketing Research
Opportunity Identification
Idea Generation
Concept Development
Concept Testing*
Test Marketing*
Commercialization
*Stage Gates
Case - Lunchables
Lunchables was originally introduced in 1989, by Oscar Mayer (Kraft Foods). As a concept it had been around for 10 years before it was introduced Outstanding success story, but not without problems along the way
OM Category
100 0
1989
Louis Rich Lunch Breaks Trial Volume Attrition
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
sword.
Big reward, but many times a big risk. Using the Stage Gate Approach helps manage risk.
The Stage Gate Approach provides a road map for new product development, integrating:
Creativity and innovation Evaluative Rigor
It is composed of several stages some developmental, and some Stage Gates Determining the consumer target is a key first step.
Targets?
14% 14%
Mobile Munchers
17%
Healthy Traditional Cooks
Food On Demand
12%
Healthful Explorers
Excerpts from ADA Conference
Healthful Explorers
Actively trying to eat healthy Focus on quality/freshness Creative & Experimental tastes Frequently too busy to cook, need easily accessible alternatives
Weary Providers
Dinner time is family time Meals are a balancing act, and stressful Prefer easy, quick, familiar foods Tend to cater to kids tastes
Mobile Munchers
Busy, active, on-the-go on-the Meals and snacking blur together Looking for portable foods
Traditional Recipients
Want good tasting, wholesome traditional food Rely on someone else to prepare
14%
Mobile
Food Is
Catered
17%
Healthy Traditional Cooks
14%
Grazing
Love
Munchers
16%
14%
Food On Demand
13%
Weary Providers
12%
Healthful Explorers
More Examples
Examples
Weary Providers
Mobile Munchers
Consumer/Customer Segmentation Identify groupings of consumers with similar attitudes out of a diverse population. Need States Identify product usage situations with similar set of consumer needs. The When Affinity Segmentation Identify groups of consumers with similar degrees of commitment to a brand.
Healthful Dinners
Budget Stretchers
Identifies the proportion of the volume coming from each group Identifies reasons for their commitment level.
Key Points
Targeting, and rationale is one of the most critical elements in New Product development. Targets should have some attitudinal element in order to be effective. Hint hint (class project).