20

Introducing
New Market Offerings

Marketing Management
A South Asian Perspective, 13th ed

Categories of New Products

New-to-the-world
Additions
Improvements
Repositionings
Cost reductions

The New Product Development Process

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

20-3

Idea Generation
Common Sources of New Product Ideas
Changing customer needs & trends in consumer
markets
Competitors
R & D scientists
Employees
Trade channels
Top management
Developments in the market
Changes in demographics,geographic & psycho
graphic characteristics.

Idea Generation: Creativity Techniques

Attribute listing- listing all features and then modifying one
by one Eg if one feature is wool of blanket then may be
replacing it with artificail wool
Reverse assumption analysis-thinking just opposite. Eg
providing what you have produced than what customer
want
New contexts-put cases in new situations Eg instead of
menu card using smart phones for displaying menu
Mind mapping- start mapping various things like carmerc-germany
Lateral Mapping- combining two products or ideas EGas
stations + food- gas stations stores,Cafeteria + Internetcafetaria,Candy + toy- kinderjoy,Audio + portable- walkman

Idea Screening
Technological feasibility- whether it can be
produced
Market feasibility- whether it can be
marketed
Cost feasibility- whether it can be
affordable of dpo we have the resources
to produce

Concept development
Ideas to be developed into concepts ie elaborated
version of idea in terms of consumer
Consumers buy concepts not idea
Eg idea powder to be added to milk to increase its
nutritional value
Concepts- 1) instant breakfast drink for adult
2) snack for children as midday refreshment
Lets assume conceprt (1) is good then it would
compete with milk cornflakes,bread egg, parantha etc

Concept Testing- presenting concept in

front of customer and seek feedback on
following areas:
Communicability and believability- clarity of benefits
Need level- is product a need
Gap level- what other products fulfilling that need
Perceived value- value vs price is the price
reasonable
Purchase intention- would they buy
User targets, purchase occasions, purchasing
frequency- who uses when and how often

Marketing Strategy
Target markets size, structure, and behavior
For Eg for breakfast drink the target market if families with
children and looking for nutritious less costly breakfast
Planned price, distribution, and promotion for year one .
The co may fix price at Rs 10 per 200 gm case .
Distributed through dealers who will be offered initial
discount of 10% . Coupons with 10 % discount will also be
distributed to customer through newspaper. First year adv
budget would be 10 cr.
Long-run sales and profit goals and marketing-mix
strategy over time- Co wants 20 % market share , initially
price would be low with 20% of sales as adv budget

Business Analysis
Estimation of demand in the target market at
different price levels.
Forecasting sales based on demand estimation
& competitive analysis
Estimating the cost of serving the market
segment.
Based on the cost & anticipated sales
revenue,calculate break even price and sales
volume.

Development & Prototype

Testing
the product ideas in this stage now moves from the concept and
design boards to R &D & manufacturing for physical
development.The prototype is then tested
Alpha testing- testing product within firm
Beta testing- testing with customers
Rank-order method- ranking various options of different
competitive products
Paired-comparison method- different pairs are formed and
customer is asked to choose the preferred one in the pair
Market testing

CommercialisationTiming of Market Entry

First entry- first mover advantage
Parallel entry- at same time as competitor so that
customer pay more attention
Late entry- so that low cost of creating awareness
about new product as competitor has already
entered and educated customers
Where to launch- in single city or national market
bsed on resources
How to launch- a concrete action plan for new
product dev