Core Concepts of Marketing by John Burnett - HTML preview

CHAPTER 7

INTRODUCING AND MANAGING THE PRODUCT

Organize

Product objectives

new product

development

market

Screen ideas

I

Go/no go

...

No go/go

Go/no go

Manufacturing

- - - - - - - - Prototype - - - - - - - -

R&D

...

No go/go

Go/no go

I

I

Commercialization

FIGURE 7.5

The new product development process

3. Salesperson: company salespeople and representatives can be a most helpful source of ideas, since they not only know the customer best, but they also know the competition and the relative strengths and weaknesses of existing products.

4. Top management: the good top executive knows the company's needs and resources, and is a keen observer of technological trends and

competitive activity.

Ex ternal sources of new product ideas are almost too numerous to mention.

A few of the more useful are:

1. Secondary sources of information: there are published lists of new products, avail-

able licenses, and ideas for new product ventures.

2. Competitors: good inferences about competitive product development can be made on the basis of indirect evidence gained from salespeople and from other external sources, including suppliers, resellers, and customers.

PRODUCT PLANNING AND STRATEGY FORMULATION

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3. Customers: frequently customers generate new product ideas, or at least relay information regarding their problems that new and improved products would help to

solve.

4. Resellers: a number of firms use "councils" or

made up of representa-

tive resellers to assist in solving various problems, including product development.

5. Foreign markets: many companies look toward foreign markets, especially West-

ern Europe, because they have been so active in product development.

There are probably as many approaches

collecting new product ideas as there are sources.

For most companies, taking a number of approaches is preferable to a single approach. Still,

coming up with viable new product

is rare (see the next Newsline box).

Step 2 : Screening Product Development Ideas

The second step in the product development process is screening. It is a critical part of the development activity. Product ideas that do not meet the organization's objectives should

be rejected.

a poor product idea is allowed to pass the screening state, it wastes effort

and money in subsequent stages until it

later abandoned. Even more serious is the pos-

sibility of screening out a wortnwhile idea.

NEWSLINE: NEW IDEAS ARE RARE

New product ideas can come from anywhere and everywhere. It's

exciting when a new product idea comes from out of the blue, proto-

types test well among consumers and purchase interest scores are off

the charts. But relying on the

and

approach

won't do in the long run. What is required for product development

are methodologies that enable us to systematically discover new prod-

uct opportunities.

One such method is the category

which points to new

product

within an existing category and sometimes to

opportunities in a new, adjacent category. The objective of the cate-

gory appraisal study is to

what makes the category "tick. "

Questions to ask include:

• What drives consumer acceptability?

• What are

strengths and weaknesses of each product in the

category'?

• What are the opportunities to outperform existing products'?

• To what extent does brand equity playa role in product accept-

ability?

• Does collected data point to unexplored regions of the category

"space" that new products can successfully fill?

An example from the confectionary industry illustrates this tech-

nique . The mission was to identify the properties of a new candy

item for consumers who buy candy in supermarkets, convenience

stores, and movie theaters. A database of in-depth sensory

of

a wide range of

products and "liking scores" of each of those

products was created. The researchers shopped 'till they dropped.

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