...Chapter 9 New-Product Development and Product Life-Cycle Strategies 1) What are the two ways that a company can obtain new products? A) line extension and brand management B) internal development and brand management C) new-product development and acquisition D) service development and product extension E) market mix modification and research and development Answer: C Diff: 2 Page Ref: 258 Skill: Concept Objective: 9-1 2) Product improvements, product modifications, and original products can all be classified as ________. A) pioneer products B) new products C) product concepts D) product ideas E) test products Answer: B Diff: 1 Page Ref: 258 Skill: Concept Objective: 9-1 3) Which of the following is NOT a potential reason for a new product to fail? A) an underestimated market size B) a poorly designed product C) an incorrectly positioned product D) higher than anticipated costs of product development E) ineffective advertising Answer: A Diff: 2 Page Ref: 258 Skill: Concept Objective: 9-1 4) Which of the following is NOT a challenge presented by the product life cycle that a firm must face? A) All products eventually decline. B) Changing tastes, technologies, and competition affect the marketing of the product as it passes through lifecycle stages. C) A firm must be good at developing new products to replace aging ones. D) A firm must be good at adapting its marketing strategies. E) It is difficult to plot the stages as...
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...New-Product Development and Product Life-Cycle Strategies Based on: Philip Kotler et al., Principles of Marketing International Marketing Prof. Dr. Thomas Laukamm Objectives - Understand how companies find and develop newproduct ideas. - Learn the steps in the new-product development process. - Know the stages of the product life cycle. - Understand how marketing strategies change during the product’s life cycle. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 1 Definition - New Product Development + Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 2 New Product Development Strategy - New products can be obtained via acquisition or development. - New products suffer from high failure rates. - Several reasons account for failure. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 3 New Product Development Strategy - New Product Development Process: + Stage 1: Idea Generation • Internal idea sources: R&D • External idea sources: Customers, competitors, distributors, suppliers Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 4 New Product Development Strategy - New Product Development Process: + Stage 2: Idea Screening • Product development costs increase substantially in later...
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...PROJECT MANAGEMENT AND PRODUCT CYCLE TIME TOWARDS COMMERCIAL SUCCESS TABLE OF CONTENTS Pages Executive Summary 2 1.0 Research Overview 2.1 Introduction 3 2.2 Research Background 3 2.0 Literature Review 2.1 Review of the Literature on the relationship between cycle time and products 3-9 3.0 Analysis and Discussion 9-10 4.0 Conclusion 11 5.0 References 12 CHAPTER I 1.0 Introduction 1.1 Research Background As global competitive pressure increase and product life cycle compress, companies are trying to shorten product development cycle times (Griffin, Journal of Marketing Research, Febuary 1997). Nevertheless, faster may not be always good. Intensive research in one firm shows that rapid development times are not correlated with expected commercial success (Utterback M. H., 1995) New product development (NPD) cycle time is critical because life cycle are shrinking, and obsolescence is occurring more quickly than in the past while competition also has intensified. To keep up with competition and continue grow in the face of shorter product life cycle, it has become necessary...
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...Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s life cycle management is very important. Some companies use...
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...Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s life cycle management is very important. Some companies use...
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...variety of efficient and competitive ideas about their products and services to meet changing customers demand or target specific customer niches. Companies quickly design and create new innovations or new models to appeal to a variety of market niches. They also use new strategies and production techniques to make their product and service more competitive and satisfying to the customers. Product strategy defines the distance or length of the product line and links product decisions to investment and cash flow, market share and dynamics, product life cycle, and the organizations capabilities. GOODS AND SERVICES SELECTION Most companies concentrate or focus in selection of goods and services or product decision. They focus on creating a competitive advantage thru by differentiation in which companies’ can offer unique and high quality products, lower cost than their competitors, and rapid response to customers demand about executing rapid design and product development. Most of the companies give more attention or focus on product life cycle and strategy. Strategies change as product move through their life cycle. Product strategy involves selecting the best strategy for each product based on its position in the life cycle while product life cycle can be divided into four phases. In the introductory phase, product expenses are mostly high for Research and Development, process modification and enhancement, and supplier development. During the growth phase, effective capacity forecasting...
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...Product Management and Strategy Dr. Prashant Mishra prashant@iimcal.ac.in A Business Strategy Product-Market Investment Decision • Product-market scope • Investment intensity • Resource allocation over business units Basis of SCAs • Assets/Competencies • Synergies Functional Area Strategies • Product • Price • Distribution • Etc. Figure 1.1 The Four Ps: The Tools The Four Cs: The Ends Marketing Mix Product Customer Solution Place ConvenPromotion ience Communication Price Customer Cost The Other 4Cs: The Participants The Participants Competitors Company Consumer Channel Views on the Marketing Processes 5-C Analysis Customer Competitor Company Collaborators Context S-T-P Marketing Segmentation Targeting Positioning 4 P’s Marketing Plan Product Pricing Promotion Place The Functional View Views on the Marketing Processes Understanding Customer Value Creating Customer Value Capturing Customer Value Delivering Customer Value Sustaining Customer Value The Process View Understanding Customer Value • Value is defined as the perceived worth in monetary units of the of the set of economic functional / technical and psychological benefits received by the customer in exchange for the price paid for for a product offering, taking into consideration the available offerings and prices. - Anderson, Jain and Chintagunta(1993) Understanding Customer Value Psychological Functional Economic Plea From an Anonymous...
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...PRODUCT LIFE CYCLE MODEL The product’s life cycle usually consists of five major phases: Product development, Product introduction, Product growth, Product maturity and finally Product decline. These phases are applicable to all products or services. These phases can be split up into smaller ones depending on the product and must be considered when a new product is to be introduced into a market since they dictate the product’s sales performance 1. PRODUCT DEVELOPMENT PHASE Product development phase begins when a company finds and develops a new product idea. This involves translating various pieces of information and incorporating them into a new product. A product is usually undergoing several changes involving a lot of money and time during development, before it is exposed to target customers via test markets. Those products that survive the test market are then introduced into a real marketplace and the introduction phase of the product begins. During the product development phase, sales are zero and revenues are negative. It is the time of spending with absolute no return. 2. INTRODUCTION PHASE The introduction phase of a product includes the product launch with its requirements to getting it launch in such a way so that it will have maximum impact at the moment of sale. This period can be described as a money sinkhole compared to the maturity phase of a product. Large expenditure on promotion and advertising is common, and quick but costly service requirements...
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...stages in the product life-cycle. Discuss the strategies that marketers could utilize as the product goes through each stage of the product life cycle. First is introduction stage, this stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector. Example is 3D TVs which need to compete with the LCD’s TV in pricing and cost. The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. Example is Smartphone. Nowadays, people getting interest to buy smartphones as they can fully utilize the phone to help them in daily activities. During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications...
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... 4. Innovation and new technologies have led to longer product life cycles and lowered product obsolescence. True False 5. Technological innovation decreases the amount of output achievable from a given quantity of labor and capital. True False 6. GDP does not relate directly to the amount of goods consumers can purchase. True False 7. Externalities are costs that are borne by individuals other than those responsible for creating them. True False 8. Technological innovation results in complete eradication of negative externalities. True False 9. If a business discharges untreated chemical waste into local water bodies, it imposes a negative externality on the community members. True False 10. Firms that charge headlong into new product development usually have short development cycles. True False 11. Most innovative ideas do not become successful new products. True False 12. The majority of effort and money invested in technological innovation comes from non-industrial firms. True False 13. The innovation process is often conceived of as a funnel, because most potential new product ideas make it through the development process. True False 14. According to the concept of innovation funnel, the number of successful products launched will be greater than the number of raw ideas generated. True False 15. According to the concept of the innovation funnel, one new idea is usually responsible...
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...Product Life Chycle”: Product life-cycle (PLC) like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes, Product life cycle The concept of product life cycle is based on the following observations: * Products have a limited life. * Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller. * Profits rise and fall at different stages of the product lifecycle. * Products require different marketing, financial, manufacturing, purchasing, and the human resource strategies in each stage of their life cycle. Stage Characteristics 1. Market introduction stage 1. costs are very high 2. slow sales volumes to start 3. little or no competition 4. demand has to be created 5. customers have to be prompted to try the product 6. makes no money at this stage 2. Growth stage 1. costs reduced due to economies of scale 2. sales volume increases significantly 3. profitability begins to rise 4. public awareness increases 5. competition begins to increase with a few new players in establishing market 6. increased competition leads to price decreases 3. Maturity stage 1....
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...with supplier integration into new product development under conditions of technology uncertainty Gary L. Ragatza,*, Robert B. Handfieldb, Kenneth J. Petersenc a Department of Marketing and Supply Chain Management, Eli Broad Graduate School of Management, Michigan State University, East Lansing, MI 48824-1122, USA b North Carolina State University, Raleigh, NC, USA c University of Oregon, Eugene, OR, USA Abstract In many industries, firms are striving to integrate material suppliers earlier into the new product/process development process. This involvement may range from simple consultation with suppliers on design ideas to making suppliers fully responsible for the design of components or systems they will supply. In this paper, we develop and test a conceptual model of the effect of elements of the supplier integration process on cost, quality, and new product development time, under conditions of technology uncertainty. Technology uncertainty is operationalized here, as the degree to which the product or process technologies employed in the project are new, complex, and/or rapidly changing. The results suggest that technology uncertainty have a negative impact on cost results, but no direct effect on quality or cycle time. The results also show that certain elements of the supplier integration process are more likely to be employed under conditions of technology uncertainty, leading to significant improvements in cost, quality, and cycle time objectives. D 2001 Elsevier...
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...PRODUCT DESIGN Product Decision / Analysis / product Development Product Design 1) Product is anything that is capable of satisfying a felt need. A new product is the one which is truly innovative and is significantly different from other products. 2) Product Design specifies which materials are to be used, determines dimensions and tolerances define appearances of the product and sets standards of the performance. 3) Service Design specifies what physical items, sensual benefits and psychological benefits the customer is to receive from the service. Design has a tremendous impact on the quality of product or service. An Effective Design Process 1) Matches the product or service characteristics with customers requirement 2) Ensures customers requirements are met in simplest and least costly manner 3) Reduces the time required to design a new product or services 4) Minimize the revisions necessary to make a design workable. Product Design and Development 1) New Product Design 2) Improvement in the design of existing product due to life cycle of a product Product Decision: 1) the selection, definition and design of the products. The existing of the organization depends upon how well it provides goods and services to society. Since every product has life cycle the old product live for some time and die and hence new product are required for society this is due to changing societies, habits, tastes, liking etc. Thus operation...
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...THE SYSTEMS DEVELOPMENT LIFE CYCLE LECTURE NOTES DEVELOPING INFORMATION SYSTEMS SOLUTIONS The Systems Development Cycle: The systems approach can be applied to the solution of many types of problems. When this involves the development of information system solutions to business problems, it is called information systems development or application development. Most computer-based information systems are conceived, designed, and implemented using some form of systematic development process. In this process, end users and information specialists design information systems based on an analysis of the information requirements of an organization. Thus, a major part of this process is known as systems analysis and design. When the systems approach is applied to the development of information system solutions, a multistep process or cycle emerges. This is frequently called the information systems development cycle, also known as the systems development life cycle (SDLC). Steps involved and products produced in the traditional information systems development cycle: 1. Systems investigation - Product: Feasibility Study 2. Systems analysis - Product: Functional Requirements 3. Systems design - Product: Systems Specifications 4. Systems implementation - Product: Operational System 5. Systems maintenance - Product: Improved System 1. All the activities involved are highly related and interdependent. 2. Several developmental activities can occur at the same time...
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...New product development in modern business strategy and its importance. The survival of a business in a world faced with pressures of globalization or global competition depends on the adaptation of strategies to anticipate response and to adapt to market change both locally and internationally. It is vital that firms remain responsive to the local market while ensuring the integration and coordination of operations across world market to allow for the transfer of knowledge. To ensure growth company’s need to plan and adapt a growth strategy. The growth strategy a company adopts is highly dependent on its current success and position within the market place. Using Ansoff’s Matrix below the four growth strategies can be understood. | Existing Product | New Product | Existing Market | Market Penetration | Product Development | New Market | Market Development | Diversification | Product development growth strategy captures a framework focus on company product or service as well as product development process. This strategy examines the company’s capabilities as it relates to its strengths, weaknesses and core competencies, the competitors capabilities as it relates to their strength, weakness, core competency and strategy and the market needs and opportunities, goals as well as financial resources. The need for new product development are many inclusive of the following: 1) Companies need to adapt to the changing needs of the consumer example the need for...
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