|
|
|
|
|
|
Lesson#41
|
INTRODUCING NEW PRODUCTS IN INTERNATIONAL
MARKETS
|
|
|
|
INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS
In business and engineering,
new product development (NPD) is
the term used to describe the
complete process of bringing a new product or service to market.
There are two parallel paths involved
in the NPD process : one involves the idea generation, product
design, and detail engineering ; the other
involves market research and marketing analysis. Companies
typically see new product development as
the first stage in generating and commercializing new products
within the overall strategic process of
product life cycle management used to maintain or grow their
market share.
Categories of new products:
•
Six categories
of new products in terms of their newness to the company and to the market
place:
– New-to-the-world
products
• new products that
create an entirely mew market
– New product-lines
• new products that
allow a company to enter an established market for the first time
– Additions to
existing product-lines
• new products that
supplement a company’s established product lines
(package sizes, flavors,
so on)
– Improvements or
revisions to existing products
• new products that
provide improved performance or greater perceived value and replace
existing products
– Repositioning
• existing products
that are targeted to new markets or new market segments
– Cost reductions
• new products that
provide similar performance at lower cost
Issues in new product development:
The companies need the development of original products, product
improvements, product
modifications & new brands on a consistent basis to survive
competition but most new products fail.
• New-product
failure
– nearly 80% of new
packaged consumer goods & line extensions fail
– nearly 33% of new
industrial products fail at launch
• New successful
products
– are unique
superior products
• higher
quality, new features & offer higher value
– have well-defined
concept
• by carefully
defining and assessing the target markets, product requirements & benefits
To remain successful companies must continuously develop new
products - but the odds weigh heavily
against success. The solution lies in strong new-product
planning
Successful new products are the ones;
• that have
relative advantage
• have
compatibility with other technology and distribution systems
Page
125
• allow
trialability / divisibility for buyers to try and learn
• can be judged
through observation
• just right in
terms of complexity of technology and use
• offer value for
the price
The new product development process:
Successful new product development process consists of eight
major steps;
1. Idea generation:
systematic search for new-product ideas
- internal sources
- customers
- competitors
- distributors
- suppliers
- others
2. Idea screening:
to spot good ideas and drop poor ones
- is the product truly useful to consumers & society
- availability of market
- does it mesh well with company’s objectives & strategies
- do we have the people, skills & resources to make it succeed
- does it deliver more value to customers than competing
products
- is it easy to advertise and distribute
- availability of technology
- availability of raw materials
- risk exposure, profitability, cost/benefit
- government priority
- any other factor
- CRITICAL SUCCESS FACTOR
3. Concept
development & testing
– product concept
is a detailed version of the new-product idea stated in meaningful consumer
terms
– concept
development - a new product idea
is developed into alternative product concepts
– concept testing -
calls for testing new-product
concepts with groups of target customers
4. Marketing
strategy development
– describe target
market
– planned product
positioning
– planned sales &
market share
– & profit goals
for first few years
5. Business
analysis
– a review of the
sales, costs & profit projections for a new product to find out whether these
factors satisfy the company’s objectives
– sales forecast
– estimation of
costs & profits
6. Product
development
7. Test
marketing - in realistic
market setting
8.
Commercialization (launch)
Introducing new products to the world markets:
- Waterfall Model:
- Global phased
roll out – new products tickle down in a cascade like manner.
- Sprinkler Model:
- Simultaneous
worldwide entry.
- Growing
prominence of universal segments.
- Concerns about
competitive pre-emption in the foreign markets.
The waterfall strategy of segmentation entry is preferable over
the sprinkler model when ;
1. The lifecycle of the products is relatively long
2. Non-favorable conditions govern the foreign market, such as:
• Small foreign
markets (compared to home market)
• Slow growth
• High fixed
cost of entry
3. Weak competitive climate exists in the foreign market,
because of such things as
• Very weak local
competitors
• Competitors
willing to cooperate
• No competitors
Superior quality can reduce a customer’s life-cycle ownership
costs, enhancing customer loyalty, repeat
buying, and word-of-mouth advertising ISO 9004 suggests the
roles that marketing should play:
– Take the lead in
establishing quality requirements for the company by determining customer
needs and communicating them throughout the company
– Translate
customers needs into specifications including performance and sensory
characteristics,
installation configuration, statutory and technical standards,
packaging and quality standards
– Set up an
information system to monitor customer satisfaction and dissatisfaction, and
feedback
such pertinent information to facilitate design and
manufacturing changes
– Develop early
warning systems to spot performance problems with new-product introductions;
continuously monitor product performance against quality
specifications such as reliability and
safety, and track and analyze customer complaints so that
corrective action can be taken in design
and manufacturing
|
|
|
|
|