New Products

1
New Products

• Session 10
• February 5, 1998
• Prof. Karen Fox

2
Agenda

• Update on Integration Paper
• Importance of New Products
• Types of New Products--Really New?
• Process--Linear or New Product Rugby?
• Conjoint Analysis to Develop New Products
• The case of AMD
• Diffusion of Innovations and Crossing the Chasm
• Estimating Sales for New Products

3
Need for product improvements
4
Need for new product forms...
5
A need for totally new products?
6
Your next hotel room?
7
New Products? What Kind?

• In CADALYST 2/98
• Large format scanner (Epson)
• 19 monitor (KDS)
• CD-RW drive (HP)
• Multimonitor graphics card (Appian)
• Internet project management (Blue-Line/On-Line)

• New-to-the-world?
• New product line?
• Additions to existing product lines?
• Improvements and revisions of existing products?
• Repositionings?
• Cost reductions?

8
Measuring Innovativeness

• 1.VCR?
• 2.Answering machine?
• 3.CD player?
• 4.Home computer?
• 5.Camcorder?
• 6.Satellite dish?
• 7.Home fax?
• 8.Mobile telephone?
• 9.E-mail?
• 10.Internet?
• 11.World-Wide Web?

• Question When did you adopt each of the
  following innovations?
• Assign greater weight (1) for more
  innovations, and (2) for relatively earlier
  adoption of each innovation.
• Compute innovativeness scores, and assign
  individuals to adopter categories.

9
Adopter Categorization of the Basis of Relative
Time of Adoption of Innovations
T47
Fig. 11.08
34 Early majority
34 Late majority
13.5
2.5 Innovators
16 Laggards
Early adopters
Time of adoption of innovations
10
Product Characteristics Influencing Rate of
Adoption

• Relative Advantage
• Compatibility
• Complexity
• Trialability
• Observability
• Re-invention

11
Geoffrey Moores Chasm
12
(No Transcript)
13
Estimating Demand for a New Hollywood Movie
14
Utility Functions Basedon Conjoint Analysis
T45
Fig. 11.06
Package design
Brand name
Retail Price
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
1.0
1.0
1.0
Utility
Utility
Utility
A B C
K2R Glory Bissell
1.19 1.39 1.59
0
0
0
Money-Back Guarantee?
Good Housekeeping Seal?
-- -- -- -- --
-- -- -- -- --
1.0
1.0
Utility
Utility
0
No Yes
No Yes
0