New Product Strategy

1

• New Product Strategy
• April 14
• BUSI 567
• Spring 2009

2
Strategic Alternatives
Long-term profits
Efficiency, short-run profits
Growth in sales or market share
Market development
Market penetration
New segments
Existing customers
Convert nonusers
Competitors customers
New product development
3
Criteria for Evaluating Strategic Alternative
Options

• Size/growth of the segment
• Opportunities for obtaining competitive
  advantage
• Resources available to penetrate the segment

4
Positioning Decision Steps

• Develop alternative positioning schemes.
• Screen alternatives
• (a) meaningful to customers, (b) feasible given
  the firm and product resources and customer
  perceptions, (c) competitively sensible, or (d)
  helpful for meeting the product objective
• Select the position that best satisfies these
  criteria and can be sold to the marketing
  organization
• Implement programs (e.g., advertising) consistent
  with the product position selected

5
Total Product Concept
Potential product
Generic product
Expected product
Augmented product
6
Five Areas for Differentiation

• Quality
• Status and Image
• Branding
• Convenience and Service
• Distribution

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Brand Equity
8
Brand Equity cont.
9
Some Brand Attribute and Image Dimensions
Attributes
Image Dimensions

• Color
• Style
• Comfort
• Freshness
• Construction material
• Availability
• Serviceability
• Compatibility
• Energy efficiency
• Instructions
• Automation
• Ease of Use

Reliableunreliable Oldyoung Technicalnontechnic
al Sensiblerash Interestingboring Creativenoncr
eative Sentimentalnonsentimental Impulsivedelibe
rate Trustworthyuntrustworthy Conformingrebellio
us Daringcautious Forcefulsubmissive Boldtimid
Sociable-unsociable

• Flavor/taste
• Caffeine content
• Price
• Packaging
• Size
• Calories
• Brand name
• Sweetness
• Weight
• Warranty
• Durability
• Convenience

10
Product Stages

• Idea generation
• Concept development
• Feasibility screening
• Concept testing
• Product development
• Product testing
• Market testing
• Go-no-go decision

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Assessing the Impact of Product Redesign on
Customers
Current Customers
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Getting Ideas for Really New Products

• Asking (or listening to) dissatisfied customers
• Asking nonrepresentative customers
• Using open-ended, qualitative (vs. structured
  survey) procedures
• Involving customers as co-developers
• Listening to scientists and newcomers rather than
  engineers and experts
• Scanning the literature for interesting
  possibilities