MKTG 3114_Lecture week 1_Nicole Hallett (1).pdf

MKTG 3114 – New Products Marketing Welcome Week 1 Welcome to MKTG 3114 – New Product Development Nicole Hallett, Unit of Study Coordinator and Lecturer: [email protected] Omer Konakci, Lecturer: [email protected] Angela Baxter, Tutor: [email protected] Lisa Asher, Tut...

MKTG 3114 – New Products Marketing Welcome Week 1 Welcome to MKTG 3114 – New Product Development Nicole Hallett, Unit of Study Coordinator and Lecturer: [email protected] Omer Konakci, Lecturer: [email protected] Angela Baxter, Tutor: [email protected] Lisa Asher, Tutor: [email protected] Yasmin Gillett, Tutor: [email protected] Eliva Andriamora, Tutor: [email protected] Enoch Li, Tutor: [email protected] Your teaching team Text book Sources of learning Most people think of new products in terms of new technologies. However, new products are often far simpler Not all new product development is planned The importance of new products The world’s most innovative companies Company Reason Nvidia Bringing chips to the AI party Novo Nordisk Unlocking potential of Ozempic Microsoft AI to the business world United Auto Workers Electrifying labor movement National Womens Soccer League Resetting value of women’s sport Gensler Remodelling abandoned offices to apartments Youtube Winning the attention of living room Taco Bell Showing world tacos are king OpenAI Building on the boom it generated KinetX Charting a path to distant asteroids – and back…… Main drivers of new product development However, the new product development process is difficult!  Best Practice in New Product Development For every 100 ideas, ¤Fewer than 70 make it though initial screening ¤Fewer than 50 pass concept evaluation and testing ¤A little more than 30 make it through development ¤About 30 make it through testing ¤About 25 are commercialised ¤15 of these 25 (about 60%) are successful. ¤Success rate is lower in consumer goods (51%) and as high as 65% in healthcare. Source: Comparative Performance Assessment Study, PDMA, 2003. The Best New Product Companies Achieve Superior Results  What do the best companies do differently? Adopt a creative approach to new product innovation to in order to fulfill existing & emerging customer needs. Understand the trade-offs consumers are prepared to make between between product attributes. Test product concepts to evaluate consumer response. Rely more on portfolio analysis for new product selection. They also…… Evaluate the commercial potential of the new product. Understand the brands positioning and the contribution of NPD to building brand equity. Support the NPD launch with solid marketing communication and distribution support. Yet, many still get it wrong…… Another Epic New Product Failure New Coke is seen as One of The Great Corporate Blunders of all time Globalisation and New Product Development Top companies deploy over 55% of their R&D spending in foreign countries. Global product teams allow companies to leverage their new product skills across their subsidiaries. Design, R&D, and manufacturing may occur in different subsidiaries around the world. Difficulties: coordinating the efforts across multiple countries to launch a successful new product. Having a global innovation culture–being aware of differences in business and cultural environments and being open to global markets –is important to success. Companies with a global innovation culture The New Products Process is All About Teams The new products team is a cross-functional team with personnel from marketing, R&D, engineering, manufacturing, production, design, and other areas. All members of the team make a contribution to the new products process and the success of the team depends on how well they interact. Try to avoid narrow functional viewpoints and stereotypes. What is a new product? New to the world products Inventions that created a whole new market New to the company products New to the company products Line extensions Additions to existing products in the same category Product Improvements Repositioned products Cost reductions Risk / return tradeoff The art of Innovation Guy Kawasaki: Tedex Berkley 2014 3 Strategic Elements of Product Development help provide focus to the NPD effort 1. The New Products Process (Chapter 1 & Chapter 2) A phased process that takes the new product idea through concept development, evaluation, development, launch, and post-launch. 2.The Product Innovation Charter (PIC) (Chapter 3) A strategy for new products that ensures that the team develops products in line with firm objectives and marketplace opportunities. 3.The Product Portfolio (Chapter 3) A way to assess which new products would be the best ones to add to the existing line, given financial and strategic objectives. The new product process (important for your group project) Opportunity identification and selection NPD should align with the firms mission statement There are several ways to identify opportunities in new markets as existing markets become less desirable When we identify an area of opportunity, each opportunity is given a PIC Bart, C. K. (2002). Product Innovation Charters: Mission Statements for New Products.R&D Management,32(1), 23-34. Concept generation From the PIC, new product concepts are developed We will investigate Creative and Analytical methods to identify new product concepts Concept evaluation Many Ideas Are Eliminated Before Concept Testing Things we might consider in evaluating the concepts against our initial reaction Ideas that pass the initial screening move into the concept testing phase Why is concept testing so important? The purpose of concept validation is to place the customer first on an ongoing basis. It allows marketers, insights managers, product managers, and more to adjust their ideas to meet consumers’ needs in the moment without relying on data they’ve already got access to in-house or their gut instincts. Validating concepts in market research allows you to choose the best ideas and focus on the things that matter the most to your audiences. Not only does it save you time and resources, it also makes your idea “sellable” and gives you a far stronger competitive advantage. Not convinced about the benefits of testing your concepts yet? You will be after this post. So, let’s dig deeper into how concept validation can be handled in practice. The brands we’re mentioning below are both established market leaders and growing challengers; we chose them to show that the effects of product concept testing can be tremendous, no matter the size of the business and previous experience in a category. Digitinsights.com (2024) Sometimes we don’t do adequate concept testing….. Failed because: Couldn’t persuade diet conscious consumers it was healthier Brand not perceived as healthy at all Existing customers didn’t want change to their products Tech + Juicy???? When it first launched, Juicero was called the “Apple of Juicers”. This large Silicon Valley project received funding from high-profile firms and aimed to change the way people consume fresh fruits and vegetables. However…… However, iterative concept validation would have helped Juicero. The problem with the existing product was that consumers didn’t need such a complicated device to make their juice. Mmmmmmmm……..Dove’s Body shaped bottles 2017 was a rocky year for Dove. To promote body positivity and inclusion of all body types, the company introduced limited-edition shampoo bottles shaped like a few different female body types. The idea behind this was very much in the style of Dove – to celebrate all shapes and sizes of beauty. But, in contrast to Dove’s previous campaigns, the execution was viewed as “tone-deaf”. The brand received backlash on social media and was criticized for “compounding the issue of being the “wrong fit”. Dove did conduct a concept testing survey, looking for people’s reactions to different bottle shapes. They found that thin human-shaped bottles appeal to audiences more than wide bottles, which could be because humans are often more inclined towards thinness because it is traditionally associated with “social prestige” Concept board example – Radiant colour protect I sort my laundry very carefully, especially when dealing with new or dark coloured items to avoid colour bleeding accidents in my day-to-day washing. I wish I could do it without all the hassle. New Radiant Colour Protect is a laundry additive that allows you to safely wash your favourite colour clothes with confidence in one single machine load -without further sorting. It contains an advanced Dye Capture Technology that disperses in the wash water and locks onto loose dyes, stopping them from becoming re-deposited on other clothing. Simply add one cap to your regular laundry detergent in every wash. Stop colour bleeding accidents in your wash. 200mL $9.99 Current Radiant range is still available Visual 1 –shows a garment damaged by red colour run Visual 2 –shows a garment undamaged by colour run Several concepts are usually tested against the one problem facing the firm to identify consumer interest and to develop forecasting measures! The concepts that are most preferred by customers in the concept test move into a full screen analysis to evaluate technical & commercial accomplishment Product development In the product development phase we focus on design and prototype development https://www.ponoko.com/blog/how-to-make/how-to-make-a-product-prototype/ To test the product amongst consumers we have varying methods available for product use testing Launch phase Strategic launch planning We also need to consider the tactics that we may use to optimise in-market success As a final stage we might decide to market test our new product prior to an immediate roll-out Any questions on content covered so far? Assessments Lets have a look…… Group Project Written Report (30%) Creativity is at the heart of new product innovation! In groups, you will identify a new product idea for development and marketing, in response to the topic YOU WILL BE ALLOCATED by your tutor in week 3. This new product will be ‘invented’ by the group. Which may be new to the world, new to the firm or a substantial product improvement. A full ‘brief’ for the assessment is posted on Canvas 3000 words, submitted to Turnitin by one team member. Groups finalised in tutorials Week 2 – it is your responsibility to work with your tutor to ensure you are in a group by the end of your week 2 tutorial. Due: 31st October, at 23:59 – late penalties will apply Group Presentation (10%) Groups will pitch their new product idea in an informative and engaging 10-minute presentation to the senior management team of their chosen firm, during week 11 and 12. Due: Presentation slides must be uploaded by one group member to Canvas in week 11, Monday 9th November at 9:00am. Groups will be allocated their presentation week, 11 or 12, by their tutor in week 8 tutorials.  Participation (10%) Participation (8%) Based on tutorial participation. However, your participation will not simply be a measure of how much you contribute to class discussion, but more importantly whether your comments are thoughtful and stimulating, provide insight into the topics of investigation, pose interesting questions to your peers and provide relevant examples to illustrate your point of view. Please note: ATTENDANCE ≠ PARTICIPATION 2.BRC Research (2%) – please ensure you are aware of due dates for this component – it is not administered by your teaching team Tutorial quizzes 20% Throughout the semester, weeks to be confirmed, you will have 4 tutorial quizzes to complete in class each worth 5%.  Final Exam (30%) Chapters: All covered. Materials: Textbook and lecture slides. Duration:1.5 Hours. Location: Formal Exam Period Details: Discussed week 12 lecture – review.  See you next week Your teaching team are here to help you – please reach out to them if you are having any issues we can assist with. Please feel free to email me if you need to [email protected] This is an active learning process – please keep up – read Chapter 1 of the textbook in preparation for week 2.