Chapter 1 Innovation and Product Planning MKT523 PDF

CHAPTER 1 Innovation and Product Planning MKT523 INNOVATION AND NEW PRODUCT PLANNING  INTRODUCTION INNOVATION AND PRODUCT PLANNING 1.1 Defining Product by the Nature of Innovation 1.2 Defining Product by the Nature...

CHAPTER 1 Innovation and Product Planning MKT523 INNOVATION AND NEW PRODUCT PLANNING  INTRODUCTION INNOVATION AND PRODUCT PLANNING 1.1 Defining Product by the Nature of Innovation 1.2 Defining Product by the Nature of Market Demand 1.3 Defining Product by the company’s internal perspective Agenda  Introduction to New Product Planning Technology advances at an ever-increasing pace, customer and market needs constantly change, competition moves with lightning speed and globalization brings new players and opportunities into the game. Consumer preferences change over time, and there is a need for a more creative innovative product to suit the consumer in this new century 2024 MKT523 3  Introduction to New Product Planning 2 ways to win a product innovation are: 1. Doing projects right - Doing the project right means employing true cross-functional teams, doing the up-front homework before the development stage building in the voice of the consumer, and getting sharp early and stable product definition have all been found to impact positively on the new product outcomes. 2. Doing the right project - emphasizes the process of innovation 2024 MKT523 3 1. Definition of New Product  1.1.1 Definition of New Product 1. The product has never before been manufactured by that company 2. The product has never before been distributed by that company 3. An old established product manufactured by a company is introduced into a geographically new area by the company 4. An old established product manufactured by a company is introduced in either new packaging, a new size, or a new form. 5. An old established product manufactured by a company is introduced into a new market niche ie positioned as one with a new function. 8  Two simplified definitions of the new product 1. A product not previously manufactured by a company and introduced by the company into a marketplace or into a new marketplace or 2. The presentation or rebranding by a company of an established product in a new form, a new package or under a new label into a market not previously explored by that company 6  1.1.2 Definition Of Customer And Consumer A CUSTOMER IS THE ONE WHO BUYS IN A MARKETPLACE. The customer is attracted by point-of-sales material, promotion, or tasting in the marketplace or shop. Customers choose according to their preferences likes or dislikes, income, and requirements. The customer is looking for reliability price delivery, quality, and price. A consumer uses the product or consumes what was purchased by the customers. 8  1.1.3 Market and Marketplace The market is conceptual it depicts a need discovered in customers and consumers that marketing personnel hope to develop into a potential to sell to customers who want to buy. Products are sold in the marketplace not in the market. The marketplace is real. The understanding of consumers and the marketplace led to the marketing characteristics of new products. 8  1.1.4 Product Planning Product planning is the process of developing and managing the lifecycle of a product from its initial concept through its development, launch, and eventual phase-out of the organizational offerings to satisfy consumer needs and wants and achieve organizational objectives. 2 processes: 1. product development 2. product management 8  1.1.4 Product Planning Product development represents the up-front process where the product or service is conceived, conceptualized, developed, produced, and tested. All the activities occur before the formal offering of the product or service to the marketplace before launch. Product management represents the back-end process, where the product or service is commercialized, sustained, and eventually disposed of. Product management includes the launch endeavor along with all activities that occur after the product is launched term levels of management refer to a line of distinction between various managerial positions in an organization. 8  1.1.5 Defining product by the nature of innovation Innovation represents a total package of features, forms, and functions, concentrating on delivering the benefit to the consumer. Innovation can be classified as 1) continuous (incremental) and 2) discontinuous (radical) innovations. 7  1.1.5 Defining product by the nature of innovation 1) Continuous innovations are slight product changes and do not require a change in customer behavior. A new flavor or brand would be a characteristic of continuous innovation. 2) Discontinuous or radical innovation revolutionizes the market infrastructure makes other technologies obsolete and, in many cases, changes the lifestyle of consumers. A technology like fusion-powered vehicles would be a characteristic of discontinued innovations. Consumers buy the benefits (values), not the features. 7  1.1.6 Defining product by the nature of Market demand 1. Consumers cannot buy just a benefit, as the benefits must be put into form or given some features through which the benefits can be delivered. This is known as the core benefit. 2. The second layer is the generic product where the features and form of the product to allow the consumer to receive the benefits. 3. The third layer is the expected product. This is the set of attribute and conditions that buyer normally expect and agree to when they purchase the product. 4. The fourth level is the augmented product, where include additional service and benefit to distinguish the company offering from its competitors. 5. The fifth level is the potential product. The potential product is all the augmentations and transformation that the product might undergo in the future, toward ultimate customer experience. 10  1.1.7 Defining Product by the company’s internal perspective Product is defined in terms of product items, product line, product family, or product mix. A product item represents a specific model, brand, or size of a product that a company offers and it is the individual product that a particular customer may buy. Closely related product items are grouped into a product line. 11 Thank You