Marketing Management Sixteenth Edition PDF

Marketing Management Sixteenth Edition Chapter 18 Developing New Market Offerings Copyright © 2022, 2016, 2012 Pe...

Marketing Management Sixteenth Edition Chapter 18 Developing New Market Offerings Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Learning Objectives 18.1 Explain how companies develop new offerings. 18.2 Explain how companies generate new ideas. 18.3 Describe how companies create and validate a prototype. 18.4 Summarize the key aspects of designing a business model for a new offering. 18.5 Explain how companies implement new offering strategies. 18.6 Discuss the key steps in commercially deploying a new offering. Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved The Process of Developing New Market Offerings (1 of 2) The innovation imperative – Continuous innovation is a necessity – Incremental innovation vs. new to the world innovation Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved The Process of Developing New Market Offerings (2 of 2) Managing innovation – Assign responsibility to departments in charge of current offerings – Establish new product departments – Open innovation centers – Establish venture teams ▪ Intrapreneurs – Create forums for sharing ideas – Create cross-functional teams combining different skillsets Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved The Stage Gate Approach to Developing New Offerings (1 of 2) Stage gate framework – Idea generation – Concept development – Business-model design – Offering development – Commercial deployment Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Figure 18.1 The Stage Gate Framework for Developing New Offerings Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved The Stage Gate Approach to Developing New Offerings (2 of 2) The stage gate framework has three goals: – Develop a desirable offering that target customers will find attractive – Develop a technologically feasible offering that the company will find doable – Develop a viable offering that will create value for the company and its collaborator Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved An Illustration of the Stage Gate Approach Idea generation and validation Concept development and validation Business model design and validation Offering implementation and market testing Commercial deployment Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Generating Viable Ideas Top-down idea generation – Begins with identifying a market opportunity followed by developing an offering specifically designed to address this opportunity Bottom-up idea generation – Starts with an invention and then seeks to identify an unmet market need Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Idea Validation Assess desirability and viability Two potential errors: – Failure to reject an idea that has little or no merit – Rejection of a good idea Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Figure 18.2 Why Good Ideas Fail: Forces Fighting New Ideas Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Research Tools Observing customers Interviewing customers Interviewing employees and experts Analyzing the competition Crowdsourcing Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Concept Development Prototype – A working model of the offering that aims to flesh out the original idea and weed out potential problems before the actual offering is created Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Prototyping Alpha testing – Evaluation of the product within the firm Beta testing – Tests the product with customers Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Concept Validation Two key questions: – Can a functional prototype and, later, a fully functional version of the offering be built? – Does it fulfill the identified customer need better than the alternative options? Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Business Model Design Can the product idea be translated into a commercial one? – Viability – Feasibility – Desirability Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Designing the Business Model Three components: – Identifying the target market – Articulating the offering’s value proposition – Delineating the key attributes of the product offering Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Figure 18.3 The Key Components of a Business Model of a New Offering Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Business Model Validation Do target customers find the offering desirable, and does it create value for these customers? Is it feasible for the offering to be built as planned? Is the offering viable—that is, able to create value for the company and its collaborators? Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Offering Implementation (1 of 2) Developing the core resources – Business facilities – Supply channels – Distribution channels – Skilled employees – Access to capital Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Offering Implementation (2 of 2) Developing the market offering – Making the prototype market-ready ▪ Create the final product or service ▪ Develop the brand ▪ Set prices ▪ Determine sales promotions ▪ Effectively communicate offering benefits Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Commercial Deployment Commercialization – Informs target customers about the company’s offering and makes the offering available to these customers Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Selective Market Deployment Allows company to conduct testing in a natural environment and observe how target customers, competitors, and company collaborators react to the offering Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Market Expansion Three key activities: – Ramping up the facilities involved in the offering’s production – Promoting the offering to all target customers – Ensuring that the offering is available to the entire target market Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Figure 18.4 Adopter Categorization on the Basis of Relative Time of Adoption of Innovations Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Discussion Questions (1 of 2) Meatless products like BeyondMeat and Impossible were introduced just a few years ago. Today, they can be found everywhere from supermarkets to Starbucks to Burger King. – Why have meatless products like BeyondMeat and Impossible gained wide-spread acceptance so quickly? – How would you characterize these products? Are they the result of incremental innovation or new to the world innovation? Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Discussion Questions (2 of 2) Many beer companies now sell hard seltzer products in addition to beer. Discuss these new product offerings. – What motivated their development? – Do they represent top-down idea generation or bottom-up idea generation? – Why have these products been successful? Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2022, 2016, 2012 Pearson Education, Inc. All Rights Reserved