Chapter 3 - New product and service development, and process selection. After studying this chapter you will be able to: Illustrate the importance of the development of new products and services to a firm’s competitiveness, identify the various types of new products that are developed by companies, introduce the new product design process and the concept of a product’s life cycle,. | F O U R T H E D I T I O N New Product and Service Development, and Process Selection © The McGraw-Hill Companies, Inc., 2003 chapter 3 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook Chapter Objectives Illustrate the importance of the development of new products and services to a firm’s competitiveness. Identify the various types of new products that are developed by companies. Introduce the new product design process and the concept of a product’s life cycle. Demonstrate the necessity of concurrent product and process design as a new product or service is developed. Present a framework for understanding how new services are developed and introduced into the marketplace. © The McGraw-Hill Companies, Inc., 2003 3– Managerial Issues Product life cycles becoming shorter. The need to bring products to market more quickly and efficiently. Conducting product development on a continuous basis. New products may represent a majority of sales and profits. © The McGraw-Hill Companies, Inc., 2003 3– Why the Emphasis on New Goods and Services Increased Competition Improved worldwide telecommunications Lower trade barriers (import duties and tariffs) and the creation of trade organizations (NAFTA and European Union) Faster transportation of goods Advances in Technology Products become obsolete faster. Improved manufacturing processes (CAD and CAM and industrial robots) © The McGraw-Hill Companies, Inc., 2003 3– The Benefits of Introducing New Products Faster Greater Market Share Early entry captures large initial market share. Price Premiums Ability to initially charge more for new products. Quick Reaction to Competition Rapid response to competitor’s new products. Set Industry Standards Initial product sets market/industry standards. © The McGraw-Hill Companies, Inc., 2003 3– The Impact of Speed to Market on Sales Exhibit © The McGraw-Hill Companies, Inc., 2003 3– The Impact of Speed to Market on Profit Margins Exhibit © The . | F O U R T H E D I T I O N New Product and Service Development, and Process Selection © The McGraw-Hill Companies, Inc., 2003 chapter 3 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook Chapter Objectives Illustrate the importance of the development of new products and services to a firm’s competitiveness. Identify the various types of new products that are developed by companies. Introduce the new product design process and the concept of a product’s life cycle. Demonstrate the necessity of concurrent product and process design as a new product or service is developed. Present a framework for understanding how new services are developed and introduced into the marketplace. © The McGraw-Hill Companies, Inc., 2003 3– Managerial Issues Product life cycles becoming shorter. The need to bring products to market more quickly and efficiently. Conducting product development on a continuous basis. New products may represent a majority of sales and profits. © The McGraw-Hill
