Chapter 12: Developing new products. After reading this chapter, you should be able to: Identify the reasons firms create new products, describe the different groups of adopters articulated by the diffusion of innovation theory, describe the various stages involved in developing a new product or service, explain the product life cycle. | developing new products twelve Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1 LEARNING OBJECTIVES LO 12-1 Identify the reasons firms create new products. LO 12-2 Describe the different groups of adopters articulated by the diffusion of innovation theory. LO 12-3 Describe the various stages involved in developing a new product or service. LO 12-4 Explain the product life cycle. 2 Innovation and Value WHY DO FIRMS CREATE NEW PRODUCTS? Changing Customer Needs Market Saturation Managing Risk through Diversity Fashion Cycles Improving Business Relationships What are the reasons firms innovate? 4 Diffusion of Innovation Using the Diffusion of Innovation Theory Factors Affecting Product Diffusion Relative Advantage Compatibility Observability Complexity and Trialability What are the five groups on the diffusion of innovation curve? What factors enhance the diffusion of a good or . | developing new products twelve Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1 LEARNING OBJECTIVES LO 12-1 Identify the reasons firms create new products. LO 12-2 Describe the different groups of adopters articulated by the diffusion of innovation theory. LO 12-3 Describe the various stages involved in developing a new product or service. LO 12-4 Explain the product life cycle. 2 Innovation and Value WHY DO FIRMS CREATE NEW PRODUCTS? Changing Customer Needs Market Saturation Managing Risk through Diversity Fashion Cycles Improving Business Relationships What are the reasons firms innovate? 4 Diffusion of Innovation Using the Diffusion of Innovation Theory Factors Affecting Product Diffusion Relative Advantage Compatibility Observability Complexity and Trialability What are the five groups on the diffusion of innovation curve? What factors enhance the diffusion of a good or service? 7 How Firms Develop New Products 8 Idea Generation Concept Testing Concept is a brief written description of the product Customers reactions determine whether or not it goes forward Triggers the marketing research process Stockbyte/Getty Images 10 Product Development Prototype Alpha testing Beta testing Project Glass: One day. 11 Market Testing Digital Vision/Getty Images 12 How do firms know what market tests need to be performed to ensure a successful product? Market Testing Getty Images/PHotodisc 13 Product Launch Kellogg’s Drink’n Crunch Portable Cereals An inner cup contains the cereal and the outer cup contains the milk ©2006 Kellogg North America Company Minute Maid Premium Heart Wise Orange Juice Each 8 oz. serving of the juice contains 1 gram of plan sterols that can reduce cholesterol levels Courtesy The Coca-Cola Company Aquafresh Floss ‘N’ Cap Fluoride Toothpaste The cap of the toothpaste contains floss ©The Arbor Strategy Group, Inc 14 New Product Marketing Mix 15 .
