Marketing Management, 12/e

A South Asian Perspective

20
Introducing New
Market Offerings

Kotler

Koshy

Keller

Jha

Chapter Questions

What challenges does a company face in

developing new products?
What organizational structures are used to
manage new-product development?
What are the main stages in developing new
products?
What is the best way to set up the new-product
development process?
What factors affect the rate of diffusion and
consumer adoption of newly launched products?
20-2

Categories of New Products

New-to-the-world
New product lines
Additions to product lines
Improvements to products
Repositionings
Cost reductions

20-3

Factors That Limit New Product

Development
Shortage of ideas
Fragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles

20-4

20-5

20-6

Co-developed with Ssangyong.

At the digital unveil of the Mahindra

KUV100, Mahindra introduced an all new
range of mFalcon petrol and diesel
engines, which will debut on the KUV100
that will go on sale from January 15, 2016.

20-7

Venture Team
Cross-functional group charged with
developing a specific product or business;
Intrapreneurs are relieved of other duties
and provided a budget and time frame.

20-8

Criteria for Staffing Venture Teams

Desired team leadership style
Desired level of leader expertise
Team member skills and expertise
Level of interest in concept
Potential for personal reward
Diversity of team members

20-9

Steps in New product development

process
Idea Generation
Idea screening
Concept Development and Testing
Marketing Strategy Development
Business Analysis
Product Development
Market Testing
Commercialization

20-10

Idea Generation: Creativity Techniques

Attribute listing
Forced relationships
Morphological analysis
Reverse assumption analysis
New contexts
Mind mapping

20-11

Variations on Failure

Absolute product failure

Partial product failure
Relative product failure

20-12

Concepts in Concept Development

Product idea
Product concept
Category concept
Brand concept
Concept testing

20-13

20-14

Titan Watches

Titan watches account for more than 60% share of the total Indian
market and are also sold in about 32 countries through marketing
subsidiaries based in London, Aden, Dubai and Singapore.
Titan offers various brands including Steel, Regalia, Raga, Nebula,
Sonata, Fastrack, Zoop, Orion, Purple, Obaku, Automatic, Tycoon,
Bandhan, Octane and the HTSE series.
Titan has claimed to have manufactured the world's slimmest wrist
watch branded as Titan Edge with a total thickness of 3.5 mm and a
movement of 1.15 mm.
In July 2011, Titan launched the HTSE (High Technology Self
Energizer) collection of watches which run on light. According to
Titan, these watches can be charged with as low as 200 lux of light,
which makes them chargeable with light even from a candle.

20-15

20-16

Xperia Aquatech Store

Sony is becoming more aggressive these days

introducing new devices. The Xperia Z3 is still one of its
best products in the market today aside from the
numerous cameras and apps that have proven to be
great tools when it comes to mobile photography. And on
December 3, 2014 Sony Mobile opened its first Xperia
Aquatech Store in Dubai.
The Xperia Aquatech Store is an underwater store that is
placed four meters below the surface. Its the first in the
world to be located on the seabed. The idea is for trained
divers to escort shoppers to the underwater shop. Inside
the Xperia Aquatech store, people can stand on the
seabed and breath perfectly normally. There are waterresistant tablets, phones, and more accessories in this
underwater shop.
20-17

Concept Testing
Communicability and believability
Need level
Gap level
Perceived value
Purchase intention
User targets, purchase occasions,
purchasing frequency

20-18

Marketing Strategy
Target markets size, structure, and
behavior
Planned price, distribution, and promotion
for Year 1
Long-run sales and profit goals and
marketing-mix strategy over time

20-19

Product Development

Quality function deployment

(QFD)
Customer attributes
Engineering attributes

20-20

Prototype Testing

Customer Tests
Alpha

testing
Beta testing
Rank-order method
Paired-comparison method
Monadic-rating method

Market testing

20-21

Consumer Goods Market Testing

Sales-Wave Research
Simulated Test Marketing
Controlled Test Marketing
Test Markets

20-22

Test Market Decisions

How many test cities?
Which cities?
Length of test?
What information?
What action to take?

20-23

Commercialization
When (Timing of Market Entry)
First entry
Parallel entry
Late entry
Where(Geographic Strategy)
To Whom (Target-Market Prospects)
How (Introductory Market strategy)
20-24

Consumer-Adoption Process

Adoption is an individuals decision

to become a regular user
of a product.

20-25

Stages in the Adoption Process

Awareness
Interest
Evaluation
Trial
Adoption
20-26

Adopter Categorization
Innovators
Early adopters
Early majority
Late majority
Laggards

20-27

Characteristics of an Innovation
Relative

advantage
Compatibility
Complexity
Divisibility
Communicability

20-28

Innovative Practices in MarketingResearch

Procter & Gamble executives in 2008 during one

of their 300 visits to homes in rural India
witnessed a man shave while sitting barefoot on
the floor in a tiny hut in India.
He had no electricity, no running water and no
mirror.
Alberto Carvalho, vice president, global
Gillette,said I had never seen people shaving
like that.
The visits kicked off the 18 months it took to
develop Gillette Guard, a low-cost razor
designed for India and other emerging markets.

GilletteGuard

Thousands of men helped shape the

product participating in interviews, inhome visits, shop alongs and test shaves
to fine tune the razors performance.
These experiences generated rich insights
that challenged many fundamental product
assumptions built on decades of
experience with men in developed
markets.

Customization

American donuts and coffee chain Dunkin

Donuts rolled out variants of donuts like
coconut rasgulla, petal gulab jamun and
motichoor laddoo ring.

20-35

Product Innovation

Apple-iTv

The iTv, is a tv made of steel and glass

and is extremely thin. It also brings
incredible new features such as TV Apps,
No-Glasses 3D technology, FaceTime HD,
iCloud, Air Play, Siri Control, and the multitouch screen.

Apple iTV

Apple will release a miniature device called iRing that will

be placed on a users finger and act as a navigation
pointer for iTV, enhancing the motion detection
experience and negating some of the functionality find in
a remote.
iTV will come with a mini iTV screen that will seamlessly
allow users to view content on this smaller, 9.7-inch
screen, while also opening up use cases around home
security, phone calls, video conferencing and other
areas.

Godrej-Chotukool-Frugal Innovation

Godrej-Chotukool

The portable fridge, designed to cool five

to six bottles of water and stock a few kilos
of vegetables, runs on batteries and is
being sold for just Rs. 3700, which is 35
percent less than the cheapest fridge on
the market. The product is being
distributed by villagers who are being
trained as salespersons and will earn a
commission of roughly Rs. 150 per fridge
sold.

Vivel

Since its inception, Vivel has offered differentiated value

propositions through its soaps and has introduced wellresearched products to build sustained consumer
franchise.
The new Skin Nourishing range is well poised to deliver
consumer delight at every moment of truth. Be it the design
language that depicts in its cocoon shape and soft fluid
contours, nurturing care and warmth or the manufacturing
first in India with the novel Dual Colour Co-Extrusion
Technology that enables skin nourishment through dual
benefits of two ingredients merged into one (delivered by
Vivel Mixed fruit + Cream & Vivel Refresh + Moisturize),
nourishment is embedded in every aspect of the soap for a
holistic skincare experience.