DEVELOPING NEW PRODUCTS
Concepts About Customers
The U.S. customer tends toward inertia.
• Is it easier to keep doing what we have been doing
than to do something new and different.
• It takes less effort to keep doing the same old thing.
The experience is predictable and without risk.
Most products don't offer enough that is new and exciting.
Not enough to make the effort to change.
Even when people try something new, it just does not live up to expectations.
They often switch back become the old way is just more comfortable for them.
People don't feel anything about a new product.
But they have all sorts of emotions about the old product or service you want to woo them away from. You must relate to these feelings.
Make your product the star of your advertisement or commercial.
Make sure people remember the product — not the commercial.
A new product is defined in terms of the existing products in that category.
Nothing is seen in isolation.
Creating and marketing new products and service packages
typically goes though several stages:
1. Generating ideas and concepts for the new product.
2. Screening the ideas to find those which deserve further study.
3. Preparing a specific business plan* and analysis of the new product.
4. Developing product prototypes then testing and evaluating them with prospects.
5. Test marketing, including in-use tests followed by production adjustments.
6. Full scale production and marketing of the new product.
* The goal of new product planning is to identify the product’s features and benefits, estimate the market’s demand and product profitability, establish development program for the product, and to assign staff responsibility for its further study.
Criteria for new products:
• Is there adequate market demand?
• Does the product fit in with the company’s objectives and image in the market?
• Does the product fit the company’s present production structure and capacity?
• Does the product fit the company’s marketing structure?
• Does the product fit the firm from a financial point-of-view?
• Are all the legal considerations satisfactory?
• If it is an existing product, can it be repackaged into a new program?
• Can an existing product be modified to appear as a new product to a new group of prospective consumers?
How people make decisions about new products:
Someone is exposed to the new product or innovative idea, but at the moment knows little about it.
Interest and information:
The person asks for specific information about the product or concept.
The prospect mentally considers and tests the new product’s merits.
The prospect actually uses the new product on a limited basis.
If an innovation cannot be sampled, its chances of being adopted will decline.
Here the prospect decides whether or not to continue using the new product.
This is the decision to accept a new product. If the decision is yes, the person moves to the final stage, confirmation.
In the post adoption confirmation stage the prospect continues to seek assurance that the right decision was made.
Additional new prospects can learn of the new product through their social or business circles, as enthusiastic users spread the word.
Some reasons why new products fail:
Only about two thirds of new products do well, even when they have been fully researched, created and marketed. Here are some ranked reasons why they fail, starting with the most common failure:
• Not enough market study.
• Poor product design, quality control or durability.
• Higher costs than expected, causing sales to be low.
• Delays and poor timing, causing the new product to become technically obsolete between its concept and final marketing.
• Response of competitors with price undercutting.
• Not sufficient marketing effort and commitment of company resources.
• Inadequate sales force: Particularly poorly trained or uninspired sales people.
• Weaknesses in distribution: Poor promotion to wholesalers and retailers, or poor trade channels.
People and new products:
Some people quickly accept a new product or innovation while others are slow to make the change. Still others will reject the product.
Only about 3% of any market is adventurous people who are eager to try new things. They are the first to adopt new products. There are usually young, financially secure, and have an up-scale mentality and high social status.
These people are about 15% of the market and are more likely to be a clear part of the community’s social system. While these people are respected and are often opinion leaders in the circles they travel in, they are not too far ahead of the group. They are often involved in their communities and frequently hold elected positions in organizations. They respond well to sales people. Compared to the categories to follow, they tend to be younger, better educated, mobile and creative.
This is about 35% of the marketplace. This is a more deliberate group, which tends to be open to new products just a bit before the average person in the market. These people are above average socially and financially. They rely on the information provided to them by salespeople and advertising messages. Businesses in this category are average-sized.
These skeptics form about 30% of the market. They become involved in new products only when they are under peer pressure or when they see it as a necessity. They rely upon social peers for data. Sales people and advertising do not sway them greatly. This group is older, less educated and without the opinion leaders found in the groups above. If a business, these tend to be small and unspecialized.
The bottom group consists of about 15% of the market. These are tradition-bound people, who often focus on the ‘good-old-days’ of the past. They hang around with others with the same values. They are suspicious of new things and are slow to move from the awareness stage to final adoption. Like those of the late majority, they are older, with limited incomes and low on the social strata. Businesses are small and unspecialized.
Ways to avoid or correct product failures:
• Improve the initial screening process and research of new products.
• Make changes in the company — especially staff quality.
• Change communications methods and styles.
• Improve quality control and production
New products adoption elements:
Does the new product blend with the social or cultural values and experiences of the prospects?
Can the qualities and capabilities of the new product be demonstrated clearly and quickly to prospects?
How complicated is the new product? Its complexity will affect how quickly and completely is it adopted.
If the new product can be tested or sampled by the prospect, at least on a limited basis, its introduction into the marketplace will be easier and more complete.
The degree to which a new concept or product can be seen as better than existing products. If no major advantages are seen, its growth will be limited. Advantages include simplicity, lower cost, higher profitability, attractiveness, etc.
New product development stages
1. Identify the opportunity:
Everyone involved in the new product must be involved in this and the next step, not just the marketing department. Make sure your company objectives, goals, strengths and weaknesses are considered. Trouble areas pop up in the early phases of creating new products: Watch for them, don’t ignore them.
2. Create other choices:
Don’t limit your thinking, generate alternate approaches and ideas. With everyone involved, collect a variety of viewpoints and consider all the situations which could pop up.
3. Screen your ideas:
Use people with industry knowledge, experience and good judgment here. Consider such factors as costs, time available and potential benefits. Weed out the weaker ideas. Don’t set your ideas in concrete yet. The discussion process should build confidence among your new product team members.
4. Refine your ideas and positioning your new product:
This critical step involves finding a marketing position that allows your consumers to see that the new product will be far more satisfying and appealing than existing products in the market. Knowing the attitudes, habits, worries and interests of your prospects is essential here.
5. Testing and evaluating:Gather as much information on consumer interest while the product is being test marketed. One goal is to be able to have a projected production volume.
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If you have any questions about the material above, or on any aspect of marketing communication, we welcome an opportunity to speak with you.
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