Innovative companies

1
Innovative companies

• BW ranking of most innovative companies
• PG on innovation

2
New Product Failures
3
New Product Successes
4
NPD process
New product strategy development
Idea generation
Screening and evaluation
Business analysis
Development
Market testing
Commercialization
Commercialized products
5
Screening and Evaluation

• Internal
• External Concept testing
• The product is a lightweight electric scooter
  that can be easily folded and taken with you
  inside a building or on public transportation.
• The scooter weighs about 25 pounds. It travels at
  speeds of up to 15 miles per hour and can go
  about 12 miles on a single charge.
• The scooter can be recharged in about two hours
  from a standard electric outlet.
• The scooter is easy to ride and has simple
  controls just an accelerator button and a brake.

6
NPD

• Business analysis
• Last checkpoint before significant investment
• Development
• Prototype of product
• Testing
• Internal and with consumers

7
Test marketing

• Standard
• Full marketing campaign in a few cities
• Controlled
• Limited to a few stores
• Simulated
• Testing in a simulated marketing environment

8
Benefits of test marketing

• Yields a more reliable forecast of future sales
  than no testing.
• Can pre-test alternative marketing plans.
• May discover a product fault missed in the
  product development stage.
• Discover clues to distribution problems.

9
Problems with test marketing

• Obtaining a set of markets that is reasonably
  representative of the country as a whole.
• Best test market cities
• 1. Albany , N.Y. 6. Charlotte, N.C.
• 2. Rochester, N.Y. 7. Nashville, Tenn.
• 3. Greensboro, N.C. 8. Eugene, Ore.
• 4. Birmingham, Ala. 9. Wichita, Kan.
• 5. Syracuse, N.Y. 10. Richmond, Va.
• Worst test market cities
• 141. El Paso, Texas 146. Ocala, Fla.
• 142. Columbia, Mo. 147. McAllen, Texas
• 143. Tallahassee, Fla. 148. Honolulu
• 144. Brownsville, Texas 149. San Francisco
• 145. Provo, Utah 150. New York

Source Acxiom(R) Corporation, 2004
10
Problems with test marketing

• Problem of competitive knowledge of your test.
• Problem of translating national media plans into
  local equivalents.

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Actions from test marketing

• High trial, high repurchase rate - GO
• High trial, low repurchase rate - Drop or
  redesign product
• Low trial, high repurchase rate -
  Increase advertising and sales
  promotion
• Low trial, low repurchase rate - Drop product

12
Marketing dashboard
13
Commercialization

• Positioning and launching the new product in full
  scale production and sales