12-1: Competitors’ Products Products with patents or other proprietary
protections cannot be copied, so reverse
engineered products must be substantively
different from their source product.
12-2: Customer Input Fashion-based product lines often identify trend
leaders and watch them to gather new ideas.
Ask students: Have you ever modified a product,
e.g., apparel, a car? Why did you do it?
12-3: Concept Testing Concepts are presented to potential buyers or
users to gauge their reactions.
Marketing research techniques discussed in
Chapter 10 are used to test these concepts.
12-4: Steve Wynn This clip looks at Vegas legend Steve Wynn.
It examines the Casino business and Wynn’s
success as the “Come Back Kid” as his new
resort is showcased.
Note: Please make sure that the video file is
located in the same folder as the PowerPoint
slides.
12-5: Product Development A prototype allows consumers to interact
physically with the product.
Some prototypes, such as the concept cars
revealed at auto shows, never actually go into
production.
12-6: Market Testing Premarket test are conducted by research firms,
such as ACNielsen (BASES II). Because test
marketing reveals a new product to competitors,
it might be inappropriate to expose some new
products this way.
Ask students: Think of some products that you
think should not be subjected to test marketing.
Why not?
Answer: incremental improvements on existing
products (such as a new flavor of soda), small
niche products because they only appeal to small
markets, products that could easily be copied by
competition, etc.
This YouTube link
(http://www.youtube.com/watch?
v=pcj7QT0Abk8) is a funny commercial for
Dodge where they are getting input from
customers.
12-7: Market Testing Ask students: In the rush to get a product to the
market, some firms fail to conduct the necessary
market tests.
What happens then? Students will realize that
these new products often fail because the either
don’t offer value or cannot communicate value to
the end consumer.
12-8: Product Launch Launching a new product is part art and part
science.
Each of these products offered unique benefits.
Ask students: Will each product be successful?
Drink and Crunch is still only in limited release
so its success in not yet known.
Minute Maid Heart Wise was introduced in 2003
and has been extremely successful. Aquafresh
Floss N’Cap has been expanded to other
Aquafresh lines including whitening.
12-9: New Product Marketing Mix The right product must hit the market at the right
time and for the right price.
It matters little how good a product is if the
launch lacks sufficient resources.
The timing of the launch may be important,
depending on the product.
Group activity: Continue with the same products
the students have been working with. Design the
marketing mix required to launch it.
How will you communicate its benefits? What
types of distribution will you use? How will you
determine the price? When will you launch?
12-10: Launching a New Product “Timing is everything” may be an old saying, but
it is only too true for new product success.
12-11: Evaluation of Results Marketers cannot only celebrate success but also
must understand failure.
The question of why a product fails is just as
important as why another succeeded. An
underperforming product may require further
development.
12-12: Check Yourself 1. First, they generate ideas for the product or
service. Second, firms test their concepts by
either describing the idea of the new product
or service to potential customers or showing
them images of what the product would look
like. Third, the design process entails
determining what the product or service will
actually include and provide. Fourth, firms
test market their designs. Fifth, if everything
goes well in the test market, the product is
launched. Sixth, firms must evaluate the new
product or service to determine its success.
2. Internal research and development (R&D)
efforts, collaborate with other firms and
institutions, license technology from
research-intensive firms, brainstorm, research
competitors’ products and services, and/or
conduct consumer research.
12-13: Product Life Cycle The PLC represents an important tool managers
use to plan their marketing activities.
12-14: Stages in the Product Life Cycle At each stage of the life cycle, the marketing mix
elements change in response to the marketplace.
Group activity: List products that currently exist
in each of the stages. What marketing mix would
you design for each of these products?
12-15: The introduction stage of the PLC Discuss the difficulties associated with the
introduction stage, especially if the product is
totally new to the world.
Ask students: What challenges do firms face in
this stage?
This ad is very good to discuss how the PLC can
be for a product category, a brand, or an
individual product in the line.
The KFC brand itself is in a very mature
category. This particular product (grilled chicken)
is in the introduction stage of the PLC.
12-16: The growth stage of the PLC Discuss the concept of the “tipping point” —the
transition between introduction and growth when
the product either gains market acceptance or
must exit the market.
The majority of new products fail at this point.
Clorox wipes compete in a market that is
attracting many new offerings every year.
They must continue to fight for customer
acceptance and market share.
12-17: The maturity stage of the PLC Most U.S. products are in the maturity stage,
which means most U.S. firms must engage in
defending their market share.
In the battle for soft drinks, a very mature
market,, a 1% market share switch between Coke
and Pepsi can account for millions of dollars in
revenue
Ask students: What marketing activities should
firms engage in at this stage?
The market for laundry sheets is very mature.
However, brands like Purex continue to innovate
to prolong the maturity phase.
12-18: A behavior in the decline stage? Ask students: If your company’s product were in
its decline stage, how would you determine
whether to update the product, continue offering
it for a small segment, or exit the market
completely?
Pirating is big —many would like to see a decline
in this behavior and for related products to be in
the decline stage of the PLC.
In fact, there is huge growth in downloadable
products to help copy software, movies, and
music.
12-19: Strategies Based on the Product
Life Cycle: Some Caveats
Understanding where your product is on the PLC
is difficult. If a firm misdiagnoses the stage, it
can mean trouble for the firm.
Ask students: What happens to a product that is
misdiagnosed as being in the decline stage?
Answer: It will surely decline!
Additional Teaching Tips
This chapter focuses on the ways that a firm can create value through innovation. Students learn
about the product life cycle, the importance of product differentiation, as well as concepts unique
to new product development and launch.
The way to truly understand new product development is to have students actually work in
teams to create a new product. Students can work in teams of 5 to brainstorm and come up with
ideas of new products. Instructors need to put some boundaries on the assignment such as it
can’t be too far-fetched (such as self-driving automobiles) and the product has to have enough
differentiation (not just an added ingredient to an energy bar). If students get stumped, suggest
to students that they think of current products and then to think of a way to make it better or to
solve a problem (such as unbreakable holiday lights or lights where the bulb never burns out).
Then have students make an illustration of the product and address the phases of the new product
development. Students can then present their findings to the class.
Another way to get students involved is to have them research organizations to discover how
new products were made. 3M Post Its were made by mistake when a glue did not bond. An
employee used it to mark pages in a hymnal so he wouldn’t lose the page and it could be easily
removed without damage. Have students share their findings with the class. Online tip: This
same assignment can take the form of a posting in which students present their findings via the
discussion board in the online forum. Students can then respond to other learners by commenting
on their “new product” and making suggestions.
The key to student comprehension of new product design is to actually involve the student in
new product development to use their critical thinking skills to think about each of the phases of
new product development as well as the elements of the marketing mix to bring the product to
market. Instructors may want to assign new product development as part of a Marketing Plan
where students need to develop a new product and incorporate all elements of the marketing plan
for a cumulative course project. Of course, new product development phases would be addressed
as part of the plan.