978-1259709074 Chapter 12 Part 2

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Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

Quiz Yourself

1 In the United States, most consumer packaged goods found in grocery and discount stores are

already in the _____ stage, which is characterized by the adoption of the product by the late majority

and intense competition for market share among firms.

a. introduction

b. growth

c. maturity

d. first

e. decline

2 Although they enjoy novelty and are considered to be opinion leaders, _____ are not the first to

purchase new product innovations.

a. laggards

b. innovators

c. early adopters

d. the late majority

e. the early majority

Chapter Case Study: Is the Glass Half Full? The Launch, Death Struggles, and

Potential Reemergence of Google Glass

1 What kind of testing did Google perform for Google Glass? What other methods might it have

used?

From the text: “The initial rollout of Google Glass was limited, purposefully, by a couple of factors. First,

Google set the price very high, at around $1,500. That meant that only the most dedicated tech geeks,

and those with plenty of disposable income, would be the ones first sporting the headband-like devices.

2 At what stage of its product life cycle is Google Glass today?

3 What can later entrants into the wearable technology market learn from Google’s new product

introduction?

Some of Google’s early insights:

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

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 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 should have enough differentiation (not just an added

ingredient to an energy bar). If students get stumped, suggest that they think of a current product and

then 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 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 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.

Connect Activities

Activity

Type

Learning Objectives 12–

Stages of the Product Life Cycle

Click & Drag

The Product Development Process

Click & Drag

Sara Lee: Developing a New Product

Video Case

You Be the Judge: Click Here, Be Sued

Video Case

Diffusion of Innovation

Click & Drag

New Product Development at Red Mango

Video Case

The Launch, Death, and Potential Reemergence of

Google Glass

Case Analysis

ISeeIt Video Case: New Product Development

Video Case

Stages of the Product Life Cycle

▪ Activity Type: Click & Drag

▪ Learning Objectives: 12–04

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

▪ Difficulty: Medium

▪ Activity Summary: The student matches market characteristics and consumer profiles to the stages

of the product life cycle.

Activity

▪ Introduction: During each stage of a product’s life cycle, the types and levels of sales, profits, and

competition rise, peak, and eventually decline. Categorize the following statements by the market

attributes and consumer types that characterize each product life cycle stage.

▪ Concept Review: The product life cycle defines the stages that new products move through as they

enter, are established in, and ultimately leave the marketplace. In their life cycles, products pass

through four stages: introduction, growth, maturity, and decline. The product life cycle offers a useful

tool for managers to analyze the types of strategies that may be required over the life of their

products. Even the strategic emphasis of a firm and its marketing mix (4Ps) strategies can be

adapted from insights about the characteristics of each stage of the cycle.

The student is presented with information on both market characteristics and consumer profiles for a set

of situations, and is asked to match each of these scenarios to one of the four product life cycle stages.

Follow-Up Activity

Internet research challenge: Ask students to investigate the sales growth pattern in the tablet market,

using the most current data they can find, and identify the PLC stage in which the tablet market currently

sits.

The Product Development Process

▪ Activity Type: Click & Drag

▪ Learning Objectives: 12-03

▪ Difficulty: Medium

▪ Activity Summary: Students apply the product development process to the description of the

development of a hypothetical technology product.

Activity

▪ Introduction: In this example, a hypothetical computer accessories company called ElectroCompt

creates a product to enhance users’ experience with the Apple iPod. The SuperChargeIn is a slim

protective sleeve with a battery-operated charger built in so iPod users never run out of charge when

they are on the go. Read about how the hypothetical product SuperChargeIn was conceived and

delivered to market and then organize the product development process as instructed.

▪ Concept Review: New goods and services keep current customers coming back for more and draw

new customers into the market. Broad product assortments also help to diversify the firm’s portfolio,

thus lowering its overall risk and enhancing its value. Although they carry significant risk, new–to-the-

world products have tremendous potential because they offer something that has never before been

available.

Students are asked to match a set of product development activities to the stages of the product

development process.

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

Sara Lee: Developing a New Product

▪ Activity Type: Video Case

▪ Learning Objectives: 12-01, 12-03, 12-04

▪ Difficulty: Medium

▪ Activity Summary: This case discusses the product development process for a new type of bread

with some whole grain but the taste and appearance of white bread. After the video ends, students

are asked questions about the video and related course concepts.

Activity

▪ Introduction: The following video features the Sara Lee brand, which is known around the world.

One of the strategies Sara Lee uses to keep its brand fresh and diversified is innovative product

development.

▪ Concept Review: New goods and services keep current customers coming back for more and draw

new customers into the market. Multiple products also help to diversify the firm’s portfolio. To

generate ideas for new products, a firm can use its own 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.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activities

For an interesting follow-up to this case, assign this article to be read outside of class, or discuss it in

class:

http://www.cspinet.org/new/200807212.html

Sara Lee was threatened with a lawsuit following the introduction of the bread discussed in the video

case; consumer protection groups felt that the name and packaging were misleading, suggesting that the

bread contained more whole grains than it actually did.

You Be the Judge: Click Here, Be Sued

▪ Activity Type: Video Case

▪ Learning Objectives: 12-01, 12-02, 12-04

▪ Difficulty: Medium

▪ Activity Summary: An excerpt from a fictionalized trial dealing with an allegation of misappropriation

of an innovative idea. After the video ends, students are asked questions about the video and related

course concepts.

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: In this You Be the Judge business law case, Ms. Garner argues that she developed an

innovative process for one-click shoe shopping for her Dazzletoes website, and that Flights of Fancy

for years in his brick and mortar store and is entitled to continue its use online.

▪ Concept Review: Innovation is the process by which ideas are transformed into new goods and

services that will help firms grow. Without innovation, firms would have only two choices: to continue

to market current products to current customers, or to take the same products to other markets with

similar customers. Although innovation strategies may not work in the short run, long-term

considerations compel firms to introduce new goods and services.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

Class discussion: This fictional trial video is incomplete in that an infringement lawsuit would require lots

of information and testimony not shown here. But regardless of that, ask the students, if they were the

judges, how they would decide. Of the testimony shown in the video, which factors are important to the

decision? What else would they want to know? This is also a place where, if you want, you can briefly

expand on what the text says about patent protection.

Diffusion of Innovation

▪ Activity Type: Click & Drag

▪ Learning Objectives: 12–02

▪ Difficulty: Medium

▪ Activity Summary: The student identifies products being adopted by each of the adopter groups

discussed in diffusion of innovation theory.

Activity

▪ Introduction: There are certain products that can be associated with users in each stage of the

diffusion of innovation curve. Match each product with the consumer type for each stage of diffusion.

▪ Concept Review: The process by which the use of an innovation—whether a product, a service, or a

process—spreads throughout a market group, over time and across various categories of adopters, is

referred to as diffusion of innovation. The theory surrounding diffusion of innovation helps marketers

understand the rate at which consumers are likely to adopt a new product or service. It also gives

them a means to identify potential markets for their new products or services and predict their

potential sales, even before they introduce the innovations.

Students are asked to identify the adopter group most likely to adopt particular products described in the

activity.

Follow-Up Activity

In small groups, ask students to assess a product that has diffused very quickly, and one that is diffusing

slowly, and assess the reasons, using the factors that affect speed of diffusion (relative advantage,

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

complexity, trialability, observability, compatibility). The products listed in the exercise can be used for this

(for example, iPod vs. electric car), or others can be chosen.

New Product Development at Red Mango

▪ Activity Type: Video Case

▪ Learning Objectives: 12-01, 12-03

▪ Difficulty: Medium

▪ Activity Summary: This video explores how new product development happens at Red Mango, a

frozen yogurt chain. After the video ends, students are asked questions about the video and related

course concepts.

Activity

▪ Introduction: Founded in 2007 by Dan Kim, Red Mango originally sold frozen yogurt. Its first shop

was in Los Angeles. Success with its frozen yogurt resulted in rapid expansion for the firm. There are

currently more than 200 Red Mango locations in 28 states and two Central American countries. Since

2007, Red Mango has developed many successful new products, including parfaits, fruit smoothies,

and, more recently, blended iced coffee. The accompanying video will illustrate how Red Mango

followed the new product development process to launch its blended iced coffee.

▪ Concept Review: It is almost a requirement today that firms innovate and develop new products.

Customer needs change, markets become saturated, and fashion trends evolve. For these and other

reasons, growth would be very difficult for companies without innovation resulting in new products.

The new product development process typically follows a series of stages. First, new product ideas

must be generated from a variety of sources. Next, these product ideas are turned into concepts that

are tested on consumers. If the concept test is successful, a prototype is manufactured and tested

during the product development stage. Next, some firms choose to test market—they release the

actual product in a limited geographic area to test the market potential. The last two stages are the

actual product launch, followed by evaluation of the results. This evaluation is ongoing because

products must be carefully managed throughout their life cycle.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

The Launch, Death, and Potential Reemergence of Google Glass

▪ Activity Type: Case Analysis

▪ Learning Objectives: 12-01, 12-02, 12-04

▪ Difficulty: Medium

▪ Activity Summary: The short case describes the history of Google Glass, reflecting on what worked,

what didn’t, and what might happen in the future.

Chapter 12 – Developing New Products Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: Google Glass, Google’s first entry into the wearable technology market, had a limited

and unexpectedly brief introduction to the market. This activity is important because new product

development is a challenging area of marketing—and business in general—but is essential to a firm’s

long-term survival. The goal of this activity is to apply new product development concepts and

frameworks to Google’s experience with Glass.

After reading the case, the student is asked to answer questions about the information presented.

ISeeIt Video Case: New Product Development

▪ Activity Type: Video Case

▪ Learning Objectives: 12-03

▪ Difficulty: Easy

▪ Activity Summary: This video case considers the stages of the new product development process

for a potential flavor additive for a bottled water company.

Activity

▪ Introduction: To develop new products and services efficiently, organizations go through a process

to ensure that their products are ready for market. This process is meant to evaluate interest in a

product and helps to increase the chances of success within the marketplace. Hope Springs Water

Co. is using this process to identify opportunities to develop new complementary offerings to its

bottled water. As Ju Li and her marketing team look for product-expansion opportunities, they are

approached by a supplier who would like them to distribute a natural flavoring additive. Before they

agree to distribute the new product, they need to ensure interest within the marketplace and that

preliminary sales data support an expensive national launch. By using the new-product development

process, Hope Springs can make decisions on hard data and a structured process instead of

guessing whether this new additive will be successful within the marketplace.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.