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Chapter 12 - Developing New Products Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
8
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
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
9
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-
01
02
03
04
Stages of the Product Life Cycle
Click & Drag
X
The Product Development Process
Click & Drag
X
Sara Lee: Developing a New Product
Video Case
X
X
X
You Be the Judge: Click Here, Be Sued
Video Case
X
X
X
Diffusion of Innovation
Click & Drag
X
New Product Development at Red Mango
Video Case
X
X
The Launch, Death, and Potential Reemergence of
Google Glass
Case Analysis
X
X
X
ISeeIt Video Case: New Product Development
Video Case
X
Stages of the Product Life Cycle
▪ Activity Type: Click & Drag
▪ Learning Objectives: 12-04
Chapter 12 - Developing New Products Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
10
▪ 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
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11
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
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
12
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
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
13
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
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
14
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.
