Roadmap: Previewing the Concepts
                        
     1. Explain how companies find and 
          develop new-product ideas.
     2. List and define the steps in the new-
          product development process.
     3. Describe the stages of the product 
          life cycle.
     4. Describe how marketing strategies 
          change during the product’s life 
          cycle.
       Copyright 2007, Prentice Hall, Inc.                          8-2
       Case Study
       Case Study
        Apple Computer – Innovation at 
        Apple Computer – Innovation at 
                                Work
                                Work
          Firm History                      Firm Recovery
    Steve Jobs’s creativity led       Steve Jobs returns in 1997 
      to innovation in user              and revitalizes Apple by 
      friendliness of computers.         first launching the iMac.
    LazerWriters and the              The Mac OS X next breaks 
      Macintosh established              ground and acts as a 
      Apple firmly in desktop            launching pad for a new 
      publishing market.                 generation of computers 
    Status as market share              and software products.
      leader and innovator was         iPod and iTunes change 
      lost in the late 1980s after       the face of music and are 
      Jobs left the company.             the hit of the decade.
       Copyright 2007, Prentice Hall, Inc.                         8-3
              New-Product Development 
              Strategy
      Strategies for obtaining new-product 
        ideas:
        –Acquisition of companies, patents, 
           licenses
        –New product development, product 
           improvements and modifications
       Copyright 2007, Prentice Hall, Inc.                         8-4
              New-Product Failures
      Only 10% of new consumer products are still 
       on the market and profitable after 3 years.
      Industrial products failure rate as high as 30%.
      Why do products fail?
        – Overestimation of market size
        – Design problems
        – Incorrectly positioned, priced, or advertised
        – Pushed despite poor marketing research findings
        – Development costs
        – Competition
       Copyright 2007, Prentice Hall, Inc.                         8-5
              Major Stages in New-Product 
              Development
      Idea generation
      Idea screening
      Concept development and testing
      Marketing strategy development
      Business analysis
      Product development
      Test marketing
      Commercialization
       Copyright 2007, Prentice Hall, Inc.                         8-6