Chapter Ten
PRODUCT MANAGEMENT AND NEW PRODUCT DEVELOPMENT
MANAGING PRODUCTS OVER THEIR LIFE CYCLES
Product Life Cycle:
1) Introduction: Low sales
2) Growth: Sales grow/profits peak
3) Maturity: Sales level off/competition tough
4) Decline: New products replace old products
See Exhibit 10-1, page 271 for a diagram of the product life cycle.
Individual brands may not follow patterns
Depends on how market is defined. e.g., microwaves in foreign markets
PRODUCT LIFE CYCLES VARY IN LENGTH
|
|
Some products move quickly: when they have competitive advantage, easy to use, etc. |
|
|
Product life cycles are getting shorter -- because of rapidly changing technology |
|
|
Early birds get profits -- must develop new products constantly |
|
|
Fashions have extremely short life-cycles. |
PLANNING FOR DIFFERENT STAGES OF PRODUCT LIFE CYCLE
See exhibit 10-2
Managing maturing products: Improve products or develop new products, or new strategy
Develop new strategies for different markets
Phasing out dying products: Might be possible to milk product if competitors move out quickly.
NEW PRODUCT PLANNING
New product: One that is new in any way!!
FTC says product can be sold only as “new” for six months.
Some firms hold back new products until existing patents run out, planned obsolesces of products, etc.
NEW PRODUCT DEVELOPMENT PROCESS
New Product Development Process
|
|
Idea generation |
|
|
Screening |
|
|
Idea evaluation |
|
|
Development |
|
|
Commercialization |
See Exhibit 10-4, page 283 for a diagram of new product development as a process.
Must have top management support
Need new product development department/committee
Need process and new product managers!!
See Exhibit 10-6, page 259 for the new product planning success factors
Next Steps: Please review the PowerPoint Overview slides (14-19) for this chapter. Then proceed to the Discussion Area.
