Low attendance today. Halfway through semester
U.S. economy is service dominated now, not industry dominated
The Four I’s of Services
- Intangibility
- Inventory
- Inconsistency
- Inseparability
New Products, and Why They Succeed And Fail
- Newness compared to exiting products
- Newness in Legal Terms — Can only advertise as new for one year
- New to market
- New to producer
Consumption Effects Define Newness
- Continuous Innovation — Incremental improvements. Doesn’t require new learning, emphasis on consumer awareness and wide distribution
- Dynamically Continuous Innovation — Disrupts consumer’s normal routine but doesn’t require totally new learning. Advertise points of difference and benefits to consumers
- Discontinuous Innovation — Requires new learning and consumption patterns by consumers. Emphasize educating consumers through product trial and product selling.
Marketing Reasons for Failures
- Insignificant “point of difference”
- Incomplete market and product definition
- Too little market attractiveness
- Poor execution of product mix
- Poor product quality or sensitivity
- Bad Timing
- No economic access to buyers
Stages in the New Product Process
- Strategy development
- Idea Generation
- Customer and Supplier suggestions
- Employee and Co-Worker Suggestions
- Research and Development Breakthroughs
- Competitive Products
- Screening and Evaluation
- Internal experts evaluate products
- External research, focus groups
- Business Analysis
- Development
- Failure Analysis
- Safety Tests
- Market Testing
- Test Marketing
- Test marketing doesn’t always work in small markets
- Test marketing can fail if your test group isn’t representative of your actual market
- Commercialization
- Risky and Uncertain