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New Product Development

In: Business and Management

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Food Marketing APEC 4451 Fall Semester 2010 New Product Development Process Targeting and Segmentation

Dennis J. Degeneffe The Food Industry Center University of Minnesota

Why Introduce New Products?
• The Case For Introducing New Products
– – – “Organic Growth” - Shareholder value Competitive Position Capacity Utilization



The Case Against Introducing New Products
– – Risk – the odds against success • High Odds of Failure* • High Cost of Failure “Cannibalization” of existing business.



Therefore introducing new products is a risky business!

New Product Development Process

• A systematized approach for the development of new products to manage risk. • A general approach that is followed by most major consumer goods companies.
– Includes the infusion of creativity… – … and the rigor of evaluative decision points – or “Stage Gates”

New Product Development Process
Overall Process is made up of 8 stages.
Opportunity Identification Idea Generation Concept Development Concept Concept Testing

Product Development Positioning Development

STM Confirmation Advertising Testing

Test Test Marketing

Commercialization

New Product Development Process
… Some are “developmental” sages, and some are “evaluative” stages.
Opportunity Identification Idea Generation Concept Development Concept Testing*

Product Development Positioning Development

STM Confirmation Advertising Testing

Test Marketing*

Commercialization

*”Stage Gates”

Developmental Stages About how to …
• Is more constructive than evaluative - provides guidance. • Fosters creativity and innovation • Generates ideas • Obtains insights from consumers/customers on what they want.

Stage Gates
• • Evaluative stages –“go/no go” decisions Requires an objective assessment of the marketing initiative prior to proceeding further:
– Will it fit: •...

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