Executive Summary

Once a company has segmented the market, chosen its target customer groups, identified their needs, and determined its desired market positioning, it is ready to develop and launch new products. Although the rate of new product failure is disturbingly high, companies can improve their chances of success by creating new products with a high product advantage. Eight stages are involved in the new-product development process: idea generation, screening, concept development and testing, marketing strategy development, business analysis, product development, market testing, and commercialization. The purpose of each stage is to determine whether the idea should be dropped or moved to the next stage.

The consumer-adoption process is the process by which customers learn about new products, try them, and adopt or reject them. The five stages in this process are awareness, interest, evaluation, trial, and adoption. This process is influenced by many factors beyond the marketer's control, including consumers' and organizations' willingness to try new products, personal influences, and the characteristics of the new product or innovation.

Because economic conditions change and competitive activity varies, companies normally reformulate their marketing strategy several times during the product life cycle. The introduction stage of this cycle is marked by slow growth and minimal profits as the new product gains distribution. If successful, the product enters a growth stage marked by rapid sales and increasing profits. The company attempts to improve the product, enter new market segments and distribution channels, and reduce prices slightly. In the maturity stage, sales growth slows and profits stabilize, causing the firm to try to modify the market, the product, or the marketing mix to renew sales growth. Finally, the product enters the decline stage, when the firm must decide whether to increase, maintain, or decrease its investment; harvest the product; or divest as advantageously as possible.

In the competitive global marketplace, the key to competitive advantage is differentiation. A market offering can be differentiated by product, services, personnel, channel, and image. A difference is worth establishing to the extent that it is important, distinctive, superior, preemptive, affordable, and profitable. Positioning is the act of designing the company's offering and image to occupy a distinctive place in the target market's mind. Many marketers advocate positioning according to a single product benefit, although double- and triple-benefit positioning can be successful if used carefully.

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Salehoo Secrets and Tips

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