Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Product Management
and New−Product
Development
Text © The McGraw−Hill
Companies, 2002300 Chapter 10
ConclusionNew-product planning is an increasingly important
activity in a modern economy because it is no longer
very profitable to just sell me-too products in highly
competitive markets. Markets, competition, and prod-
uct life cycles are changing at a fast pace.
The product life cycle concept is especially important
to marketing strategy planning. It shows that a firm needs
different marketing mixes—and even strategies—as a
product moves through its cycle. This is an important
point because profits change during the life cycle—with
most of the profits going to the innovators or fast copiers.
We pointed out that a product is new to a firm if it is
new in any way or to any target market. But the Federal
Trade Commission takes a narrower view of what you
can call “new.”
New products are so important to business survival
that firms need some organized process for developing
them. We discuss such a process and emphasize that it
requires a total company effort to be successful.
The failure rate of new products is high—but it is
lower for better-managed firms that recognize product
development and management as vital processes. Some
firms appoint product managers to manage individual
products and new-product teams to ensure that the
process is carried out successfully.Questions and Problems- Explain how industry sales and industry profits be-
have over the product life cycle. - Cite two examples of products that you feel are cur-
rently in each of the product life-cycle stages.
Consider services as well as physical goods. - Explain how you might reach different conclusions
about the correct product life-cycle stage(s) in the
worldwide automobile market. - Explain why individual brands may not follow the
product life-cycle pattern. Give an example of a
new brand that is not entering the life cycle at the
market introduction stage. - Discuss the life cycle of a product in terms of its
probable impact on a manufacturer’s marketing mix.
Illustrate using personal computers. - What characteristics of a new product will help it to
move through the early stages of the product life cycle
more quickly? Briefly discuss each characteristic—
illustrating with a product of your choice. Indicate
how each characteristic might be viewed in some
other country. - What is a new product? Illustrate your answer.
8. Explain the importance of an organized new-product
development process and illustrate how it might be
used for (a)a new hair care product, (b)a new chil-
dren’s toy, and (c)a new subscribers-only cable
television channel.
9. Discuss how you might use the new-product devel-
opment process if you were thinking about offering
some kind of summer service to residents in a beach
resort town. - Explain the role of product or brand managers. When
would it make sense for one of a company’s current
brand managers to be in charge of the new-product
development process? Explain your thinking. - If a firm offers one of its brands in a number of differ-
ent countries, would it make sense for one brand
manager to be in charge, or would each country re-
quire its own brand manager? Explain your thinking. - Discuss the social value of new-product develop-
ment activities that seem to encourage people to
discard products that are not all worn out. Is this an
economic waste? How worn out is all worn out?
Must a shirt have holes in it? How big?
Suggested Cases- Pillsbury’s Häagen-Dazs
- ChemTech
- Outdoor World, Inc.