Chapter 10 Textbook Summary.docx

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2320A/B
Professor
Kevin Thompson
Semester
Winter

Description
Chapter 10 Textbook Summary NewProduct Development and Product LifeCycle Strategies A firm can obtain a product in two wayso Acquisition buying a whole company patent or license to product someone elses products o New Product Development the development of original products product improvements product modifications and new brands through the firms own productdevelopment effortsFor companies new products are a key source of growthFor customers they bring new solutions and variety to their livesWhy do so many new products fail o Company may overestimate market size o Incorrectly positioned o Launched at the wrong time o Priced too high o Poorly advertised o Highlevel executive might push a favorite idea o Costs of product development are higher than expectedNew Product Development Process o Idea GenerationThe systematic search for newproduct ideasInternal sourcesthe company can find new ideas through formal research and development from employeesExternal sourcesdistributors and suppliers competitors trade magazines shows seminars government agencies advertising agencies inventors etcMost importantfrom the customers themselvesOther companies actively solicit ideas from customers and in turn customers into creatorsCustomers often create new products and uses on their own and companies can benefit by putting them on the market o Idea ScreeningThe purpose of this stage is to reduce the number of ideasIdea screening sport good ides and drop poor ones as soon as possibleExecutives write up new product ideasThe write up describes the product or service the proposed customer value proposition the target market and the competitionIt makes some rough estimates of market size product price development time and costs manufacturing costs and rate of return
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