LO 9.3: Understand the new-product development process.

Assignment

The short descriptions that follow provide information about different companies. In each case, there is at least one major problem with the way the company is currently approaching the newproduct development process. Read and evaluate each statement carefully, and then explain:

1. your diagnosis of the problem, and
2. your recommendation for what the company should do as a substitute for what is described in the case situation.

1. Superior Wire, Inc. produces and sells special types of wire used in a variety of telecommunication applications. The firm's initial growth came from sales of a new wire that was used by cellular telephone service companies when setting up transmission stations. However, growth in that market has slowed. Moreover, at present, most of the other products offered by the firm are similar to those available from a variety of other suppliers. Angelina Stowe, the marketing manager for the company, recently scheduled a meeting with the company president to discuss problems of falling profits. Stowe expressed concern that the company did not have a specific person responsible for identifying new products. The president pointed out that few other firms in their industry had such a position-and generally argued that newproduct thinking was the responsibility of everyone in the firm. After further discussion, the president agreed to let Stowe send out a memo to all company employees encouraging them to be alert to new product ideas-and to submit any ideas to the research and development department for analysis of their technical feasibility.

Problem ___________________________________________

Recommendation ____________________________________

1. Assurance Drug Company has developed a promising new nonprescription tablet to relieve the symptoms of allergy sufferers. The idea has successfully passed the screening and idea evaluation stages of the company's newproduct development process. The company has also completed concept tests and produced some tablets. Now, the head of the newproduct development group has sent the following memo to the marketing department. "Our laboratory tests have satisfied the Food and Drug Administration criteria and we are ready to move ahead with a final test market prior to commercialization. I want you to start thinking about this now. If the product does well in the test market, we will need to develop the rest of the marketing mix. We will want to come up with an attentiongetting package design-one that will really stand out on a drugstore shelf. We will also need to decide on the brand name we would use in a national distribution. For now, we will just price the product in test market at the same price as our cold tablets. So final pricing decisions will also need to be made. And, of course, we will need to decide what type of promotion to use-and what message we want to get across to potential customers. I wanted to alert you to these exciting developments so that you could be getting your ideas together. We want to be ready to move quickly into commercialization if the test market is successful.

Problem ___________________________________________

Recommendation ____________________________________