B2B MarketingProf. Abha Wankhede

Profitability and Growth: Products in decline stage (of PLC) are replaced with new products.

Classification:◦ New to world◦ New to company◦ Improvement to existing product same market◦ Improvement to existing product additional market◦ Repositioning existing product to new market

segment.◦ Products with cost reduction without reducing

performance.

New Product Development

Core Competencies: The root of Industrial Products◦ Product superiority and uniqueness.

Product Quality: Touching the entire supply chain.

Market knowledge Product concept Product development process.

Technical and Production capabilities translate the product concept product development commercial production.

Imp success factors for new product

Idea generation: sales person, industrial customer, distributor/reseller, supplier, design engineer, manager.

Idea screening: ◦ Is the new product in line with the company’s long

term objectives and strategies?◦ Do you have adequate resources (money, people,

skills)?◦ Is it really useful to customers by providing certain

benefits, or solving a specific problem?◦ Does it deliver more value than competing products?◦ What is the future growth, market size, and

competition in the new product industry?

NPD Process

New product idea significant factors

Importance (Weightage)

Company capabilities for product idea

New product Idea Rating

1 Company objectives and strategies

0.2 0.7 0.14

2 Marketing experience and effectiveness

0.2 0.5 0.3

3 Production capabilities and facilities

0.15 0.4 0.06

4 Research and Development know-how

0.15 0.6 0.09

5 Availability of raw material and supplies

0.1 0.7 0.07

6 Financial resources and profitability

0.2 0.8 0.16

1.0 0.62

New Product idea Rating Formula

Concept Development and Testing: ◦ Detailed version of product idea stated in

meaningful customer terms.◦ Tested by getting reactions from customers and

the concept with strongest appeal is chosen. Physical presentation can increase the reliability of

the concept/ virtual reality can be used to get correct feedback.

NPD

Business Analysis: ◦ Projection of Sales, Cost and Profitability for 5-7

yrs. Investment in plant, equipment, working capital and

market development. Market forecast, customers and competitors analysis. Cost of Development, manufacturing and marketing

the product. Likely price levels, profitability and ROI analysis.

NPD

Product Development: Design Process Engineering Tooling Manufacturing testing Final Product

Market Testing: ◦ Alpha and Beta testing: Alpha-performance parameters and

operating cost internally, Beta-potential user site.◦ Introducing the product at Trade shows◦ Testing at distributor/dealer showroom◦ Test marketing: in a limited geography area thru the sales force.

Commercialization: Training sales-force and customer service, product catalogs, price list, introductory offer and launch event/bash/advertisement, stock at warehouse and dealer/distributor locations, customer service/call center readiness, effective feedback systems.

NPD

Demanding customers: ◦ Sustaining innovation make better products

(incremental product improvements or breakthrough products) sell at higher margins.

Less demanding customers: ◦ Disruptive innovation represents a product or service

that is not as good as currently available benefits simpler, more convenient and less expensive. Low end strategy- There should be a customer at low

end. Eg; Southwest Airlines, Jet lite, Motorola low-cost phone offers only voice and text messaging functions.

New market strategy- large population who have historically lacked the money, equipment or skill to acquire this product or service. Eg; Canon desktop photocopier 1980s, Blackberry relative to notebook computers.

Innovation

Solution Centered Perspective◦ Begins with analysis of customer problems.◦ Value proposition- creating and delivering superior

customer solutions◦ Value creation- is co-created by the customer and

the firm.◦ Designing offerings- start with customer problems

and assemble required products and services to solve it.

◦ Company customer relationship- Interaction based.

Managing Services for Business Markets

From a collaborative engineering perspective, mass customization can be viewed as collaborative efforts between customers and manufacturers, who have different sets of priorities.

It aims to deliver product and services that best meet customers’ needs with near mass production efficiency

Mass Customization

The paradigm shift to mass customization is mainly propelled by three forces :

Market demand - ‘the mass market is dead and segmentation has progressed to the era of mass customization’ – Kotler(1989)

Market competition - Product variety is exploding while product life cycle is shortening

Technological revolutions - Flexible manufacturing systems allow manufacturers to quickly adapt to changes without incurring high penalty in terms of cost and lead time

Application of Mass Customization

Application of Mass Customization

Application of Mass Customization

Application of Mass Customization

Application of Mass Customization

Thank You!