Question

Chapter 8 Case analysis:

Within your studies of the new product development process, look at the following mini cases and answer the questions that follow:                                                                               

McLobsters Case                                                                                                                                   
Fill in the blanks with the stage name of the new product development process :

When you're a giant company like McDonald's, with locations all over the globe, you can perform test marketing in your own stores. Take the McLobster for instance. I'm sure it began during an _____ _________. They must have said, "Hey, what is missing in our Canadian/New England market?" Or maybe it is coming from a consumer or supplier. Either way, the McLobster passed the ___________ stage "which helps spot good ideas and drop poor ones as soon as possible."

Next, came the _________________, "a detailed version of the idea stated in meaningful consumer terms." This would go something like, "The McLobster: real Atlantic lobster spread over the length of a bun and smothered in creamy, white McLobster sauce...mmm, I'm lovin' it!"

Eventually, after the _____________________ stage where McDonald's described their target market, the planned value proposition, and the sales, market share, and profit goals. Finally, they would have performed a ________________ on the McLobster, reviewing sales, costs, and profit projections to see if they fit with the objectives of the company.

McDonald's wouldn't then just commercialize the product to every McDonald's that serves to their target market, they would first have to do    _______________, by introducing the product and marketing program into real market conditions. Here, they would offer the McLobster at certain locations within their target market.

The McLobster must not have been profitable enough to mass commercialize, but to my understanding it has been re-introduced over the years as a seasonal product.

Now answer the following questions:

1. State 3 (three) of the external sources for ideas?

2. Explain two reasons for new products to fail.

3. Explain 2 important considerations in the commercialization stage. (2 mark)

4. As a marketing manager for McDonalds, explain how your company will apply the concept of social responsibility                                                                                                                    

Answer 1

Answers:

· First blank: I'm sure it began during an “Idea generation”.

· Second blank: the “idea screening”

Third blank: Next, came the “product concept”, "a detailed version of the idea stated in meaningful consumer terms."

· Fourth blank: Eventually, after the “market strategy development” stage where

· Fifth Blank: Finally, they would have performed a “business analysis” on the McLobster,

·
Sixth blank: they would first have to do “test marketing”, by introducing the product and marketing

Explanation:

New product development is the process of converting an idea into a product than bringing the product in the market.

There are seven steps of new product development:

1. Idea generation: An idea is generated and can be in any form. A company can get many ideas from many sources it can be internal sources, external sources, market feedback, market research, competition analysis, etc.

2. Idea screening: The second step is to find and filter the good ideas which are also feasible. It is dependent on companies' strengths, weaknesses, investment capacity, returns on investment, ongoing trends and customers' expectations.

3. Product concept development and testing: Product concept development and testing involve creating a blueprint of the idea. All products which clear the screening stage are converted into concepts. The concept will be taken to the market and tried on a target customer group. The business tries to get feedback on how the customer feels about the product.

4. Business strategy analysis and development: The product concept testing results help to define and formulate the final concept. The company will formulate the business strategy, the product mix, pricing strategy, breakeven points, etc.

5. Product development: The product development stage is where the complete strategy and analysis are implemented. Once all strategies are approved the concept is converted into a tangible product. All branding and marketing strategies are applied. A limited production model or prototype production is done.

6. Test marketing: The prototype is used to conduct research and to get feedback on the product. Customers’ feedback is taken and any changes recommended are initiated. Test marketing validates the entire concept and the company is ready to launch the product.

7. Commercialization: The product is ready and the strategy formulated is utilized. The final decisions are made. The roles and responsibilities are assigned to different functions to start selling the product in the market. The entire business strategy is divided into roles and functions. The duties are demarcated.

To conclude new product development goes through six stages before it is commercialized. This ensures a successful and profitable launch of the product.

· “answered all fill in the blanks”