Product Strategy and Management

560 Pages·2007·5.584 MB·English

by  Michael Baker, Susan Hart

2nd Edition
Product Strategy and Management 2nd Edition
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www.pearson-books.com
an imprint of
9780273694502_COVER.indd 1 27/3/07 08:39:41
PROS_A01.qxd 1/19/08 1:06 PM Page i
PRODUCT STRATEGY AND
MANAGEMENT
SECOND EDITION
MICHAEL BAKER
and
SUSAN HART
PROS_A01.qxd 1/19/08 1:06 PM Page ii
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
First published in 1988 by Prentice Hall
First edition published 1999
Second edition 2007
© Prentice Hall 1999
© Pearson Education Limited 2007
The rights of Michael Baker and Susan Hart to be identified as authors of this work have
been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without either the prior written permission of the
publisher or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of
any trademark in this text does not vest in the author or publisher any trademark
ownership rights in such trademarks, nor does the use of such trademarks imply
any affiliation with or endorsement of this book by such owners.
ISBN: 978-0-273-69450-2
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available from the Library of Congress
10 9 8 7 6 5 4 3 2
11 10 09 08
Typeset in 10/12.5pt Palatino by 35
Printed and bound in Malaysia
The publisher’s policy is to use paper manufactured from sustainable forests.
PROS_A01.qxd 1/19/08 1:06 PM Page iii
Brief contents
Introduction: Product strategy and management xi
Acknowledgements xvii
Part I The theoretical foundations 1
1 Competition and product strategy 3
2 The product in theory and practice 40
3 Buyer behaviour 72
4 The product life cycle in theory and practice 103
5 Product portfolios 136
Part II New product development 155
6 The importance, nature and management of the new product
development process 157
7 New product strategy 197
8 Idea management for new product development 217
9 Screening new product ideas 255
10 Concept development and testing 274
11 Business analysis 308
12 Product testing 329
PROS_A01.qxd 1/19/08 1:06 PM Page iv
iv Brief contents
Part III Product management 355
13 Commercialization: test marketing and launching
the new product 357
14 Managing growth 397
15 Managing the mature product 416
Part IV Product elimination 437
16 Controlling the product line: an overview of
the deletion decision 439
17 Reaching the decision to delete a product 456
18 Implementing the deletion decision 476
19 Reprise 488
PROS_A01.qxd 1/19/08 1:06 PM Page v
Contents
Introduction: Product strategy and management xi
Introduction xi
Perspective xii
Structure xii
Acknowledgements xvii
Part I The theoretical foundations 1
1 Competition and product strategy 3
Introduction 4
What links competitiveness, marketing and product strategy? 5
Marketing and competitive success 7
Environmental change 12
Life cycle analysis 14
Managing competition: product strategy is central 19
Product strategy and management 27
The process of innovation 33
Summary 38
Questions 39
2 The product in theory and practice 40
Introduction 41
What is a product? 41
Objective versus subjective selection criteria 51
Are services different? 55
Branding 58
Classifying new products 62
The Buygrid Analytic Framework 65
New service development 66
Summary 70
Questions 71
3 Buyer behaviour 72
Introduction 73
Models of buyer behaviour 74
Influences on the decision process 76
PROS_A01.qxd 1/19/08 1:06 PM Page vi
vi Contents
A composite model of buying behaviour 81
The adoption and diffusion of new products 89
Researching the market for major innovations 98
Summary 101
Questions 101
4 The product life cycle in theory and practice 103
Introduction 104
The product life cycle 105
The seven stages of the product life cycle 108
Managerial applications of the PLC concept 114
Criticisms of the PLC 118
Operationalizing the PLC 123
Summary 134
Questions 135
5 Product portfolios 136
Introduction 137
The concept of the product portfolio 137
The BCG growth–share matrix 142
Shell’s directional policy matrix 148
Summary 153
Questions 153
Part II New product development 155
6 The importance, nature and management of the new
product development process 157
Introduction 158
New product development models 158
Overview of the stages of the new product development process 160
The usefulness of the process models 165
Factors affecting success and failure of new product development 170
Implications of the success and failure literature for the process:
focusing on the process and the people 183
Summary 196
Questions 196
7 New product strategy 197
Introduction 198
The need for product innovation strategy 198
The components of new product strategy: technologies and markets 204
Summary 215
Questions 216
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Contents vii
8 Idea management for new product development 217
Introduction 218
The objective of idea generation 219
Sources of information for new product ideas 222
Techniques for activating sources of information 231
Managing creativity 249
Summary 253
Questions 254
9 Screening new product ideas 255
Introduction 256
What is screening? 256
The importance of screening 258
Types of screens 265
Screening: process and criteria 269
Summary 272
Questions 273
10 Concept development and testing 274
Introduction 275
The purposes of concept testing 277
What is a new product concept? 282
The process of concept testing 284
Research methods for concept testing 294
Specific techniques for concept development and testing 300
Summary 306
Questions 307
11 Business analysis 308
Introduction 309
What goes into a business analysis? 310
Basic financial concepts 311
Financial techniques for new product development 316
Summary 327
Questions 328
12 Product testing 329
Introduction 330
The purpose of product testing 332
The overriding concerns of product testing 333
Major decisions in constructing a product test 335
Product testing in industrial markets 351
Summary 354
Questions 354
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viii Contents
Part III Product management 355
13 Commercialization: test marketing and launching
the new product 357
Introduction 358
Test marketing 358
Time to market 368
Breaking into the market 373
Reprise 388
Case study: TI Superform – superplastic aluminium 389
Summary 395
Questions 395
14 Managing growth 397
Introduction 398
Resistance to change 398
Leveraging new product growth 402
Computerized tomography: the EMI scanner 404
Sustaining differentiation 411
Summary 415
Questions 415
15 Managing the mature product 416
Introduction 417
Maturity – its nature and causes 417
Offensive strategies 420
Extending the product life cycle 426
Managing the relationship 427
Customer relationship management 431
Summary 434
Questions 435
Part IV Product elimination 437
16 Controlling the product line: an overview of
the deletion decision 439
Introduction 440
The importance of product deletion 441
The reasons for the neglect of product deletion 443
The scope of the deletion decision 446
Triggers in product deletion 448
Summary 454
Questions 455
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Contents ix
17 Reaching the decision to delete a product 456
Introduction 457
Identification of deletion candidates 457
The diagnostic routine: analysis and revitalization 462
Evaluation of deletion candidates: deciding to drop the product 469
Summary 474
Questions 475
18 Implementing the deletion decision 476
Introduction 477
How deletion decisions are implemented 477
Summary 487
Questions 487
19 Reprise 488
Introduction 488
Structure 489
Part I – The theoretical foundations 490
Part II – New product development 495
Part III – Product management 499
Part IV – Product elimination 501
Bibliography 504
Index 527