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298 Part 4 | Product and Price Decisions

previously included in the Dasani product line. Other new
Figure 11.1 Phases of New-Product Development products are line extensions related to existing products.
Finally, a product can be viewed as new when it is
brought to one or more markets from another market.
Idea generation When Daimler brought its Smart Car to the United States,
it was viewed as a new product, although the Smart had
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been out in Europe for years. Before a product is intro-
duced, it goes through the seven phases of the new- product
Screening development process shown in Figure 11.1 : (1) idea gen-
eration, (2) screening, (3) concept testing, (4) business
analysis, (5) product development, (6) test marketing, and
(7) commercialization. A product may be dropped—and
many are—at any stage of development. In this section, we
Concept testing
look at the process through which products are developed
from idea inception to fully commercialized product.

Idea Generation
Business analysis
Businesses and other organizations seek product ideas that
will help them to achieve their objectives. This activity is
idea generation . The fact that only a few ideas are good
Product development enough to be successful commercially underscores the chal-
lenge of the task.
New-product ideas can come from several sources.
They may come from internal sources—marketing man-
Test marketing agers, researchers, sales personnel, engineers, or other
organizational personnel. Brainstorming and incentives
or rewards for good ideas are typical intrafirm devices
for stimulating development of ideas. For example, the
Commercialization idea for 3 M Post-it Notes came from an employee. As
a church choir member, he used slips of paper to mark
songs in his hymnal. Because the pieces of paper fell out,
he suggested developing an adhesive-backed note.
From Pride/ Ferrell , Marketing 2014, 17E. 2014 Cengage Learning.
New-product ideas also may arise from sources outside
the firm, such as customers, competitors, advertising agen-
cies, management consultants, and research organizations. Procter & Gamble is one company
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that gets nearly half of its ideas from inventors and outside consultants. Such consultants are
often used as sources for stimulating new-product ideas. For example, Fahrenheit 212 serves
as an “idea factory” that provides ready-to-go product ideas, including market potential analy-
sis for major Fortune 500 firms such as Campbell’s, Best Buy, Citibank, Coca-Cola, Samsung,
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Adidas, and P&G. When outsourcing new-product development activities to outside organi-
zations, the best results are achieved from spelling out the specific tasks with detailed contrac-
tual specifications. Asking customers what they want from products has helped many firms
become successful and remain competitive. As more global consumers become interconnected
through the Internet, marketers have the chance to tap into consumer ideas by building online
new-product development communities with them. These communities provide consumers with a sense of empowerment
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process A seven-phase and allow them to provide insight for new product ideas that can prove invaluable to the firm.
process for introducing
products Screening
idea generation Seeking
product ideas that will help In the process of screening , the ideas with the greatest potential are selected for further review.
them to achieve objectives During screening, product ideas are analyzed to determine whether they match the organiza-
screening Choosing the most tion’s objectives and resources. Consider that Howard Schultz, the founder of Starbucks, got
promising ideas for further the idea for a coffee café while visiting Italy. While Starbucks has expanded into many coun-
review tries, it has not opened a single store in Italy. As Starbucks screened opportunities for global

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