Criteria changes across product development stages

This paper analyzes the criteria used at making go/no-go decisions at major points in the product-development process, taking each phase separately. First, the variation in the sets (market, product, and financial) criteria used from one phase to another is studied. Second, the specific criteria deployed are analyzed. The results of the decision-systems interviews conducted show shifts in weights among the three sets of criteria as the development cycle progresses. In terms of criteria, the product-development process can be summarized using the following three questions in this specific order: 1) “Is there a market for the concept?” 2) Can the concept be transformed into a concrete product?” and 3) “Can the concrete product be manufactured and marketed profitably?” The analysis of specific criteria reveals that the use of some criteria is restricted to one particular phase, whereas some are used at every decision-making point. Also, the orientation of the company in question will cause variation among specific criteria use and weighting. Some factors, however, are quite universally applicable.     

Problems in Demand Estimation For a New Technology

It is difficult to estimate demand for a new product or service when a prelaunch test market is not practical. This is often the case for products that incorporate advanced technology. In this article, Robert Thomas reviews 29 different research methodologies used to measure demand for a new telecommunications service. He found several problems in how the research was designed and executed and offers a number of suggestions for improving the accuracy of demand estimates.     

Estimating Market Growth for New Products: An Analogical Diffusion Model Approach

There has been a lot of interest in diffusion models as a basis for prelaunch estimates of the sales of new products, and indeed there have been several models developed that have achieved fairly good acceptance by new product managers. One of the limitations of such models, however, has been the requirement that a sales history for the new product, even a short one from a test market, for example, be available to derive the parameters of the model. For some types of products—consumer durables, services, industrial products, for example—a sales history isn't available. In this article, Professor Robert Thomas suggests some steps toward the development of models that incorporate the attractive features of diffusion models. His approach is to use, in a systematic way, the sales histories of products that can be considered to have analogous features from a buyer's point of view. He illustrates the approach by forecasting the sales of a new service.     

Critical path method for introducing an industrial product

New product development continues to be a vital evil for most organizations. Considerable attention has been directed toward this function in the consumer goods field but relatively little research has been directed toward this critical task for producers of industrial goods. Industrial goods marketing managers seem to agree that error at the announcement/ introduction phase of the new product development process is responsible for the greatest number of new product failures. This article suggests use of the critical path method to ensure success at this crucial stage.     

A framework for strategic industrial pricing

A model for pricing decision making in an industrial setting is described. Written from the perspective of a price setter, the model starts with an evaluation of the relative strengths and weaknesses of both buyer and seller. These evaluations are then input into a strategic framework, which integrates tactical considerations with several environmental concerns. The article concludes with a set of strategic pricing alternatives, in a matrix form, to be used by price negotiators and pricing executives of industrial companies.     

Reducing overreaction in contract markets

Predicting market share can be difficult for industrial firms whose sales occur in the form of a few large contracts received at irregular intervals during the course of a year. This article discusses the problems that this type of sales pattern may cause and provides a solution for determining probabilistic share forecasts.     

The effective use of marketing research consultants

Relatively little has been written about effectively managing the buyer-seller relationship for marketing research services. To provide insights into effectively managing this relationship, a survey of both buyers and sellers of marketing research services was conducted. Major findings were that proper problem definition, a familiarity with research methods by the research buyer, and continuous communication between buyer and seller were critical determinants of a successful consultant relationship. For best results the market research buyer-seller relationship should be treated as a mutually beneficial one, not one of conflict or acrimony.     

Marketing research by a small industrial firm: A case study

There is a growing need today for industrial marketers to conduct marketing research and use the results in making profitable business decisions. This paper describes a marketing research study conducted by a small industrial firm and discusses the nature and extent of its impact on the firm's operations. Several implications and practical guidelines are derived for industrial marketers in general, based on the firm's marketing research experience.     

Guidelines for marketing a new industrial product

This article presents an illustration of what evaluations and obstacles a new product can face in an industrial market. Guidelines are also suggested which will hopefully better prepare industrial marketers for more success in marketing new products.     

How industrial salespeople gain customer trust

This study investigated how industrial salespeople gain the trust of their customers. Results show that trust increases as the customer gains the impression that the salesperson is dependable, honest, competent, customer oriented, and likeable. Based on the results, a general model of trust building is suggested.     

Industrial product concept testing

Concept tests are widely used for consumer packaged goods products; however, their use has not been widely described for industrial products. Concept tests can be particularly useful in situations where creation of working prototype products is expensive, as with many industrial products. We report a concept testing procedure that incorporates many features unique to industrial marketing problems. The results of a limited pilot test of the method are given.     

Modelling organizational buying as a sequence of decisions

Organizational buying consists of several stages, each of which yields a decision. These decisions may be linked together in a sequence to form a simple yet powerful model that marketers can use to predict outcomes of proposed marketing programs and to diagnose problems in existing programs. The model may be used with qualitative or quantitative data. The model helps both practitioners and scholars to identify research needs and opportunities.     

A comparison of opinion and regression forecasting for an industrial product

Opinion-based forecasting techniques are widely used by industrial marketers. Rarely, however, are the results of these forecasts compared with alternative forecasting techniques and/or evaluated against actual operating results. In this study, opinion-based forecasting results for an industrial equipment manufacturer are evaluated against actual sales data. Further, the opinion-based predictions are compared with the predictions of a naive regression model. The results of these analyses suggest that the current opinion-based forecasting system is deficient.     

Grid analysis for sales supervision

Falling to recognize the unique need and desire of salespeople, the sales manager tends to allocate supervisory time according to the amount of his or her past selling experience. This time allocation results in either the excessive or insufficient supervision of sales personnel. This article describes a process of arriving at a more optimum allocation of supervisory time.     

Industrial buying behavior in Brazil

Many firms in less developed countries (LDCs) make little use of available information when they are considering investing in new production technology. A very small number of alternative suppliers are generally considered and supplier evaluation is often perfunctory. A number of questions concerning the information on alternative suppliers are raised and answers were sought in a field study carried out in Brazil. The factors that influence the degree of search by managers for information on alternatives included the relative cost of the equipment, the familiarity of the buyer with the technology, the cost of acquiring the information, the available resources of the company, and the buyer's expectations concerning quality and price, Implications for industrial marketing in LDCs are discussed and suggestions are made concerning the assistance that LDC governments can provide to firms that import production technology from the industrialized countries.     

Effective selling approaches to buyers' objections

Approaches for responding to an industrial buyer's indecision and price objections were uncovered. When an industrial buyer refuses to make a purchase decision or objects to price, an effective salesperson will seek understanding of the buyer's indecision, consciously look for common underlying objections, address the buyer's specific concern, and establish a decision deadline for the buyer.     

A flexible approach to determining financial terms of sale

With high inflation and interest rates the financial or credit terms of a sale are an increasingly important source of foods for buyers and an expensive cost for sellers. This article proposes some guidelines for setting terms of sale policies which may benefit both buyers and sellers. A method for determining the best terms alternative from the buyers perspective is also described.