Transcript `new` product?

FORESTRY
WOOD
PRODUCTS
Assoc. Prof. Dr. Nickola Stoyanov
University of Forestry
Sofia, Bulgaria
structure of a product
Base use
Generic
Expected product
Augmented product
Potential product
Base use
 In general, the main benefit of a product is
abstract in nature.
 When booking a hotel room, one expects to
find sleep and rest at night. However, these
features cannot be bought in this way.
 Only the generic product is marketable - in the
case of the hotel, this will be represented by at
least a bed and a receptionist's desk
Generic Product
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Quality
Special characteristics
Branch
Style
Packing
Expected product
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Placement (distribution)
Price
Installation
Service
Garantee
Augmented product
 Additional benefits
DEFINITION OF THE
PRODUCT
 Product is the sum of the physical,
psychological, and sociological
satisfactions that the buyer derives from
purchase, ownership, and consumption.
 From this standpoint, products are
consumer-satisfying objects that include
such things as accessories, packaging,
and service.
Product Classification
 Agricultural products and raw materials.
 Industrial goods:
a.Raw materials and semifinished goods.
b.Major and minor equipment, such as basic
machinery, tools, and other processing
facilities.
c.Parts or components, which become an
integral element of some other finished good.
d.Supplies or items used to operate the
business but that do not become part of the
final product.
Product Classification
 Consumer goods:
a.Convenience goods, such as food, which
are purchased frequently with minimum effort.
Impulse goods would also fall into this
category.
b.Shopping goods, such as appliances,
which are purchased after some time and
energy are spent comparing the various
offerings.
c.Specialty goods, which are unique in some
way so the consumer will make a special effort
to obtain them.
New product
 New products are a vital part of a firm's
competitive growth strategy.
What is a 'new' product?
 A new product will be considered
anything which is perceived as such by
the consumer, or with which the firm has
no previous experience. The former
permits the inclusion of variants in
existing products, and their packaging, as
well as totally new products such as
satellite television, body scanners or
laptop computers.
NEW PRODUCT POLICY
(”How many ways can a product be
new?“)
 A product performing an entirely new function, such as
television, which for the first time permitted the
transmission of audiovisual signals.
 A product that offers improved performance of an
existing function, such as a wristwatch whose balance
wheel has been replaced by a tuning fork.
 A product that is a new application of an existing
product. For example, the aerosol bomb, which was
first developed for insecticides, was later applied in
paints.
 A product that offers additional functions. The handsfree telephone, for instance, does what the earlier
telephone did, plus more.
NEW PRODUCT POLICY
(”How many ways can a product be
new?“)
 An existing product offered to a new market. This may
be done, for example, by repositioning or by taking a
regional brand into other regions.
 A product that through lower cost is able to reach more
buyers. Hand calculators are an example.
 An upgraded product defined as an existing product
integrated into another existing product. The clockradio is an example.
 A downgraded product. For example, a manufacturer
switches from buying a component to producing a
cheaper component in-house and marketing it.
 A restyled product. Annual auto and clothing changes
are examples.
The New product
Development Process
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Idea generation
Idea screening
Project planning
Product development
Test marketing
Commercialization
Idea Generation
 Every product starts as an idea. But all new product
ideas do not have equal merit or potential for economic
or commercial success. Some estimates indicate that as
many as 60 or 70 ideas are necessary to yield one
successful product. This is an average figure, but it
serves to illustrate the fact that new product ideas have a
high mortality rate. In terms of money, of all the dollars of
new product expense, almost three fourths go to
unsuccessful products.
 The problem at this stage is to ensure that all new
product ideas available to the company at least have a
chance to be heard and evaluated. This includes
recognizing available sources of new product ideas and
funneling these ideas to appropriate decision makers for
screening.
Idea Screening
 The primary function of the screening stage is
twofold: first, to eliminate ideas for new products
that could not be profitably marketed by the firm
and, second, to expand viable ideas into a full
product concept. New product ideas may be
eliminated either because they are outside the
fields of the firm's interest or because the firm
does not have the necessary resources or
technology to produce the product at a profit.
However, other ideas are accepted for further
study because they appear to have adequate
profit potential and offer the firm a competitive
advantage in the market.
Project Planning
 The product proposal is evaluated further and responsibility for the
project is assigned to a project team.
 The proposal is analyzed in terms of production, marketing,
financial, and competitive factors.
 A development budget is established, and some preliminary
marketing and technical research is undertaken.
 The product is actually designed in a rough form.
 Alternative product features and component specifications are
outlined.
 Project plan is written up, which includes estimates of future
development, production, and marketing costs along with capital
requirements and manpower needs.
 A schedule or timetable is also included.
 The project proposal is given to top management for a go or no-go
decision.
Product Development
 At this stage the product idea has been
evaluated from the standpoint of
engineering, manufacturing, finance, and
marketing. If it has met all expectations, it
is considered a candidate for further
research and testing. In the laboratory,
the product is converted into a finished
good and tested.
Test Marketing
 Up until now the product has been a company
secret. Now management goes outside the
company and submits the product candidate
for customer approval. Test marketing
programs are conducted in line with plans for
launching the product. At this stage, primary
attention is given to the general marketing
strategy to be used and the appropriate
marketing mix. Test findings are analyzed, the
product design is frozen into production, and a
marketing plan is finalized.
Commercialization
 This is the launching step. During this stage,
heavy emphasis is on the organization
structure and management talent needed to
implement the marketing strategy. Emphasis is
also given to following up such things as bugs
in the design, production costs, quality control,
and inventory requirements. Procedures and
responsibility for evaluating the success of the
new product by comparison with projections
are also finalized,
CAUSES OF NEW
PRODUCT FAILURE
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Faulty estimates of market potential.
Unexpected reactions from competitors.
Poor timing in the introduction of the product.
Rapid change in the market (economy) after the
product was ap
proved.
Inadequate quality control.
Faulty estimates in production costs.
Inadequate expenditures on initial promotion.
Faulty test marketing.
Improper channel of distribution.
Need for Research
 In many respects it can be argued that the keystone activity of any
new product planning system is research - not just marketing
research but technical research as well.
 Regardless of the way in which the new product planning function
is organized in the company, new product development decisions
by top management require data that provide a base for making
more intelligent choices.
 New product project reports ought to be more than a collection of
"expert" opinions.
 Top management has a responsibility to ask certain questions,
and the new product planning team has an obligation to generate
answers to these questions based on research that provides
marketing, economic, engineering, and production information
New product management
and development –some
conclusions
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Most manufacturers cannot live without new products. It is
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common place for major companies to have 50 percent or
more of current sales in products new in the past 10 years.
Many new products are failures. Estimates of new product
failure range from 33 percent to 90 percent.
Companies vary widely in the effectiveness of their new
product programs.
Common elements tend to appear in the management
practices that generally distinguish the relative degree of
efficiency and success between companies.
About four out of five hours devoted by scientists and
engineers to technical development of new products are
spent on projects that do not reach commercial success
Product life-cycle phase's
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Birth;
Growth;
Maturity;
Decline and death.
PRODUCT LIFE CYCLE
Introduction phase
(Birth)
There are usually high production
and marketing costs and, since
sales are only beginning to
materialize, profits are low or
nonexistent.
Growth stage
Profits increase and are positively
correlated with sales as the market
begins trying and adopting the product.
Maturation
Profits for the initiating firm do not keep
pace with sales because of competition.
Here the seller may be forced to
"remarket" the product, which may
involve making price concessions,
increasing product quality, or expanding
outlays on advertising and sales
promotion just to maintain market share.
Decline
Seller must decide whether to:
(a) drop the product,
(b) alter the product,
(c) seek new uses for the product,
(d) seek new markets, or
(e) continue with more of the same.
Preliminary classification of forest and tree
products
Forest and
tree products
Non-wood
forest products
Wood products
Industrial wood,
Fuelwood and
charcoal
Small woods
Plants
and plant products
Forest services
Animal and
Animal products
ROUNDWOOD
All round wood felled or otherwise harvested and
removed. It comprises all wood obtained from removals,
i.e. the quantities removed from forests and from trees
outside the forest, including wood recovered from
natural, felling and logging losses during the period,
calendar year or forest year. It includes all wood
removed with or without bark, including wood removed in
its round form, or split, roughly squared or in other form
(e.g. branches, roots, stumps and burls (where these are
harvested) and wood that is roughly shaped or pointed.
It is an aggregate comprising wood fuel, including
wood for charcoal and industrial roundwood (wood in the
rough). It is reported in cubic metres solid volume
underbark (i.e. excluding bark).
WOOD FUEL (INCLUDING
WOOD FOR CHARCOAL)
 Round wood that will be used as fuel for
purposes such as cooking, heating or power
production.
It includes wood harvested from main stems,
branches and other parts of trees (where these
are harvested for fuel) and wood that will be
used for charcoal production. It also includes
wood chips to be used for fuel that are made
directly (i.e. in the forest) from roundwood.
INDUSTRIAL ROUNDWOOD
(WOOD IN THE ROUGH)
 All round wood except wood fuel.
The customs classification systems used
by most countries do not allow the division
of Industrial Round wood trade statistics
into the different end-use categories that
have long been recognized in production
statistics (i.e. sawlogs and veneer logs,
pulpwood and other industrial roundwood).
PULPWOOD, ROUND AND
SPLIT
 Round wood that will be used for the
production of pulp, particleboard or
fiberboard.
It includes: round wood (with or without
bark) that will be used for these purposes
in its round form or as split wood or wood
chips made directly (i.e. in the forest)
from round wood.
OTHER INDUSTRIAL
ROUNDWOOD
 Industrial round wood (wood in the
rough) other than saw logs, veneer logs
and/or pulpwood.
It includes round wood that will be used
for poles, piling, posts, fencing, pit props
tanning, distillation and match blocks,
etc.
WOOD CHARCOAL
 Wood carbonized by partial combustion
or the application of heat from external
sources.
It includes charcoal used as a fuel or for
other uses, e.g. as a reduction agent in
metallurgy or as an absorption or filtration
medium.
CHIPS AND PARTICLES
 Wood that has been reduced to small
pieces and is suitable for pulping, for
particle board and/or fibreboard
production, for use as a fuel, or for other
purposes.
It excludes wood chips made directly in
the forest from roundwood (i.e. already
counted as pulpwood, round and split).
WOOD RESIDUES
 The volume of round wood that is left over after
the production of forest products in the forest
processing industry (i.e. forest processing
residues) and that has not been reduced to
chips or particles.
It includes sawmill rejects, slabs, edgings
and trimmings, veneer log cores, veneer
rejects, sawdust, residues from carpentry and
joinery production, etc.
SAWLOGS AND VENEER
LOGS
 Round wood that will be sawn (or chipped)
lengthways for the manufacture of sawn wood
or railway sleepers (ties) or used for the
production of veneer (mainly by peeling or
slicing).
It includes round wood (whether or not it is
roughly squared) that will be used for these
purposes; shingle bolts and stave bolts; match
billets and other special types of round wood
(e.g. burls and roots, etc.) used for veneer
production.
SAWNWOOD
 Wood that has been produced from both
domestic and imported round wood,
either by sawing lengthways or by
aprofile-chipping process and that
exceeds 6 mm in thickness.
It includes planks, beams, joists, boards,
rafters, scantlings, laths, boxboards and
"lumber", etc., in the following forms:
unplaned, planed, end-jointed, etc.
WOOD-BASED PANELS
 This product category is an aggregate
comprising veneer sheets, plywood,
particle board, and fiberboard.
VENEER SHEETS
 Thin sheets of wood of uniform thickness,
not exceeding 6 mm, rotary cut (i.e.
peeled), sliced or sawn.
It includes wood used for the
manufacture of laminated construction
material, furniture, veneer containers,
etc.
PLYWOOD
 A panel consisting of an assembly of veneer sheets
bonded together with the direction of the grain in
alternate plies generally at right angles. The veneer
sheets are usually placed symmetrically on both sides of
a central ply or core that may itself be made from a
veneer sheet or another material.
It includes veneer plywood (plywood manufactured by
bonding together more than two veneer sheets, where
the grain of alternate veneer sheets is crossed, generally
at right angles); core plywood or blockboard (plywood
with a solid core (i.e. the central layer, generally thicker
than the other plies) that consists of narrow boards,
blocks or strips of wood placed side by side, which may
or may not be glued together); cellular board (plywood
with a core of cellular construction); and composite
plywood (plywood with the core or certain layers made of
material other than solid wood or veneers).
PARTICLE BOARD
(INCLUDING ORIENTED
STRANDBOARD (OSB))
 A panel manufactured from small pieces of
wood or other ligno-cellulosic materials (e.g.
chips, flakes, splinters, strands, shreds, shives,
etc.) bonded together by the use of an organic
binder together with one or more of the
following agents: heat, pressure, humidity, a
catalyst, etc. The particle board category is an
aggregate category.
It includes oriented strandboard (OSB),
waferboard and flaxboard.
ORIENTED STRANDBOARD
(OSB)
 A structural board in which layers of narrow
wafers are layered alternately at right angles in
order to give the board greater
elastomechanical properties. The wafers,
which resemble small pieces of veneer, are
coated with e.g. waterproof phenolic resin glue,
interleaved together in mats and then bonded
together under heat and pressure. The
resulting product is a solid, uniform building
panel having high strength and water
resistance.
FIBREBOARD
 A panel manufactured from fibres of
wood or other ligno-cellulosic materials
with the primary bond deriving from the
felting of the fibres and their inherent
adhesive properties (although bonding
materials and/or additives may be added
in the manufacturing process).
MEDIUM DENSITY
FIBREBOARD (MDF)
 Fibreboard of a density exceeding 0.5
g/cm3 but not exceeding 0.8 g/cm3.
WOOD PULP
 Fibrous material prepared from
pulpwood, wood chips, particles or
residues by mechanical and/or chemical
process for further manufacture into
paper, paperboard, fibreboard or other
cellulose products.
PAPER AND PAPERBOARD
 The paper and paperboard category is an
aggregate category. In the production
and trade statistics, it represents the
sum of graphic papers; sanitary and
household papers; packaging materials
and other paper and paperboard.
SECONDARY WOOD
PRODUCTS
FURTHER PROCESSED
SAWNWOOD
 Wood sawn or chipped lengthwise
(including strips and friezes for parquet
flooring, not assembled) and
continuously shaped (tongued, grooved,
rebated, V-jointed, beaded, moulded,
rounded or the like) along any of its
edges or faces, whether or not planed,
sanded or finger jointed.
WOODEN WRAPPING AND
PACKAGING MATERIAL
 Packing cases, boxes, crates, drums and
similar packings, of wood; cable-drums of
wood; pallets, box pallets and other load
boards, of wood; pallet collars of wood.
Casks, barrels, vats, tubs and other
coopers' products and parts thereof, of
wood, including staves.
BUILDER’S JOINERY AND
CARPENTRY OF WOOD
 Including windows and doors and
coverings thereof as well as cellular wood
panels, assembled parquet panels,
shingles and shakes.
WOODEN FURNITURE
 Seats with wooden frames as wooden
camping and garden seats etc. and parts
thereof. Wooden furniture other than
seats as of a kind used in offices, in the
kitchen, bedrooms and elsewhere, as
well as parts of all these.
PREFABRICATED
BUILDINGS
 Log cabins, houses prefabricated from
particle board.
Conclusion
 Although product considerations are
extremely important, remember that the
product is only one element of the
marketing mix. Focusing on product
decisions alone, without consideration of
the other marketing mix variables would
be an ineffective approach to marketing
strategy.
Thank you!