Transcript Product Development Process

INTRODUCTION
Product development means making a
new product or changes in the size,
design, color, shape, characteristics,
packing etc of the existing product.
Causes of Product Failures
• Overestimation of Market Size
• Product Design Problems
• Product Incorrectly Positioned, Priced or
Advertised
• Costs of Product Development
• Competitive Actions
To create successful new
products, the company must:
 understand it’s customers, markets
and competitors
 develop products that deliver
superior value to customers.
New Product Development
Process
 Idea Generation and Screening
 Concept Development and Testing
 Marketing Strategy
 Business Analysis
 Product Development
 Test Marketing
 Commercialization
New Product Development Process
Step 1. Idea Generation
 Systematic Search for New Product Ideas
 Internal sources
 Customers
 Competitors
 Distributors
 Suppliers
New Product Development Process
Step 2. Idea Screening
 Process to spot good ideas and drop poor
ones
 Criteria





Market Size
Product Price
Development Time & Costs
Manufacturing Costs
Rate of Return
New Product Development Process
Step 3. Concept Development & Testing
1. Develop Product Ideas into
Alternative
Product Concepts
2. Concept Testing - Test the
Product Concepts with
Groups
of Target Customers
3. Choose the Best One
New Product Development Process
Step 4. Marketing Strategy Development
Part One - Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
Part Two - Short-Term:
Product’s Planned Price
Distribution
Marketing Budget
Part Three - Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
New Product Development Process
Step 5. Business Analysis
Step 6. Product Development
Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
If No, Eliminate
Product Concept
If Yes, Move to
Product
Development
New Product Development Process
Step 7. Test Marketing
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Simulated
Test Market
Test in a simulated
shopping
environment
to a sample of
consumers.
Controlled
Test Market
A few stores that
have
agreed to carry
new
products for a
fee.
STEP 8: COMMERCIALISATION
At this stage the company takes decision to go in for large
scale production & marketing of the new product. Various
marketing strategies are employed by the company at this
stage, when it starts commercialization of a new product idea.
The important factors to which strategists should focus
here are:
 Market entry timing period.
 Whether to lunch the product in a single locality, a region,
several regions, nationally or internationally, i.e. geographic
strategy.
 To whom the new product should target for i.e. targeting &
segmenting.
CONCLUSION
Every year millions of rupees are being spent on
R&D for new products development. Such a huge
investment is necessary as new products are the only
means of survival of a firm.
New product development provides a number of
advantages to the enterprise.
It helps in producing goods & services of best quality.
It helps in providing maximum customer satisfaction,
because it is developed in the view of customer
specification.
It helps in expanding the market of the products of the
enterprise.
It helps in achieving stability in product demand.
Thank You