development of new product
TRANSCRIPT
Development of
New Product
New product development (NDP) NDP is a process which
designed to develop, test and consider the viability of products which are new to the market in order to ensure the Growth or survival of the organisation.
New Product Importance
Company . . .
Sales Revenue
Replace “fading products”
Spread Risk Innovate or Die
Societal . . .
Create jobs Increase standard of
living
Increase competition
Categories of New Products
Creates New Market with Radically New Product or Product Line.
Enters Existing But Not Previously Targeted Market with New-Product or Product Line.
Stays in Existing and Previously Targeted Market by Enhancing Existing Product or Product Line.
The New-Product PLANNING PROCESS
2. IDEASCREENING
3. Concept Development &
Testing
4. BUSINESSANALYSIS
5. PRODUCTDEVELOPMENT
1. IDEAGENERATION
7. COMMERCIALIZATION6. TEST
MARKETING
IdeasIdeas
Idea
sIdeas
Ideas
Product idea
Principle: Set the climate for innovation
Internal sources
Customers
Competitors
Distributors
Suppliers
Sources of Product Ideas
Step 1. Idea Generation: An ongoing search for product ideas
to be consistent with target market needs and the organization’s goals
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.
Step 3. Concept Development & Testing
1. Develop Product Ideas into Alternative
Product Concepts
1. Develop Product Ideas into Alternative
Product Concepts
2. Concept Testing - Test theProduct Concepts with Groups
of Target Customers
2. Concept Testing - Test theProduct Concepts with Groups
of Target Customers
3. Choose the Best One3. Choose the Best One
Step 4. Business AnalysisStep 5. Product Development
Business Analysis
Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives
Business Analysis
Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives
If Yes, Move to Product Development
If Yes, Move to Product Development
If No, Eliminate Product Concept
If No, Eliminate Product Concept
Step 6. Test Marketing
StandardTest Market
Full marketing campaignin a small number of representative cities.
StandardTest Market
Full marketing campaignin a small number of representative cities.
SimulatedTest Market
Test in a simulated shopping environment
to a sample of consumers.
SimulatedTest Market
Test in a simulated shopping environment
to a sample of consumers.
Controlled Test Market
A few stores that have agreed to carry newproducts for a fee.
Controlled Test Market
A few stores that have agreed to carry newproducts for a fee.
Step7.Commercialization Stage
Offer the product with commitments of full scale resources and effort
Decisions:Timing -When? Seasonal influences?)Geographical strategy -Where? Weather?Target marketsMarketing mix strategies (4p’s)
Causes of New Product Failures
Overestimation of Market Size.
Product Design Problems.
Product Incorrectly Positioned, Priced or Advertised.
Costs of Product Development.
Competitive Actions.
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