lecture # 9 - npd & plc
TRANSCRIPT
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8/14/2019 Lecture # 9 - Npd & Plc
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NEW PRODUCT
DEVELOPMENT & PRODUCT
LIFE CYCLE
Newport institute communication & economics Karachi
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CATEGORIES OF NEW PRODUCTS
Six categories of new products in terms of their newness tothe company and to the market place:
New-to-the-world products new products that create an entirely mew market
New product-lines new products that allow a company to enter an established market for
the first time
Additions to existing product-lines new products that supplement a companys established product lines
(package sizes, flavors, so on)
Improvements or revisions to existing products new products that provide improved performance or greater perceived
value and replace existing products
Repositioning existing products that are targeted to new markets or new market
segments
Cost reductions
Ch # 9 New Product Dev. & PLC
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NEW PRODUCT DEVELOPMENTthe development of original products, product improvements, product
modifications & new brands
New-product failure nearly 80% of new packaged consumer goods & line extensions fail
nearly 33% of new industrial products fail at launch
New successful products
are unique superior products higher quality, new features & offer higher value
have well-defined concept
by carefully defining and assessing the target markets, productrequirements & benefits
to remain successful companies must continuously develop newproducts - but the odds weigh heavily against success. Thesolution lies in strong new-product planning
Ch # 9 New Product Dev. & PLC
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THE NEW PRODUCT
DEVELOPMENT PROCESS
consists of eight major steps
idea generation
idea screening
concept development & testing marketing strategy
business analysis
product development
test marketing
commercialization
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IDEA GENERATIONsystematic search for new-product ideas
internal sources
customers
competitors distributors
suppliers
others
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NEW PRODUCT DEVELOPMENT
PROCESS cont...
Concept development & testing product concept is a detailed version of the new-product idea
stated in meaningful consumer terms
concept development - a new product idea is developed into
alternative product concepts concept testing - calls for testing new-product concepts with
groups of target customers
Marketing strategy development describe target market
planned product positioning planned sales & market share
& profit goals for first few years
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NEW PRODUCT DEVELOPMENT
PROCESS cont...
Business analysis
a review of the sales, costs & profit projections for a
new product to find out whether these factors satisfy
the companys objectives sales forecast
estimation of costs & profits
Product development
Test marketing - in realistic market setting
Commercialization (launch)
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PRODUCT LIFE-CYCLE (PLC)has five distinct stages in sales history
Product development
A period of slow sales growth as the product is introduced in the market
Introduction
Profits are non-existent in this stage because of heavy expenses ofproduct introduction
Growth
A period of rapid market acceptance and substantial profit improvement
Maturity
A period of slowdown in sales growth because the product has achievedacceptance by most potential buyers. Profits stabilize or even decline
because of increased marketing outlays to defend the product againstcompetition
Decline
The period when sales show a downward drift and profits erode
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IMPLICATIONS OF A PRODUCTS
LIFE CYCLE STAGE
Product life cycle asserts four things: Products have limited life
Product sales pass through distinct stages, each posing different
challenges to the seller
Profits rise and fall at different stages of the product life cycle
Products require different marketing, financial, manufacturing,
purchasing and personnel strategies in each stage of their life
cycle
any products current PLC position thereforesuggests the best marketing strategies
Ch # 9 New Product Dev. & PLC