presentation1-new product development 2007

8/14/2019 Presentation1-New Product Development 2007

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NEW PRODUCTDEVELOPMENT

By : Tewodros Solomon

March 2010

ANDHRA UNIVERSITYDCMS


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Every company must develop new products which

shape the company's future.

As the customers' tastes and preferences are ever

changing, new product development becomes a

necessity for an organization.


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1)It can acquire patents from other companies.

2) It can buy a license or franchise from other company.

3) The company can buy other companies


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1)The company can develop new products in its own

laboratories.

2)It can contract with independent researchers or new

product development firms to develop specific new

products.


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The process of developing new product

starts from idea generation and ends with

commercialization of the idea that is

changed into physical product


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Idea generation D

R

O

P

Business analysis

Product designing

development

Product testing

REJECT

REJECT

Screening of new

ideas

Product concept

development testing

Future

plans

commercialization

REJECT

REJECT

REJECT

REJECT

MODIFY THE

PRODUCT?YES

NO

YES


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The new product development process

starts with the search for ideas. New

product ideas can come from

interacting with others and using

creativity generating techniques.


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Ideas for new products can come from many

sources like.

customers scientistscompetitors

employeesTop

management


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Evaluate ideas which is useful for the

company.

The process of screening is critical

evaluation of product ideas.

The purpose of screening is to drop the

poor ideas which is incompatible with the

company objectives.

2) Idea screening2) Idea screening


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custom r s tisf ctio

Goodwill Profit

Mark t shar Incr as

sal s


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Concept Development:-This is the process of developing

the concept of the product by measuring the needs of

target customer and their purchase frequency, the gap

level between the new and existing product.

Concept Testing:-Its presenting the product concept to

appropriate target consumers and getting their reactions

.

3) Co pt D v lopm t &T ti3) Co pt D v lopm t &T ti


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Second part:- In this part outlines theplanned price, distribution strategy and

marketing budget.

Third part:- In the last part long run sales &

profit goals& marketing mix strategy over

time.


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In this step efforts are made to establishwhether the new product will be suitable

or not? In business analysis following

three types of estimate are made:-

Busi ss lysis

Estimating

uture sales

Estimating

uture pro itsEstimating

uture cost


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Testing the product to find out whether it is

going to be accepted or not in the market. This

is achieved through test marketing.

The main objective of test marketing for a new

product is to reduce the commercial risk when

it is brought in the market.


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Test Market:-

- Find small no of representative test cities.

- Conduct full marketing program /campaign

Controlled Test:- engaging a number of stores that

will carry the new product for a fee.

Simulated Test:- working with small number ofqualified shoppers by inducing them to buy the new

brand.Sales wave Research:-working with consumers who

initially try the product at low cost. and when the

product is re-offered at slightly reduced prices.


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If the product is found to be suitable as a resultof test marketing, it is ready to be launched inthe market.

In commercializing a new product certaindecisions are very crucial.

A)When to launch - timing of market entry First entry

Parallel entry

Late entry.


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B)Where to launch - Geographic strategy

Single locality

A region

National market

International market


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Therefore, efforts must be made

to develop a unique, superior

product marketed at a reasonable

price in an effective manner.


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presentation1-new product development 2007

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