New Product Devt

Embed Size (px)

Citation preview

  • 8/6/2019 New Product Devt

    1/12

    UNIT I

    New Product Development

  • 8/6/2019 New Product Devt

    2/12

    Causes of New Product

    Failures

    Overestimation of Market Size Product Design Problems

    Product Incorrectly Positioned, Priced or Advertised

    Costs of Product Developmenta

    Competitive Actions

    To create successful new products, the companymust:

    understand its customers, markets and competitors develop products that deliver superior value to

    customers.

  • 8/6/2019 New Product Devt

    3/12

    New Product Development

    Process

    Idea Generation

    Idea Screening Concept Development and Testing

    Marketing Strategy

    Business Analysis

    Product Development

    Test Marketing

    Commercialization

  • 8/6/2019 New Product Devt

    4/12

    New Product Development ProcessStep 1. Idea Generation

    New Product Development ProcessStep 1. Idea Generation

    Systematic Search for New ProductIdeas

    Internal sources

    Customers

    Competitors

    Distributors

    Suppliers

  • 8/6/2019 New Product Devt

    5/12

    Process to spot good ideas and drop poor ones

    Criteria

    Market Size Product Price

    Development Time & Costs

    Manufacturing Costs

    New Product Development ProcessStep 2. Idea Screening

    New Product Development ProcessStep 2. Idea Screening

  • 8/6/2019 New Product Devt

    6/12

    New Product Development ProcessStep 3. Concept Development & Testing

    New Product Development ProcessStep 3. Concept Development & Testing

    1. Develop Product Ideas intoAlternative

    Product Concepts

    2. Concept Testing - Test theProduct Concepts with Groups

    of Target Customers

    3. Choose the Best One

  • 8/6/2019 New Product Devt

    7/12

    New Product Development ProcessStep 4. Marketing Strategy Development

    New Product Development ProcessStep 4. Marketing Strategy Development

    Part Two - Short-Term:Products Planned Price

    DistributionMarketing Budget

    Part Two - Short-Term:Products Planned Price

    DistributionMarketing Budget

    Part Three - Long-Term:Sales & Profit Goals

    Marketing Mix Strategy

    Part Three - Long-Term:Sales & Profit Goals

    Marketing Mix Strategy

    Marketing Strategy Statement Formulation

    Part One - Overall:Target Market

    Planned Product Positioning

    Sales & Profit GoalsMarket Share

    Part One - Overall:Target Market

    Planned Product Positioning

    Sales & Profit GoalsMarket Share

  • 8/6/2019 New Product Devt

    8/12

    New Product Development ProcessStep 5. Business Analysis

    Step 6. Product Development

    New Product Development ProcessStep 5. Business Analysis

    Step 6. Product Development

    Business Analysis

    Review of Product Sales, Costs,

    and Profits Projections to See ifThey Meet Company Objectives

    If Yes, Move to

    Product Development

    If No, Eliminate

    Product Concept

  • 8/6/2019 New Product Devt

    9/12

    New Product Development ProcessStep 7. Test Marketing

    New Product Development ProcessStep 7. Test Marketing

    StandardTest Market

    Full marketing campaign

    in a small number ofrepresentative cities.

    StandardTest Market

    Full marketing campaign

    in a small number ofrepresentative cities.

    SimulatedTest Market

    Test in a simulatedshopping environment

    to a sample ofconsumers.

    SimulatedTest Market

    Test in a simulatedshopping environment

    to a sample ofconsumers.

    ControlledTest Market

    A few stores that have

    agreed to carry newProducts.

    ControlledTest Market

    A few stores that have

    agreed to carry newProducts.

  • 8/6/2019 New Product Devt

    10/12

    Characteristics of

    Services intangibilityintangibility: difficult to sample and to evaluate inseparability:inseparability: difficult to separate services from the

    service provider; mainly direct sales; staff are essential tothe delivery of quality services

    heterogeneityheterogeneity: virtually every service is different; verydifficult to standardize quality

    perishabilityperishability:: those not sold can not be stored

    fluctuating demand:fluctuating demand: demand for some services

    fluctuates by season, or even by time of day.

  • 8/6/2019 New Product Devt

    11/12

    Physical goods Vs Services

    Physical Goods

    Tangible

    Homogeneous Production and

    distribution areseparated from

    consumption.

    Services

    Intangible

    Heterogeneous Production,

    Distribution andconsumption are

    simultaneous process

  • 8/6/2019 New Product Devt

    12/12

    Physical goods Vs Services

    A thing

    Core value produced infactory.

    Consumers do notparticipate in theproduction process.

    Can be kept in thestock.

    Transfer of ownership

    An activity or process.

    Core value produced inbuyer-seller

    interactions. Customers participate

    in the production.

    Can not be kept instock.

    No transfer ofownership