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    ASSIGNMENT

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    New Product Development Strategy

    In business new product development (NPD) is the complete process of bringing a new product to

    market. A product is a set of benefits offered for exchange and can be tangible (that is, something

    physical you can touch) or intangible (like a service, experience, or belief).

    Key Steps in New Product Development

    i. Idea Generation

    ii. Product Screening

    iii. Concept Testing

    iv. Business & Financial Analysis

    v. Product Development

    vi. Test Marketing

    vii. Commercialization

    i. Idea Generation

    The first step in product development is the generation of as many new product ideas as possible.

    Idea generation is a continuous, systematic search for new product opportunities. It involves

    delineating sources of new ideas and methods for generating them. The important sources of new

    product ideas are companys market research facility, customers, competitors, scientists and

    technocrats, research and educational institutions etc..

    Example : The idea of touch screen mobiles

    Ideas for new products can be obtained from basic research using aSWOT analysis(Strengths,

    Weaknesses, Opportunities & Threats). Market and consumer trends,

    company'sR&Ddepartment, competitors, focus groups, employees, salespeople, corporate

    spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits)

    may also be used to get an insight into new product lines or product features.

    Lots of ideas are generated about the new product. Out of these ideas many are implemented.

    The ideas are generated in many forms. Many reasons are responsible for generation of an idea.

    Methods for Generating Ideas

    Dimensional Analysis lists all of the physical characteristics of a product type. Having obtained such

    a list, creativity can be triggered by asking questions such as: "Why is the product this way?, "How

    could the product be changed?" or "'What would happen if one or more of the characteristics were

    removed?"

    Problem Analysis is aneed-assessment technique designed to develop an inventory ofconsumerproblems in a particular product or service category and to serve as a basis for new product or

    service ideas.

    http://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/SWOT_analysis
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    Benefit Structure Analysis determines what specific benefits and characteristics are desired by

    consumers within a particular product or service category and identifies perceived deficiencies in

    what is currently provided.

    Scenario Analysis identifies opportunities by capitalizing on projected future environments and

    associated consumer needs.

    ii. Product Screening

    After the firm identifies potential products, it must screen them. In product screening, poor,

    unsuitable, or otherwise unattractive ideas are weeded out from further actions.

    Today, many companies use a new-product screening checklist for preliminary evaluation.

    In it, firms list the new-product attributes considered most important and compare eachidea with those attributes.

    The checklist is standardized and allows ideas to be compared.

    The object is to eliminate unsound concepts prior to devoting resources to them.

    The screeners should ask several questions:

    Will the customer in thetarget marketbenefit from the product?

    What is the size and growth forecasts of the market segment / target market?

    What is the current or expected competitive pressure for the product idea?

    What are the industry sales and market trends the product idea is based on?

    Is it technically feasible to manufacture the product?

    Will the product be profitable when manufactured and delivered to the customer at

    the target price?

    iii. Concept Testing

    Concept testing presents the consumer with a proposed product and measures attitudes and

    intentions at this early stage of development.

    Concept testing is a quick and inexpensive way of measuring consumer enthusiasm. It asks potential

    consumers to react to a picture, written statement, or oral description of a product. This enables a

    firm to determine initial attitudes prior to expensive, time-consuming prototype development.

    Develop the marketing and engineering details

    Investigateintellectual propertyissues and searchpatentdatabases

    Who is the target market and who is the decision maker in the purchasing process?

    What product features must the product incorporate?

    What benefits will the product provide?

    http://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Target_market
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    How will consumers react to the product?

    How will the product be produced most cost effectively?

    Prove feasibility through virtual computer aided rendering and rapid prototyping

    What will it cost to produce it?

    Testing the Conceptby asking a number of prospective customers what they think of the idea -

    usually viaChoice Modelling.

    iv. Business & Financial Analysis

    Business and financial analysis for the remaining product concepts is much more detailed than

    product screening

    Factors considered in business analysis stage :

    Demand projections

    Cost projections

    Competition

    Required investment

    Profitability

    v. Product Development

    Product development converts a product idea into a physical form and identifies a basic marketing

    strategy. It involves product construction, packaging, branding, product positioning, and usage

    testing.

    vi. Test Marketing

    Test marketing involves placing a product for sale in one or more selected areas and observing its

    actual performance under the proposed marketing plan. The purpose is to evaluate the product and

    pretest marketing efforts in a real setting prior to a full-scale introduction. Rather than inquire about

    intentions, test marketing allows actual consumer behavior to be observed. The firm can also learn

    about competitive reactions and the response of channel members.

    Produce a physical prototype or mock-up

    Test the product (and itspackaging) in typical usage situations

    Conduct focus group customer interviews or introduce at trade show

    Make adjustments where necessary

    Produce an initial run of the product and sell it in a test market area to determine customer

    acceptance

    http://en.wikipedia.org/wiki/Concept_testinghttp://en.wikipedia.org/wiki/Concept_testinghttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Choice_Modellinghttp://en.wikipedia.org/wiki/Concept_testing
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    vii. commercialization

    After testing is completed, the firm is ready to introduce the product to its full target market. This is

    commercialization and corresponds to the introductory stage of the product life cycle.

    Commercialization involves implementing a total marketing plan and full production.

    Launch the product

    Produce and placeadvertisementsand otherpromotions

    Fill thedistributionpipeline with product

    Critical path analysisis most useful at this stage

    http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Critical_path_analysishttp://en.wikipedia.org/wiki/Critical_path_analysishttp://en.wikipedia.org/wiki/Critical_path_analysishttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Advertising