Md. Hassan Kawsar

New Product Strategy

A new product strategy involves the decision making regarding –

• What product to produce

• How product should be modified

• When to discontinue

Product strategy consists of –

• Deciding how to position of a business unit for the product offeringto serve its target market.

• Selecting strategic objectives for the product offering.

• Selecting a branding strategy.

• Developing and implementing a management strategy for new andexisting product.

New Product Planning Process

• Customers need analysis

• Idea generation

• Screening and evaluation

• Business analysis

• Product development

• Marketing strategy development

• Test marketing

• Launching the product

Sources of New Product Ideas

Internal Sources

• Research & Development

• Marketing

• Employee suggestion

• Others

External Sources

• Consumers

• Competition

• Inventors & Patents

• Acquisition

• Others

Evaluation

Commercialization

Development

Testing

Strategic Option for a New Product

Strategic Option

• Establish product performance objectives

• Product review system

• Identification of problems of products

• Strategy for eliminating the problems

Strategy for Improving Product Performance

A) Product line strategy

• Add new products

• Eliminate specific products

• Cost reduction

• Product improvement

• After marketing strategy

B) Product mix strategy

• Add new product lines

• Delete product lines

• Change product lines strategy

C) Distribution strategy

• Deciding how to reach end user target market

• If use intermediaries, selecting their role that they are in thechannel network

Factors affecting distribution strategy

Distribution to the end user -

• End user consideration

• Product characteristics

• Financial & control consideration

Channel of distribution strategy

• Type of channel arrangement

• Distribution intensity (+ is exclusive distribution, ++++ is selectivedistribution & ++++++ is intensive distribution)

• Channel configuration

Distribution network

• Manufacturer

• Distributor / Whole seller

• Retailers / Dealers

• End user

Formulation price strategy

• High Active Price Strategy

• Low Active Price Strategy

• High Passive Price Strategy

• Low Passive Price Strategy

D) Price strategy

• Target market and objective

• Products strategy

• Distribution strategy

• Promotion strategy

Steps in developing sales force strategy

• Describe & analyses the people & organization to be contacted bythe sales force.

• Decide the role of sales force.

• Set their objective.

• Determine the size & deployment of sales force.

• Recruit, train & manage the sales force.

E) Promotion strategy

• Market target and marketing program positioning strategy

• Communication strategy

• Establish mix of communication components

• Advertising strategy

• Sales promotion strategy

• Sales force strategy

Product market analysis

• Market size (cost-volume relationship)

• What target market strategy is to be used?

• Price elasticity

• Importance of non-price factors

• Sales forecasts

Pricing objectives

• Pricing for results (performance)

• Market penetration

• Promotional

• Avoid government intervention