Categories of new products: Six categories of new products in terms of their newness to the company and to the market

t 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 new products that provide similar performance at lower cost Issues in new product development: The companies need the development of original products, product improvements, product modifications & new brands on a consistent basis to survive competition but most new products fail. 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, product requirements & benefits To remain successful companies must continuously develop new products - but the odds weigh heavily against success. The solution lies in strong new-product planning Successful new products are the ones;

 that have relative advantage have compatibility with other technology and distribution systems 1. Idea generation: systematic search for new-product ideas - internal sources - customers - competitors - distributors - suppliers - others 2. Idea screening: to spot good ideas and drop poor ones - is the product truly useful to consumers & society - availability of market - does it engage well with companys objectives & strategies - do we have the people, skills & resources to make it succeed - does it deliver more value to customers than competing products - is it easy to advertise and distribute - availability of technology - availability of raw materials - risk exposure, profitability, cost/benefit - government priority - any other factor - CRITICAL SUCCESS FACTOR 3. 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 4. Marketing strategy development describes target market planned product positioning planned sales & market share & profit goals for first few years 5. 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 6. Product development 7. Test marketing - in realistic market setting 8. Commercialization (launch) Introducing new products to the world markets: - Waterfall Model: - Global phased roll out new products tickle down in a cascade like manner. - Sprinkler Model: - Simultaneous worldwide entry. - Growing prominence of universal segments. - Concerns about competitive pre-emption in the foreign markets. The waterfall strategy of segmentation entry is preferable over the sprinkler model when ; 1. The lifecycle of the products is relatively long 2. Non-favorable conditions govern the foreign market, such as: Small foreign markets (compared to home market) Slow growth High fixed cost of entry 3. Weak competitive climate exists in the foreign market, because of such things as Very weak local competitors Competitors willing to cooperate No competitors Superior quality can reduce a customers life-cycle ownership costs, enhancing customer loyalty, repeat buying, and word-of-mouth advertising ISO 9004 suggests the roles that marketing should play: Take the lead in establishing quality requirements for the company by determining customer needs and communicating them throughout the company Translate customers needs into specifications including performance and sensory characteristics, installation configuration, statutory and technical standards, packaging and quality standards Set up an information system to monitor customer satisfaction and dissatisfaction, and feedback such pertinent information to facilitate design and manufacturing changes Develop early warning systems to spot performance problems with new-product

introductions; continuously monitor product performance against quality specifications such as reliability and safety, and track and analyze customer complaints so that corrective action can be taken in design and manufacturing