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Contents
1 Introduction .......................................................................................................................................... 3
2 What is Product Development .............................................................................................................. 3
3 Stages of Product Development or Product Development Process ..................................................... 3
3.1 Concept: ........................................................................................................................................ 3
3.2 Investigation: ................................................................................................................................ 4
3.3 Development................................................................................................................................. 4
3.4 Shipping: ....................................................................................................................................... 4
3.5 Support: ........................................................................................................................................ 4
4 Stake Holders of Product ...................................................................................................................... 4
5 Marketing the Strategies ...................................................................................................................... 5
5.1 The Marketing Mix 4 P's Model .................................................................................................... 5
5.2 Product Life Cycle Model .............................................................................................................. 6
5.2.1 Product Development ........................................................................................................... 6
5.2.2 Product Introduction............................................................................................................. 7
5.2.3 Growth Phase ........................................................................................................................ 7
5.2.4 Maturity Phase ...................................................................................................................... 8
5.2.5 Decline Phase ........................................................................................................................ 8
5.3 Strategies of Product life Cycle ..................................................................................................... 9
5.4 Explain the Crossing the Chasm .................................................................................................. 10
6 Product Life Cycle Requirement Management ................................................................................... 12
7 Reference ............................................................................................................................................ 12
1 Introduction
All products and services have certain life cycles. The life cycle refers to the period from the
product’s first lunch into the market until its final withdrawal and it is up in phases. Increase in the
profit is the major goal of a company that introduces a product into a market its position in the
market compared to competitors, and the product’s success or failure.
We cannot make a product simply by an idea. One of the main things which all of us should take in
to account is Business from the product which we make. How our product will get business, how
market is react to our product, what is the value added to customer who can tempt to buy our
product. These are some question which we need to answer before going to product development
phase.
Concept or
Investigation Development Shipment Support
Idea
3.1 Concept:
Brainstorming and developing a concept is the first step in product development. Once an idea
is generated, it is important to determine whether there is a market for the product, what the
target market is, and whether the idea will be profitable, as well as whether it is feasible from
an engineering and financial standpoint. Once the product is determined to be feasible, the
idea or concept is tested on a small sample of customers within the target market to see what
their reactions are. This is called prototyping. After prototyping marketing guys visit the
customer, present our product as demo version and get the feedback. The customers who are
all show interest on this product is called “Potential Customers”.
One thing we have to take care is that until unless demo is not accepted by any of customer
product should not go into other phases. It means customer not interested in the Concept of
our product itself.
3.2 Investigation:
Once the Concept is approved investigation start how to do the product, how to make robust,
what are the tools we need to use. How much resource required, what is estimation Etc.,
3.3 Development
Once your developed concept [Prototype] is accepted by customer, it is worth in investing the
product. Development involves the Engineering process Designing, architecting, and testing the
product etc., Ex: Software Development Process
3.4 Shipping:
Once product is developed, it is ready for shipment.
3.5 Support:
In this stage product goes into the maintenance mode.
Another important thing is Time to Market, a very important thing which product maker should
aware. If product which you are going to develop is well ahead of the time that means the
feature, the support which you providing cannot be understood many people which beyond
some point then nobody accept.
Example: Now a day’s MPEG is very much used. If guy start making a product which runs the
MPEG standard where MPEG itself not known by many people or not established in the market
then that product is going to scrap.
Product -- Is the product what consumers want? Consider brand name appeal, packaging, quality,
styling, and warrantees.
Price -- Is the pricing strategy working? Consider competitive products, suggested retail price,
wholesale pricing, cash discounts for volume sales, and other factors that impact on per-unit profit.
Place -- Where is the product being bought by consumers? Consider "Brick and mortar" and
Internet retailers.
Promotion -- How well is marketing working? Consider advertising, public relations, sales force,
and sales promotions.
5.2 Product Life Cycle Model
This describes the natural process by which a new product is introduced, is gradually accepted, sells
well for a while and is then gradually superseded before, potentially, being phased out.
Product Life’s cycle – period usually consists of five major steps or Phases
Product Development
Introduction
Growth
Maturity
Decline
Introduction phase of a product includes the product launch with its requirements to getting it
launch in such a way that it has maximum impact on Sales. This period can be described as a
“Money Sinkhole” compared to the maturity phase of a product.
Distribution: In this phase distribution arrangements are introduced. Having the product in every
counter is very important and is regarded as an impossible challenge. Some companies avoid this
stress by hiring external contractors or outsourcing the entire distribution arrangement. This has
the benefit of testing and important marketing tool such as outsourcing.
Price: Pricing is very important in this phase. For a new product always customer is ready to pay
little high price. So it minimizes the money sinkhole. Generally high, assuming a skim pricing
strategy for a profit margin as early adopters [Please refer below] buy the product and the firm
recoup development costly quickly.
Marketing Strategy
Customer requirements on design, pricing and packaging
Managing the growth stage is essential. A company must not make any mistake by over
committing. This will result into losing customers not finding the product ‘on the self’.
Product: New product features and packaging options, improvement of product quality
Price: Maintained at a high level if demand is high, or reduced to capture the additional customers
Distribution: Distribution becomes more intensive. Trade discounts are minimal if reseller shows a
strong interest in the product.
A company that has achieved its market share goal enjoys the most profitable period, while a
company that falls behind its market share goal, must reconsider its marketing positioning into the
marketplace. Promotion and advertising relocates from the scope of getting new customers, to the
scope of product differentiation in terms of quality and reliability
Product: Modifications are made features and features are added in order to differentiate the
product from competing products that may have been introduced
Price: Possible price reductions in response to competition while avoiding a price war
Distribution: New distribution channels and incentives to resellers in order to avoid losing shelf
space.
Promotion: Emphasis on differentiation and building of brand loyalty. Incentives to get competitors
customers to switch.
Sometimes it is difficult for a company to conceptualize the decline signals of a product. Usually a
product decline is accompanied with a decline of market sales. Its recognition is sometimes hard to
be realized, since marketing departments are usually too optimistic due to big product success
coming from the maturity phase. This is the time to start withdrawing variations of the product
from the market that are weak in their market position. This must be done carefully since it is not
often apparent which product variation brings in the revenues. The prices must be kept competitive
and promotion should be pulled back at a level that will make the product presence visible and at
the same time retain the “loyal” customer.
Product: The number of products in the product line may be reduced. Rejuvenate surviving
products to make them look again new.
Distribution: Distribution becomes more selective. Channels that no longer are profitable are
phased out.
Promotion: Expenditures are lower and aimed at reinforcing brand image for continued products.
5.3 Strategies of Product life Cycle
5.4 Explain the Crossing the Chasm
This is the book written by Geoffrey Moore. It is a bible for marketing guys. Every business is
based on the tradition technology Adoption Life Cycle., a smooth bell curve of high tech
customers, progressing from Innovators, Early Adopters, Early Majority, Late Majority, and finally
Laggards.
In turn, this model becomes the foundation for a high-tech marketing model which says the way
to develop a market is to work the curve from left to right, progressively winning each group of
users, using each "captured" group as a reference for the next.
Early Adopter:
they care about the company they are buying from, the quality of the product they
are buying, the infrastructure of supporting products and system interfaces, and the
reliability of the service they are going to get
It is very difficult to break into a new industry selling to pragmatists. References and
relationships are very important…Pragmatists won't buy from you until you are
established, yet you can't get established until they buy from you
Once a startup has earned its spurs with the pragmatist buyers within a given vertical
market, they tend to be very loyal to it, and even go out of their way to help it succeed.
"Pragmatists are not anxious to reference visionaries in their buying decisions. Hence the
chasm. Four fundamental characteristics of visionaries that alienate pragmatists:
o Lack of respect for colleagues' experiences.
o Taking greater interest in technology than in their industry.
o Failing to recognize the importance of existing product infrastructure.
o Overall disruptiveness.
The chasm is because it difficult convince between the Early Adopter to Early Majority. It is a big
chasm. Because early majority people never ever convinced with simple question and answers.
Late Majority: Skeptical People, will use new ideas or products only when the majority is using it.
Laggards: Traditional people, caring for the old days, are critical towards new ideas and will only accept
if the new idea has become main stream or even tradition.
6 Product Life Cycle Requirement Management
7 Reference
Crossing the Chasm by Geoffrey Moore