S S JONDHALE INSTITUTE OF MANAGEMENT

SCIENCE AND RESEARCH

PROJECT

SUBMITTED TO
Mrs .Rachel

PROJECT BY
- Vishal R Puli

PROJECT AS PART OF MMS FIRST YEAR 2009-10

FOR MARKETING MANAGEMENT

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 PREFACE

THIS PROJECT “NEW PRODUCT DEVELOPMENT PROCESS” IS DONE

TO MAKE US EXPLAIN IN DETAIL HOW ACTUALLY A PRODUCT

WE SEE DAY TO DAY COMES IN TO THE MARKET.

THE VARIOUS STAGES INVOLVED RIGHT FROM THE

CONCEPTION OF IDEA TILL IT IS COMMERCIALIZED.

THIS PROJECT HAS BEEN MADE FROM AUTHENTIC AND VALID

SOURCES AVAILABLE .

ANY FEEDBACKS OR INPUTS TO THIS PROJECT IS ALWAYS

WELCOMED.

- Vishal R Puli

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 ACKNOWLEDGMENT

I WOULD LIKE TO THANK MY COLLEGE , OUR MADAM MRS RACHEL

FOR CONSIDERING ME WORTHY ENOUGH AND GIVING ME THIS

OPPORTUNITY TO PRESENT THIS TOPIC.

I WOULD ALSO LIKE TO THANK MY PARENTS FOR SUPPORTING ME.

ATLAST BUT MOST IMPORTANTLY I WOULD LIKE TO THANK MY

ALMIGHTY GOD FOR HELPING US IN THIS PROJECT.

-Vishal R Puli

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 TABLE OF CONTENTS

PREFACE 2

ACKNOWLEDGEMENT 3

INTRODUCTION 5

IDEA GENERATION 6

IDEA SCREENING 8

CONCEPT DEVELOPMENT AND TESTING 10

BUSSINESS ANALYSIS 12

BETA TESTING AND MARKET TESTING 14

TECHNICAL IMPLEMENTATION 15

COMMERCIALIZATION 16

REFERENCES 17

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 INTRODUCTION

NEW PRODUCT DEVELOPMENT PROCESS OR NPD IS THE PROCESS IN

WHICH A NEW PRODUCT IS INTRODUCED INTO THE MARKET.

IT INVOLVES ALL THE STAGES RIGHT FROM THE CONCEPTION TO

THE COMMERCIALIZATION STAGE.

IT IS DEFINED AS “THE OVERALL PROCESS OF STRATEGY,

ORGANIZATION, CONCEPT GENERATION, PRODUCT AND MARKETING PLAN
CREATION AND EVALUATION, AND COMMERCIALIZATION OF A NEW
PRODUCT”.

ALL THE COMPANIES HAVE TO GO THROUGH THIS PROCESS FOR

DEVELOPING A NEW PRODUCT AND INTRODUCIING IT IN THE
MARKET.ITS MAIN STEPS ARE AS LISTED BELOW.

 IDEA GENERATION

 IDEA SCREENING

 CONCEPT DEVELOPMENT AND TESTING

 BUSSINESS ANALYSIS

 BETA TESTING AND MARKET TESTING

 TECHNICAL IMPLEMENTATION

 COMMERCIALIZATION.

THE SUCCESS OF EACH OF THESE STAGES DEPENDS ON THE

PREVIOUS STAGE.IF WORK AT ANY OF THESE STAGES IS NOT DONE
TO THE MARK THE RESULT OR ERROR CAN BE SHOWN UP IN THE
NEXT LEVEL.LET US SEE IN DETAIL EACH STEP OF THIS PROCESS.

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 IDEA GENERATION

THIS STAGE IS ALSO OFTEN CALLED AS “FUZZY FRONT END”

PROCESS.IDEAS FOR THE NEW PRODUCT IS OBTAINED FROM
BASIC RESEARCH SUCH AS “SWOT ANALYSIS”.

SWOT ANALYSIS IS A STRATEGIC PLANNING METHOD USED TO

EVALUATE THE STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND
THREATS INVOLVED IN A PROJECT OR IN A BUSINESS VENTURE.

IDEA GENERATION OR BRAINSTORMING OF NEW PRODUCT,

SERVICE, OR STORE CONCEPTS - IDEA GENERATION TECHNIQUES
CAN BEGIN WHEN YOU HAVE DONE YOUR OPPORTUNITY ANALYSIS
TO SUPPORT YOUR IDEAS IN THE IDEA SCREENING PHASE.

FOR EG:IF A COMPANY IS PLANNING TO LAUNCH A NEW

PRODUCT SAY A MOBILE SIMCARD IT HAS TO DO FIRST OF

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ALL A SWOT ANALYSIS OF THE PARTICULAR PRODUCT.WHAT IS
GOING TO BE THE STRENGTH OF THE SERVICE.

CAN IT SURVIVE THE ALREADY COMPETITIVE AND STIFF MOBILE

NETWORK MARKET.?IF IT CANNOT SURVIVE WHAT ARE THE
THREATS IT IS GOING TO FACE IN THE FUTURE.WHAT
OPPORTUNITY IS THIS PRODUCT MOBILE SERVICE IS HAVING IN
THE NEAR FUTURE.CAN IT TAP THE POTENTIAL YOUTH AS WELL
AS THE MIDDLE AGE SEGMENT MARKET.ALL THIS THINGS HAVE
TO BE PROPERLY DECIDED UPON AND THEN A PROPER I

DEA FOR THAT PRODUCT ARISES.THIS STAGE IS CALLED AS

“IDEA GENERATION STAGE”.

IDEA SCREENING

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WHEN WE SAY SCREENING,IT REFERS TO THE ACT OF
CHECKING THINGS.HERE IDEA SCREENING REFERS TO REMOVAL
OF UNSOUND OR UNFITTING IDEAS WHICH HAD BEEN
GENERATED IN THE IDEA GENERATION STAGE.

THE PEOPLE WHO WILL BE SCREENING THE IDEA SHOULD

SCREEN THE IDEAS BASED ON ATLAST THREE QUESTIONS
FROM THE FOLLOWING.

1.WILL THE CUSTOMER IN THE TARGET MARKET BENEFIT FROM THE

PRODUCT?

THE IDEA WHICH HAS BEEN CONCEIVED FOR THE

PRODUCT SHOULD BE PRIMARYILY BENEFICIAL FOR THE
CUSTOMER WHICH INTURN WILL BE BENEFICIAL FOR THE
ORGANISATION.

2. WHAT IS THE SIZE AND GROWTH FORECASTS OF THE MARKET

SEGMENT/TARGET MARKET?

IDEA SHOULD BE DEVELOPED IN SUCH A MANNER THAT

THE CUSTOMER BASE SHOULD BE CONTINUALLY INCREASING.IT
SHOULD ALSO ATTRACT ALL THE SEGMENTS OF THE MARKET.

3. WHAT IS THE CURRENT OR EXPECTED COMPETITIVE PRESSURE

FOR THE PRODUCT IDEA?

THE IDEA CONCEIVED SHOULD BE UNIQUE.UNIQUE IN THE

SENSE IT SHOULD BE ABLE TO SUSTAIN THE CURRENT OR ANY
FUTURE COMPETITION.

4. WHAT ARE THE INDUSTRY SALES AND MARKET TRENDS THE

PRODUCT IDEA IS BASED ON?

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 THE IDEA OF THE PRODUCT SHOULD BE BASED ON
A ALREADY SUCCESSFULL AND PROVEN MARKET TRENDS,THIS
WILL HELP US ANALYZE WHAT KIND AND HOW MUCH OF
CUSTIMER BASE CAN WE EXPECT.

5. IS IT TECHNICALLY FEASIBLE TO MANUFACTURE THE PRODUCT?

A FULL SCALE PRODUCTION OF THE PRODUCT

SHOULD BE POSSIBLE AND FEASIBLE AND ECONOMICAL FOR
THE ORGANISATION.

6. WILL THE PRODUCT BE PROFITABLE WHEN MANUFACTURED AND

DELIVERED TO THE CUSTOMER AT THE TARGET PRICE?

THE PRODUCT SHOULD BE AFFORDABLE TO ALL THE

SECTIONS OF MARKET AND USEFULL ALSO AT THE SAMETIME.IT
SHOULD BE A PROFITABLE INVESTMENT FOR THE CUSTOMERS.

CONCEPT DEVELOPMENT AND TESTING

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THE PRODUCT IDEA WHICH WAS FINALISED IN THE IDEA
SCREENING STAGE IS BROUGHT DOWN TO THIS STAGE AND
THIS FURTHER NURTURED UPON.THE IDEA OR THE PRODUCT
CONCEPT IS FURTHER DEVELOPED.

ITS A TWO-PHASE STAGE IN THE DEVELOPMENT OF A NEW

PRODUCT IN WHICH POTENTIAL BUYERS ARE PRESENTED FIRST
WITH THE IDEA OR DESCRIPTION OF THE NEW PRODUCT (CONCEPT
TESTING) AND LATER WITH THE PRODUCT ITSELF IN FINAL OR
PROTOTYPE FORM (PRODUCT TESTING), IN ORDER TO OBTAIN THEIR
REACTION.

THE FEASIBILITY OF THE PRODUCT IS ALSO PROVED BY

PROTOTYPING OR BY COMPUTER AID RENDERING.

“TESTING THE CONCEPT” ITSELF CONSISTS OF TWO METHODS

QUANTITATIVE METHOD AND A QUALITATIVE METHOD.

QUANTITATIVE METHOD - IT TYPICALLY INVOLVES THE

CONSTRUCTION OF QUESTIONNAIRES AND SCALES. PEOPLE WHO
RESPOND (RESPONDENTS) ARE ASKED TO COMPLETE THE SURVEY.
MARKETERS USE THE INFORMATION SO OBTAINED TO UNDERSTAND
THE NEEDS OF INDIVIDUALS IN THE MARKETPLACE, AND TO CREATE
STRATEGIES AND MARKETING PLANS.

QUALITATIVE METHOD - IS A SET OF RESEARCH TECHNIQUES, USED

IN MARKETING AND THE SOCIAL SCIENCES, IN WHICH DATA IS
OBTAINED FROM A RELATIVELY SMALL GROUP OF RESPONDENTS
AND NOT ANALYZED WITH INFERENTIAL STATISTICS.

THE COST IN DEVELOPING THE PRODUCT IS ALSO DEVELOPED

IN THIS STAGE.

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 BUSSINESS ANALYSIS

THIS STAGE DETERMINES THE BUSSINESS ASPECT OF THE NEW

PRODUCT.THE IMPORTANT THING WHICH GETS DECIDED IN THIS
STAGE IS THE SELLING PRICE OF THE PRODUCT.ITS SELLING
PRICE IS DECIDED ON VARIOUS FACTORS SUCH AS
COMPETITION ,CUSTOMER FEEDBACK WHICH HAS BEEN TAKEN
FROM THE PREVIOUS STAGES.

A EFFORT IS ALSO TAKEN IN THIS STAGE TO ASSESS THE

SALES VOLUME BASED UPON THE SIZE OF MARKET AND SOME
TOOLS.

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 ONE OF THE TOOLS IS DETERMINING IS THE “FOURT-WOODLOCK
EQUATION”.

FOURT-WOODLOCK EQUATION

THE FOURT-WOODLOCK EQUATION (SOMETIMES MISSPELLED FORT-

WOODLOCK EQUATION) IS A MARKET RESEARCH TOOL TO DESCRIBE
THE TOTAL VOLUME OF CONSUMER PRODUCT PURCHASES PER
YEAR BASED ON HOUSEHOLDS WHICH INITIALLY MAKE TRIAL
PURCHASES OF THE PRODUCT AND THOSE HOUSEHOLDS WHICH
MAKE A REPEAT PURCHASE WITHIN THE FIRST YEAR.

THE FOURT-WOODLOCK EQUATION ITSELF IS

THE LEFT-HAND-SIDE OF THE EQUATION IS THE VOLUME OF PURCHASES

PER UNIT TIME (USUALLY TAKEN TO BE ONE YEAR). ON THE RIGHT-HAND-
SIDE, THE FIRST PARENTHESES DESCRIBES TRIAL VOLUME, AND THE
SECOND DESCRIBES REPEAT VOLUME.

HH IS THE TOTAL NUMBER OF HOUSEHOLDS IN THE GEOGRAPHIC AREA

OF PROJECTION, AND TR ("TRIAL RATE") IS THE PERCENTAGE OF THOSE
HOUSEHOLDS WHICH WILL PURCHASE THE PRODUCT FOR THE FIRST TIME
IN A GIVEN TIME PERIOD. TU ("TRIAL UNITS") IS THE NUMBER OF UNITS
PURCHASED ON THIS FIRST PURCHASE OCCASION. MR IS "MEASURED
REPEAT," OR THE PERCENTAGE OF THOSE WHO TRIED THE PRODUCT
WHO WILL PURCHASE IT AT LEAST ONE MORE TIME WITHIN THE FIRST
YEAR OF THE PRODUCT'S LAUNCH. RR IS THE REPEATS PER REPEATER:
THE NUMBER OF REPEAT PURCHASES WITHIN THAT SAME YEAR. RU IS THE
NUMBER OF REPEAT UNITS PURCHASED ON EACH REPEAT EVENT.

EG:

ASSUMING THE NUMBER OF HOUSEHOLDS “HH” – 100

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THE TRIAL RATE OR NUMBER OF HOUSEHOLD WHICH WILL BUY THE
PRODUCT FOR FIRST TIME “TR”-60

TU-5

MR-30

RR-15

RU-3

SO THE VOLUME OF PURCHASES OR SALES AS GIVEN BY THE

EQUATION

V = (100*60*5)+(100*60*30*15*3)

V=813000

SO EXPECTED VOLUME OF SALES IS 8130000 UNITS.

BETA TESTING AND MARKET TESTING

TWO TYPES OF TESTING TAKES PLACE IN THIS STAGE.ONE TESTING IS

ON THE PRODUCT ITSELF AND ANOTHER ON THE MARKET.

IN BETA TESTING A PHYSICAL PROTOTYPE OF THE PRODUCT IS MADE

AND CHECKED FOR ITS FEASIBILTY.HOW THAT PRODUCT BEHAVES IN
A PARTICLUAR SITUATION OR WHETHER ITS WORKING FINE AS
DESIGNED IN ALL CONDITIONS.

IN MARKETING TESTING SURVEYS REGARDING THE PARTICULAR

PRODUCT IS DONE ON FOCUS GROUPS.CUSTOMERS ARE
INTERVIEWED TO CHECK OUT IF THEY LIKED THE PRODUCT AND DO
THE NECESSARY KIND OF ADJUSTMENTS.

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A INITIAL RUN UP OF THE PRODUCT IS DONE TO CHECK OUT
CUSTOMER ACCEPTANCE BUT ONLY ON A TEST MARKET.

TECHNICAL IMPLEMENTATION

THIS STAGE INCLUDES INVOLVES IMPLEMENTING OR

MANUFACTURING THE PRODUCT.

THE STEPS INVOLVED IN THIS IS ARE

 NEW PROGRAM INITIATION

THE PROCESS IS STARTED FOR MAKING OR IMPLEMENTING

THE PRODUCT.

 RESOURCE ESTIMATION

THE REQUIRED HUMAN RESOURCE,RAW MATERIALS AND

OTHER RESOURCES ARE IDENTIFIED IN THIS STAGE.

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  SUPPLIER COLLABORATION

THE SUPPLIER FOR RAW MATERIALS AND OTHER

MACHINERY IS IDENTIFIED AND FINALISED IN THIS.

 LOGISTICS PLAN

THE MANAGEMENT OF FLOW OF

GOODS,INVENTORY,PEOPLE FROM THE POINT OF ORIGIN
AND THE POINT OF CONSUMER IS CHALKED OUT IN THIS.

 PROGRAM REVIEW AND MONITORING

A PLAN FOR TRACKING EACH AND EVERY THING IN THE

THIS IMPLEMENTATION IS MADE HERE.PROPER
SUPERVISION IS PUT AT EVERY STAGE.

 CONTINGENCY PLANNING-WHAT IF

A ALTERNATIVE OR BACK UP PLAN IS DESIGNED HERE.WHICH

CAN BE PUT IN PLACE IF THE CURRENT PLAN ENCOUNTERS
ANY PROBLEMS OR DOESNT GIVE RESULTS.

COMMERCIALIZATION

THE LAST STAGE IN NEW PRODUCT DEVELOPMENT IS

COMMERCIALIZATION.THE PRODUCT IS LAUNCHED.ADVERTISEMENTS
AND PROMOTIONS ARE PLACED REGARDING THE PRODUCT.IT IS
FINALLY MADE AVAILABLE TO THE MARKET.

THE PRODUCT IS PASSED THROUGH THE PROPER DISTRIBUTION

CHANNEL SO TO REACH PROPERLY TO THE MARKET.

CRITICAL PATH ANALYSIS IS NECESSARY FOR DECIDING THE PROPER

CHANNEL.

CRITICAL PATH ANALYSIS

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THE CRITICAL PATH METHOD (CPM) OR CRITICAL PATH ANALYSIS, IS A
MATHEMATICALLY BASED ALGORITHM FOR SCHEDULING A SET OF
PROJECT ACTIVITIES. IT IS AN IMPORTANT TOOL FOR EFFECTIVE PROJECT
MANAGEMENT.

REFERENCES

HTTP://EN.WIKIPEDIA.ORG/WIKI/SWOT_ANALYSIS

HTTP://WWW.COOLAVENUES.COM/KNOW/MKTG/CC.PHP3

HTTP://EN.WIKIPEDIA.ORG/WIKI/CONCEPT_TESTING

HTTP://WWW.ENTREPRENEUR.COM/ENCYCLOPEDIA/TERM/82414.HTML

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