Steps in development of new product 1.

Idea Generation: The first stage in new product development involves generation of new product ideas. New product ideas can be generation by: -conducting marketing research. -Inviting suggestions from consumers. -Inviting suggestions from sales force and other employees. -Internal research work done by R&D department. -Brainstorming ideas for new products. -Screening new products offered by competitions for further improved versions. -Shopping in different markets including international ones for new ideas. -Obtaining feedback from agents or dealers regarding services offered by competitors. 2. Idea Screening: Critical appraisal of ideas occurs at this stage. This is required to weed out or reject not so feasible ideas. A firm may set up an idea committee to review and screen the ideas. The idea committee may sort the ideas into three groups: promising ideas, marginal ideas and rejects. Each promising idea is further screened or researched. The idea committee may seek answer to basic questions, while screening the promising ideas: -Is there a need to introduce a new product? -can the existing set-up or resources handle the new product? -When will it be possible to achieve break even? 3. Concept Testing: At this stage product concept is tested. A product concept is different from product idea. A product ides is a possible is an elaborate version of the idea expressed in meaningful consumer terms. In concept testing, the following questions need to be answered: -Who will use this product? -what main benefit should the product provide? -When and how often the consumers will use the product? -What would be the impact on the profitability of the firm? For instance, a product idea may be to introduce a new health drink with high nutritional value and taste. The product concept can be interpreted in several ways such as: -Concept 1: An instant breakfast drink for the whole family. - Concept 2: A health supplement to people recovering from illness. - Concept 3: A health drink for growing children. 4. Business Analysis: Several vital decisions regarding new product development are taken at this stage. Each idea which comes out of the concept testing stage is analysed in terms of demand, cost, and profit potential. 5. Detailed Engineering Design: This stage involves a series of engineering activities to develop a design of the product. The design team must consider the essentials of a good design such as: -Product functionability. -Aesthetics -Reliability -Reparability. Etc. 6. Product Development:

Product ideas that survive the business analysis stage are transformed into actual product development. Prior to actual production, information must be gathered to decide whether to start, postpone, or drop further development. If it is decided to start the development of the new product, the manufacturing department plans for material procurement prepares a final plan for introducing the product in the market. 7. Test Marketing: Test marketing refers to testing the actual product in one or two test markets on a relatively smaller scale. Testing not be confined to just one city or market. Testing in two or more cities provides an opportunity to measure consumer response to different marketing mixes. In one test city, a particular marketing mix can be offered, and in another test city, another marketing mixes. Test marketing is an experiment that has to be carefully handled. The results must be closely monitored and scrutinized. 8. Commercialization: If the test results are positive, the marketer can go ahead with the production and marketing on a larger scale in a number of potential markets. However. If the test results are negative the idea of commercial production and marketing of product is to be dropped. 9. Product Use and Support: The product managers must consider product support to the users. Normally product support system may include: -Educating the users on specific application of the product. -Providing warranty and repair services. 10. Product Evaluation and Improvement: After the product is launched in the market, there is a need for constant evaluation and improvement. The marketing manager may analyse the reactions of the consumers, dealers and competitions in the market.

Characteristics of a product The following are the essential characteristics to make product more effective: 1. Functions: A product must be designed to meet the needs and wants of the customer. If the product design does not function as per the needs and wants of target customer, then it will not sell in the market. For instance, if the target customers expect light and compact AC that can provide instant cooling, than the product should be designed accordingly. If the AC is only light and compact and does not provide instant cooling, then the target customer would not prefer it. 2. Reparability: The product design should be such that it can be easily repairable. Customers are concerned not only of product s breakdown but also about the elapsed time before product/service is restored. Therefore, theproduct design should be such that it can be easily repaired without much loss of time. 3. Reliability: It refers to the dependability of the product. Customers expect trouble free service. Reliability becomes more important to customers as downtime (due to breakdown) and maintenance is expensive. Customers of durables and office equipment expect least breakdowns or failure rate. Therefore the product should be so designed to provide reliability of performance. 4. Aesthetics: It refers to the philosophy of beauty. It is clearly a matter of personal judgment and a reflection of individual preferences. However, there appears to be some uniformity in consumer rankings of products on the basis of

aesthetics. Therefore the products should be so designed to give an aesthetic appeal. For instance, motor-bikes for young adults are so designed to give a good aesthetic feel, and not just fuel efficiency. 5. Durability: It is a measure of product s jife. Typically durability can be defined as the amount of use gets from a product before it physically deteriorates. In developing countries like India, people do prefer products having longer durability. Therefore, product designers should consider the durability factor. 6. Producibility: The product should be so designed that it can be produced easily at a minimum manufacturing cost. A product should have least number of operations without affecting its functionability. Wherever possible, work content on the product should be reduced, so that it can be produced quickly an economically. d 7. Simplicity: The product should be simple in design. The simpler the design the easier it is to produce and operate. The simpler products are also economical and reliable. 8. Compact: A product should be compact and lighter in weight. For instance if the product is of room size it must be designed at desk size and if it is of desk size, it must be further be designed smaller as in the case of computer i.e., from room size in 1950s to laptops in 1990s. However, there are also certain exceptions. Some customers prefer large-size items as in the case of projection TVs or luxury cars. It is to be noted that at times, the whole product may not be miniaturized but some of its parts may be reduced in size.