Juan Felipe Bejarano Cerón

Juan Camilo Cuellar Salgado

New-Product Development Process

The process of launching a new product start way before the actual launch. The company
have to do 7 “steps” before the launch. The first one is the generation of the idea, in this
step is where the New product is created; in the particular case of our company, they launch
a new product called “Donitas” so for that the first step was the generation of the idea in
this case is create other use for the famous chocolate cover of the company.
The second stage is the inspection of the idea inside the company, so in this stage the
company create a focus group to evaluate the previous idea and determine if its accurate
with the needs of the costumers and with the vision and type of products that the company
have. For Ramo, the evaluations that the group made, were that if the new product is
innovating and its not only a new version of an existent product, also if it has an added value
over the competitors’ products.
The third phase is similar to the second one. Not inside the company, but asking the clients
instead. So, for that the company choose a small group of people to evaluate the new
concept, and define if its clear and if it fulfills a necessity or a want that they have. In this
case, Ramo made a tasting test of the product and have a positive evaluation.
The fourth part of the development process of a new product is the business analysis, in
this part the company have to assess whether the product would we profitable. For this
they have to do the segmentation and targeting of the market, the strategy for the
positioning of the product, identification of the competitor, the demand of the product and
things like that. In Ramo this step not vary much, because they should do all that things to
see and understand the market were the new product its going to be. So with the “donitas”
they understand the market that they want to attack, because is very similar to the market
where they already are, so with that they know very well the people that they are targeting.
When the market has been understood, the next step is to transform the idea in a
realization, creating a prototype or limited production, so you could evaluate in an accurate
way al the design and specifications of the product, but also to give something tangible to
the testers. Here Ramo made a small batch with the new product and test the flavor, form,
consistency and other bakery’s characteristics.
Once the product is approved, the commercialization start, and here is where the company
study the prices, the channels of distribution and implement the marketing plan to
positioning the product in the market.

Product life-cycle strategies.

The life-cycle of a product consist in 4 stages: Introduction, Growth, Maturity and Decline.
In the first part od the life-cycle, the marketing strategies are more related with the
promotion and advertising of the product (like we can see in the case of “Donitas” the
publicity right know is on all the social networks and all the media), doing this, the company
hopes that some costumers (early adopters) star to buy the product. This could be by
managing the price of the product, making it low to boost the adoption of the product to as
many people as possible, in the particular case of Ramo they enter the product with a low
price but that price is the price that the product would have in “normal” circumstances,
because making it lower wouldn’t be profitable.
In the growth part, the promotion starts to focus more in expanding the market for the
product, so the companies star to look new segments to attack and sometimes expanding
the product family, like making it in different flavors or sizes. The product “donitas” isn’t
already in this stage, but when it do, the company would make different flavor, or made
them with fillings or something like that.
The best part of the life-cycle of the product is the Maturity phase, because is where the
company start to se all the rewards. So the importance here is to make this phase as long
as possible. For this, the companies usually update the features of the product, make some
price promotions (to compete with the direct rivals), and the advertising is more focus in
encourage the people that never have tried their product. But all this marketing activities
are only a small part of all the things that the company have been doing in the previous
steps.
The Decline stage, is crucial, because as a company, you have to know when is the time to
take off the product of the market, and don’t let it convert in to a cost to the company,
because if you produce it continuously, the sales would go down, so you start to produce
less product, and the cause of that is the ratio cost of production/quantity it going to be
higher, and that’s worst than taking it off the market.

Price
The major price strategy of the company is based on the competition pricing (showed in
the table), with this the company looks for the cheapest and competitive prices. But also it
has a little bit of “every day low price” strategy, because the company search to have
always and in all the products the lowest prices in the market.

Rank/Competitors Submarino Pipiolo Pepitas Gansito

Maximum Price 700 900 1000 800
Medium price 600 800 800 700
Minimum price 500 600 700 700

With this we can see that the price is based on how the competitors make their prices
strategy and make the price of our company lower.

New-Product Strategy
Because of the price strategy that the company have is the competitors-based strategy,
when they launch new products, they focus in two tings, the first one is the price of similar
products (competitors) in the market, and also that the prices have to be low to attract
the consumers, this prices would be in most of the cases the price that the product would
have over the time, because of the fact that they select the lowest prices in comparison
with the competitors, they couldn’t make them lower, because they could lost
profitability.

Product Mix Strategy

The strategy that the company/product use is the Product line pricing, because they take
into account the other products that they have in their line, and make the price
competitive obviously with their competitors but also with their own products.

Price-Adjustment Strategies.
The company, specifically the product an all the bakery products of the company, don’t
have any type of form to do adjustment to the prices of this products.

Price cut or increase

The changes that the company could make are based on the cost of production; related
with the inflation and the cost of their supplies, in this case there would be a increase in
the price. This also could happen if the demand is higher (more benefits). In the case of
our company its unlikely that they cut the price, because of their strategy, they´re looking
always to have the lowest price possible and rentable.

Bibliography
 Duval, J. (2013). Eight simple steps for new product development. Available at:
http://www.wordreference.com/es/en/translation.asp?spen=disponible
 Mind Tools. The product lifecycle, managing your product to maximize success.
Available at: https://www.mindtools.com/pages/article/newSTR_80.htm