ses of product

of product
fa
failure can be ang
divide Development
c a u S e S

t h ecauses
Cundiffand
tiffand
Still, lew Product and Sales Forecasting
to channel pro blems 3.
ormk
These product
present
the 75
According and
prom 1cts and ideal products concept.difference between the existing supply o f
intosixcategores:

2.
distribution

proble mate strength ot ing new products. In

fordeveloping
Firms can
successfully identify the
sessions, a small group of gaps
timing
1.prodict
probléms
problems
5.
trusted with a brainstorming
problem. At the end,
it
encouraged to come up peopie
pricing is
problems
4. solution. witn a
development process in
developmseat

a
series sof steya
competition.

n e w p r o d u e t

dev
2. Idea sereening
Sges
i
planning
and
the
duct
new
developmen
produ
The objective of screening is to
in
Sereening eliminates a number of ideasseparate good ideas for new products.
product
New the stages

SCCessful screening reduces the cost ofobtained

i l l u s t r a t e s

7.2 from the idea

Figure
product generation stage.
Commercialisation development.
Screening systematised. The individuals present ideas ina
is
The format should be simple so that it standard format.
Market format.
encourages people to write up ideas on the
test An idea committee is formed with members
drawn
areas. The committee reviews the ideas. It evaluates from different functional
each idea against a check
Product list, the more atractive ideas are passed on to the
concept testingstage.
development 3. Concept testing
Attractive ideas should be refined into product
is an elaborate version of a product idea. The concept. A product concept
Business product
analysis practical and meaningful consumer terms. Then concept is expressed in
the product concept
toconcept testing. Concept testing determines customer passes on
attitudes before product
development.
Concept
Objectives of concept testing
testing
The following are the
objectives of concept testing.
1. Theconcept testing enables the marketer to know whether the
acceptable to the marketer. concept is
ldea screening
2 The marketer may
present several concepts to the market. Then he may
Idea select the best one as viewed by the
potential buyers.
generation 3. Concept testing will reveal the modifications required to be made in the
product concept prior to product development.
4. The testers will be in a
Figure 7.2-Stages in new product development position to determine the distribution channels,
promotional appeals, pricing or other aspects of the marketing mix.
1.ldeageneration 5. Marketers obtain information on additional uses that an intended
Management must always be on the search for new product ideas, wnica can offer to the product
stomer
buyers.
be developed into a product later. New product ideas come from hnigd
dealers, employees, competitors and top management. A number of tech u
6. Finally, market testing will help identify the target market for the proposed
researd
product.
may be employed to market
4. Business analysis
generate new ideas.
brain storming etc., are some
User-stimulus strategy,
important techniques for idea general Business analysis is of utmost importance in any product
development. It
Companies
for good new following unce attractive rewa
user-stimulus strategies, announce S s t u d i s
involves a detailed review of market factors, revenue, costs and trend for a
product ideas. frequents proposed
on consumers, products, Market research groups conduct product pas product. This stage will help in
new
finalising whether a project is
competition, etc. Such studies reveal P
 76
Marketing
business analysis, managem
NewP
Product Development and Sales
Simulated test marketing: In Forecasting
point of view. Through 1.7
viable from the marketing Total sales are estimated On
shoppers are simulated test
projections. the marketing, 30 to 40 qualified
familiarity andchosen.
cost, sales and profit The
can prepare sales; and (ii) repeat sales, After marketer questions
first time sales, (ii) replacement preferences in a specific them about
basis of (i) marketer should estimate expected costs
preparing the sales forecast, the & manufacturing, marketing and financ and shoppers are exposed to some product category. Thenbrand
profits. Costs are
estimated by the R D,
of the
nce advertisements. One of these
advertisements wil be about a new product. such
estimates the number of units proposed neu
new to buy the brand
they like. The Consumers are given money
departments. Management
sell to break-even with the given cost structure. consumers buy the company notes down how many
product the company should new brand and
competing brands respectively.
5. Produet development Controlled test marketing: A research firm
concept needs to be that will carry new manages apanel of stores
Having passed the business analysis test, hasproduct
the products for a fee. The
research firm delivers the
developed into a physical product. Till then,
it existed only as a prototype. products to the
participating stores. Then sales
At this stage, the product concept is transformed
into a commercially feasible Controlled test marketing helps the
results
firm to test the measured.
are

product. Product development involves the use of quality function deployment factors and limited advertising on impact of in-store
(QFD). Customer attributes generated through market research
are transformed consumers can be interviewed later tobuying behaviour. A sample of
give their
into engineering attributes. Prototypes are then produced. They must be put product. impressions about the
thorough rigorous functional test. Consumers are given samples to use in their d) Test markets: The last step to test a new
homes. Focus groups, target market surveys and other market research techniques into a full pledged test market. The consumer product is to putit
render marketer additional information to the marketer. advertising and promotioncompany
plan a full selects a few cities and
campaign. The market tests
6. Market test last anywhere from a few months to a may
year.
In the words of Kotler, test marketing is the stage at which the product and 7.Commercialisation
into more realistic market setting. In testing
marketing programme introduced
are
After successful completion of test marketing, the
consumer sales-wave research, simulated test marketing,
products, controlled product in its target markets. It is known company introduces its
test marketing and test markets are
used. commercialisation.
as
With
commercialisation, the new product starts its introductory stage of
cycle. product life
Market testing Product Life Cycle
product passes through certain distinct stages during its life. The
A
include introduction, growth, maturity and decline. stages
The time period required for
the product to move
through all the stages is the product's life. The product life
cycle concept was popularised by Theodore Levitt in 1965.
Simulated test Test markets Features of product lifecycle
Sales wave Controlled test
research marketing marketing 1. Products have a limited life.
2 Products pass through introduction,
Figure 7.3-Methods ofmarket testing growth, maturity and decline stages.
Each poses different
challenges and opportunities to the marketer.
(a) Sales wave research: Under sales wave research, consumers try the Profits rise and fall at different stages of the product life cycle.
product but at no cost. The same consumers are reoffered company s 4.
product at reduced prices. The company studies how many custome
Products require different strategies in each stage of their life cycle.
repurchase the product and their reported level of satisfaction. dal n e product life cycle is normally presented as a sales curve spanningthe
course from introduction to decline.
wave
research may also be employed to study the impact ofadverus
on repurchase.