Product development

Prof. Jogendra nayak

Product • Core : generic product eg. A forklift • Tangible: physical addition or deletion • Augmented: additional benefits .

shape etc are important Protective and promotional Only product’s brand name Less time Less complex network of brand beliefs Consumption 80% or more Not important Mostly protective Product and company brand name Long time. occasionally customized Very important Specifications Designed to specifications Aesthetics Packaging Branding Time for brand building Support/assurance Product uses New product failure rate Colour. at times overshadowed by price or promotion General.Factor Consumer Industrial Product quality Important . satisfactiory association is required Involves more complex network of relationships beyond pro Production 30-40% Innovation adoption Depends on the innovativeness of consumer and competitor Depends on the innovativeness of buying firm as well as that of its consumers and competitors .

Improvements/revisions to existing products: helps in replacing existing ones 4. Allen & Hamilton 1. Addition to existing product lines: supplements existing ones 5.New industrial product Booz. New product lines: help a co. Cost reductions: similar performance at lesser costs 6. to enter into an established market 2. New to the world products 3. Repositioning: existing products targeted to new markets .

Product line strategies • • • • • • Reaction to competition Market gaps Image Pressure of sales people Capacity utilization Desire of top mgt .

of companies citing 7 6 6 5 5 4 4 2 2 Uncompetitive price Production problems Not mass product. uneconomic batches Too costly to produce and market High costs to manufacture Overengineered Competitors dominated the market Customers requirement not as expected Low selling price .Causes of poor product performance Reasons • • • • • • • • • no.

payback period. ROI. . MARKET SIZE Present size. amount of competition. PRODUCT / TECHNOLOGY CRITERIA – Degree of innovation. growth potential. competing technologies C. lead time. present channels suitable.PRODUCT EVALUATION CRITERIA A. expected cash flow. profit/sales ratio. variety of end uses known. technical service required. estimated product life cycle. patentable product/processes. FINANCIAL CRITERIA • Initial investment. technical feasibility. B.

PLC Strategy/ob jective 1 2 3 4 5 Minimize learning requirements develop widespread brand awareness Limited models Establish strong market position Maintain/ strengthen market niche Defend position against competition Milk the offer dry Product strategy Design to facilitate new segment and new use systems Intensify product development Alert for cost improvemen t. penetration pricing Defensive pricing Prune line of items not returning profits Price High trade discounts Aggressive promotional pricing strategy Strengthen brand preference Intensive/ rapid resupply of distributors Broaden promotional pricing strategy Strengthen dealer ties Intensive/ extensive/ keep dealers well supplied at min. Phase out Phase out . inventory Maintenanc e pricing Promotiona l strategy Distributio n Create awareness Exclusive/ selective/ high distributor margins Maintain trade loyalty Intensive/ extensive/ keep dealers well supplied at min.

STAGES IN THE NPD • • • • • • • • Idea generation idea evaluation concept development marketing strategy business analysis sales estimation Test marketing prototype development .

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