New Product Offerings

Group Members:
Nosherwan Khawar Nouman Fareed Faizan Ahmed Mobeen Abdul Hamid

Categories of New Products New-to-the-World New Product Lines

Additions
Improvements

Repositionings
Cost reductions
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Categories of New Products

We can identify six categories of new products.
1.

New-to-the world Products : New products that create an entirely new market; like Blackberry. New Product Lines : New products that allow a company to enter an established market for the first time; like Nestle juices. Additions to Existing Product Lines : New products that supplement established product lines; like new package sizes, flavors etc. Improvements and Revisions of Existing Products : New products that provide improved performance or greater perceived value and replace existing products; like new models of lab-tops and desktops.

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3.

4.

Categories of New Products

5.

Repositionings : Existing products that are targeted to new markets or market segments; like repositioning of Mountain Dew by linking it with adventure.
Cost Reductions : New performance at lower cost. products that provide similar

6.

Categories of New Products

Note : As per research, less than 10% of all new products are
truly innovative and new to the world. These products involve the greatest cost and risk because they are new to both the company and the marketplace.

Categories of New Products

Blackberry A New-to-the-World Product

Mountain Dew An example of successful Repositioning 6

New Product Development Process

Start
Idea Generation

Commercialization

Idea Screening New Product Development Process

Market Tests

Business Analysis

Prototype Development

Managing New Product Development Process

A new product is best developed through a series of six stages.

Idea Generation Idea Screening Business Analysis Prototype Development Market Tests Commercialization

1. 2. 3. 4. 5. 6.

New-Product Development Process

1.

Idea Generation : New-product development starts with an idea. New-product ideas can come from interacting with various groups (like customers, suppliers, employees etc.) and from using creativity-generating techniques.
Idea Screening : At this stage mew-product ideas are evaluated to determine which ones to be studied further. The company sorts the proposed ideas into three groups : promising ideas, marginal ideas, and rejects. Business Analysis : The stage in new-product development in which the new product is reviewed from all organizational perspectives to determine performance criteria and likely profitability. It includes both qualitative (listing of product features, resources needed to produce the product, and a basic marketing plan) and quantitative (market demand, cost projections, investment requirements, and competitive activity) means of evaluation.
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2.

3.

New Product Development Process

4.

Prototype Development : If the results of the business analysis are favorable, then a prototype (a trial model) of the product is developed and tested internally. In case of services, the facilities and procedures necessary to produce and deliver the new product are designed and tested. The prototype can be a digital as well; like Boeing designed its 777 aircraft on a totally digital basis.
Market Tests : Unlike the internal tests conducted during prototype development, market tests involve actual consumers. A new tangible product may be given to a sample of people for use in their households (in case of consumer good) or their organizations (a business good). Following the trials, users are asked to evaluate the product. This stage often entails Test Marketing (see next slide). Following market tests, the management must make a final decision about introducing the product.
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5.

New Product Development Process

Boeing 777 Cock-pit Simulator

Boeing 777

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New Product Development Process

6.

Commercialization : In this stage, the decision is made to launch a new products full-scale production and marketing.

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Test Marketing

Test Marketing : A controlled experimental procedure in which a new product is tested under realistic market conditions in a limited geographical area.

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Consumer-Adoption Process

Adoption is an individuals decision to become a regular user of a product.

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New-Product Adoption Process

Adoption is an individuals decision to become a regular user of a product. Adopters of new products have been observed to move through five stages. Awareness : The consumer becomes aware of the innovation but lacks information about it. Interest : The consumer is stimulated to seek information about the innovation. Evaluation : The consumer considers whether to try the innovation. Trial : The consumer tries the innovation. Adoption : The consumer decides to make full and regular use of the innovation.
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1.

2.

3.

4. 5.

New-Product Adoption Process

Start
Awareness

Adoption New-Product Adoption Process

Interest

Trial

Evaluation

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Adopter Groups
Innovators

Laggards Adopter Groups

Early Adopters

Late Majority

Early Majority

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Adopter Groups

There are five Adopter Groups which differ in their value orientations and their motives for adopting or resisting the new product. Innovators (They represent only 2.5% of the market. They are venturesome consumers who are the first to adopt an innovation) Early Adopters (They represent 13.5% of the market. They are opinion leaders and purchase after innovators but sooner than other consumer groups) Early Majority (The represent 34% of the market. They adopt new product when its benefits are proven and a lot of adoption has already taken place)

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2.

3.

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Adopter Groups
4.

Late Majority (They represent another 34% of the market. They are a skeptical group pf consumers who adopt an innovation to save money or in response to social pressure)
Laggards (They comprise 16% of the market and are tradition bound, hence are last to adopt an innovation)

5.

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Adopter Groups

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The End

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