New Product

A product new to the world, the

market, the producer, the seller,
or some combination of these.
 New pdt development

Strategies for Obtaining New Product Ideas

Acquired
Acquired New
Companies Newto
toworld
world
Companies

Acquired
Acquired New
Patents Newproduct
productline
line
Patents

Acquired
Acquired Addition
Additiontotoexisting
existing
Licenses
Licenses pdt
pdtline
line

Repositioning,
Repositioning,
cost
costreductions
reductions
 Categories of New Products
New-To-The-World
New-To-The-World

New
New Product
Product Lines
Lines
Six
Six
Categories
Categories Product
Product Line
Line Additions
Additions
of
of
New
New Improvements/Revisions
Improvements/Revisions
Products
Products
Repositioned
Repositioned Products
Products

Lower-Priced
Lower-Priced Products
Products
 Why Do We Develop New Products?
– New technology
– Increase sales and profits
– Product life cycle and having products in every
stage/shorter cycles
– Increased domestic & foreign competition
– Change in consumers needs & tastes /product
obsolescence
 Causes of New Product Failures

 Overestimation of market size,

– Product design problems,
– Product incorrectly positioned, priced or advertised,
– Product may have been pushed despite poor marketing
research findings,
– Costs of product development
– Competitive actions
 Why Do New Products Fail?

• Shortage of imp. ideas

• Fragmented markets
• Social n govt. constraints
• Costliness of development process
• Capital shortage
• Faster development time
• Shorter product life cycles
 Improving New-Product Success

• New product success depends on having :

– Unique superior product (one with higher quality, features,
and value in use)
– Well-defined product concept (a defined target market,
product requirements, and benefits).
– understand its customers, markets and competitors, &
– develop products that deliver superior value to customers.
 Lessons From Npd In India

• Understanding local culture-mcdonalds

• Value for money as positioning-Peter England

• Pdt. availability in urban n rural

• International brand helps firm gain entry.

 New-Product
Development Process
Idea Generation
Idea Screening
Concept Develop.& Testing
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialization
 Idea Generation
Customers
Customers
Employees
Employees
Distributors
Distributors
Competitors
Competitors
RR&&DD
Sources
Sources of
of
New-Product
New-Product Consultants
Consultants
Ideas
Ideas
Creative
CreativeThinking
Thinking
Idea Screening
 Process to spot good ideas and drop
poor ones as soon as possible.
Many companies have systems for
rating and screening ideas which
estimate:
– Product idea
– Target market
– Market Size
– Product Price
– Development Time & Costs
– Manufacturing Costs
– Rate of Return
Criteria In Reviewing Idea
Does pdt meet need?

Would it offer superior value?

Can it be distinctively advertised?

Does co. have capital & R&D?

Will new pdt deliver sales vol., sales

,growth, profit?
 3. Choose the One That Has the
Strongest Appeal to Target
Customers
2. Concept Testing - Test the
New Product Concepts with
Groups of Target Customers
or Potential Product
1. Develop New Product Ideas
Perceive an Actual
into Alternative Detailed
the Way Consumers
Product Concepts
Product Image is
Concept Development
 Concept Development

• Product idea-possible pdt co. might offer

• Product concept-elaborated version of idea in consumer

terms
 Marketing Strategy

Part One Describes Overall:

Target Market-Young
Planned Product Positioning-low price,good quality
Sales & Profit Goals
Market Share-10% to 14%
Part Two Describes First-Year:
Product’s Planned Price
Distribution-allowances,free samples
Marketing Budget-adv on tv n print

Part Three Describes Long-Term:

Sales & Profit Goals-25% mkt share,12% investment
Marketing Mix Strategy
 Business Analysis

Preliminary Demand

Considerations
Considerations in
in Cost
Business
Business Analysis
Analysis
Stage
Stage
Sales

Profitability
 Product Development

• quality function deployment-CA-EA

– Improves communication b/w marketers, engineers,
manufacturing
– Functional aspects n psychological parameters like size,
color, weight
• Alpha test- test pdt within firm
• Beta test- customer will use prototype
• Consumer test-invite consumer to co. n give them samples
 Test Marketing
Standard Controlled
Test Market Test Market

Full marketing campaign A few stores that have

in a small number of agreed to carry new
representative cities. products for a fee.

Simulated
Sales wave Test Market
research
Reoffering pdt Test in a simulated
or competitor brand shopping environment
at less cost to a sample of
consumers.