NEW PRODUCT

DEVELOPMENT
Technology Entrepreneurship
(ENT 600)
Group 3
Faculty of Mechanical
Engineering (FKM)
DEFINITION
• New Product Development can be defined
as the process by which entrepreneur
designs and invents new product or
service that can be sold to customers
• Products can be any of these following :
• A material good
• An intangible service
• A combination of the above
• A location
• A person
• An idea
What are new products?
• ‘new product’ is not be that easy to define
• The new product strategies may comprise
any of the following :
• Improvement/revision to existing
products
• Additions to existing lines
• ‘new to the world’ products
• ‘new to the firm’ products
• Repositioning

Classifying of products
• The major ways to classify products are by
type of user and degree of product
tangibility.
• The product maybe in the form of goods or
services
• The type of products :
• Consumer goods
• Business goods
• Services
Consumer goods
• Consumer good are those that are
purchased to satisfy individual or
household needs.
• They can be classified as :
• Convenience goods
• Shopping goods
• Speciality goods
• Unsought goods
Business goods
• A major characteristic of business good is that
their sales are often the result of derived
demand
• The derived demand can be said as the result
of the sale of the consumer goods
• Business goods can be divided into following
types :
• Raw materials
• Major equipment
• Support equipment
• Component parts
• Consumable supplies
•
Intangible services
• It also can be say as intangible activities or
benefits that an organisation provides to
consumers in exchange for money or
something else of value
• The characteristic of the intangible
services as follow :
• Intangibility
• Inseparability
• Variability
• Perishability
•
Product dimension
• Product or services are the needs to the
customers
• The product has many dimension that
includes :
• Features
• Quality
• Packaging
• Price
• Brands Name
• Technology
UNDERSTANDING
PRODUCT LIFE
CYCLE (PLC)
INTRODUCTION OF PLC
• Understanding the Product Life Cycle (PLC)
is of critical importance to a firm
launching a new product.
• It helps a firm to manage the risk of
launching a new product more effectively.
• It helps maximizing the sales and profits
simultaneously.
WHAT IS THE PRODUCT LIFE
CYCLE (PLC)

• It indicates that products have four things

in common:
• They have a limited lifespan
• Their sales pass through a number of
distinct stages
• Their profits are not static but increase
and decrease through these stages
• The financial, human resource,
manufacturing, marketing and
purchasing strategies that products
require at each stage
PLC (Marketing)
PLC (Engineering)
Stage In
Product
Developme
nt
 Idea
Generation

Idea
Screening

Concept
Development

Marketing Strategy
Development

Business
Analysis

Product Development

Test Marketing

Commercialization
 The company's
R&D department
Corporate spies
 Customers

Stage 1: Idea Generation

Competitors Salespeople

Focus groups Employees 

Stage 2: Idea screening

Will the customer in the

target market benefit from
the product?
Is it technically feasible
to manufacture the product?

Will the product be

profitable when manufactured
and delivered to the
customer at the target ?
 Stage 3: Concept
Development

Asking a sample of prospective

customers what they think of the
idea.

Creates a detailed version of the

idea stated in meaningful consumer
terms.

Concept testing asks target

consumers to evaluate product
concepts.
 Long-run sales and Product price,
profit goals and the distribution, and
marketing mix marketing budget for
strategy. the first year.

Stage 4: Marketing Strategy Development

The target market,

product positioning,
and sales, share, and
profit goals for the
first few years.
 Estimate sales volume based
upon size of market and
estimate profitability and
breakeven point

Sales, cost, and Stage 5: Business

profit projections Analysis

Estimate likely selling price

based upon competition and
customer feedback
 Produce a physical Test the product in
prototype or mock- typical usage
up. situations.

Produce an
initial run Stage 6: Beta Testing
of the And Market Testing
product

Make adjustments Conduct focus group

where necessary. customer interviews or
introduce at trade show.
Involves managerial planning
and focusing on feedback.

Stage 7: Technical
Implementation

Make necessary adjustments

to ensure product is ready
for launch
Stage 8: Commercialization

Launch the product.

Produce and place

advertisements and other
promotions.
Fill the distribution
pipeline with product.

Critical path analysis is

most useful at this stage
New Product Development
Process at Leading Company

To sh ib a C o rp o ra tio n

S o n y C o rp o ra tio n

A p p lie d M a te ria lC o rp o ra tio n

In te lC o rp o ra tio n
 To sh ib a C o rp o ra tio n

Research: Technology Transfer

Creation of Technical Possibilities
Development:
Manage Complexity by Organization Ap
Traditional Model

Technology Integration
Technology Setting
Investment
Research Refinement Development
Evaluation
Knowledge Generation
Retention
Application

Ideal Model
 Sony Corporation

Market in the Future

Development Design Production Sales Market Time

Feedback of information

Feedback of Trend
 Applied Material Corporation

Opportunity
Identification Production
(Product Roadmap)Product and Process Design Design Released
Frozen
C&F   

Accelerated
Process Customer Production
Release Released

Concurrent Manufacturing
Manufacturing and And Field Support
Field Support Design Qualification
 Intel Corporation
Business Input: Development
Market Segment Investment Implementation
Analysis Plan Approval Ship/
Approval Release Approval
Approval Meeting
Business
Exploration

Requirements

Planning
Product
Document Product Development Production

Product Product
Product Qualification
Overview Requirements Implementation Reports Product
Document Plan Documents
Proposal
Design
Specification
THE END