NEW PRODUCTION
DEVELOPMENT PROCESS
Presented in the class of: - Submitted By: -
Dr. Manoj Kumar Ashutosh
Bharat
Chhavi
Renuka
Teena
Contents: -
• Introduction
• Meaning and definition
• Product
• New Product Development Process
Introduction
Once the company has carefully segmented
the market, chooses its target customers.
Identify their need and determine the market
positioning ,It is able to develop new
product. Marketers play key role in the new
product development process, by identifying
and evaluating new-product ideas and
working with research and development and
others in every stage of development.
Meaning & Definition
Product development is the process of finding out the
possibility of producing product, it includes the
decision as to- whether it would be feasible or not to
produce the product & whether it would be
profitable or not for the enterprise to do so
According to Limpson,-”Product development involves
the adding, dropping and modification of item
specification in the product line for a given period of
time, usually one year.”
What is a Product?
• it is more than physical products; includes
services, places, persons, and ideas
• it is easy to visualize the products of Esso,
but more difficult to describe those of the
Toronto Symphony, UNICEF, or the Salvation
Army
• some products are sold only to consumers,
while others are sold to organizations
• whether a product is a consumer product or a
business product depends on how it is used
Product
Product
quality Physical
Seller’s characteristics
services of goods
Seller’s
Price
reputation
Colour Brand
Product
warranty Packaging
Design
Consumer Goods
Classes
Consumer products can be classified by the
buying behaviour of the consumers:
• Convenience goods are bought with little time
and effort, such as milk, bread, a chocolate bar.
• Shopping goods are those where extensive
comparison is the norm-- cars, furniture, clothes.
• Specialty goods are those for which consumers
have a strong brand preference. BMW, Armani.
• Unsought goods are those now unknown to the
consumer or, if known, undesired.
9-7
Classifying Business
Products
• Raw materials: unprocessed, become part of
other manufactured products
• Manufactured parts and materials: processed
products that become part of other products
• Installations: major buildings and equipment
• Accessory equipment: used in operations,
include computers, desks, tools
• Operating supplies: low value, used by most
firms, convenience products for businesses
9-8
New-Product Development
Reasons for new product failure
Overestimation of market size
Poor design
Incorrect positioning
Wrong timing
Priced too high
Ineffective promotion
Management influence
High development costs
Competition
New Product Development
Process
Idea Idea Concept Market
Generation screening Development & Strategy
Testing Developmen
Commercializati Market Product Business
on
Testing development analysis
Step: I IDEA GENERATION
Idea generation is the systematic search for
new-product ideas
Sources of new-product ideas
• Internal
• External
Idea Generation
Internal sources refer to the company’s own
formal research and development,
management and staff, and
entrepreneurial programs
External sources refer to sources outside
the company such as customers,
competitors, distributors, suppliers, and
outside design firms
Step: -II Idea Screening
• Process to spot good ideas and drop
poor ones
• Criteria
– Market Size
– Product Price
– Development Time & Costs
– Manufacturing Costs
– Rate of Return
Step: - III Concept Development and
Testing
Product idea is an idea for a possible product
that the company can see itself offering to
the market
Product concept is a detailed version of the
idea stated in meaningful consumer terms
Product image is the way consumers perceive
an actual or potential product
Concept testing refers to testing new-product
concepts with groups of target consumers
Step:- IV Marketing Strategy
Development
• Marketing strategy development refers to
the initial marketing strategy for introducing
the product to the market
• Marketing strategy statement includes:
– Description of the target market
– Value proposition
– Sales and profit goals
Marketing Strategy Statement Formulation
Part One - Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
Part Two - Short-Term:
Product’s Planned Price
Distribution
Marketing Budget
Part Three - Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
Step: - V Business analysis
Business analysis involves a review of the sales,
costs, and profit projections to find out whether
they satisfy the company’s objectives.
In business analysis following point should be
taken as consideration:-
• Estimating Total Sales
• Estimating Cost and Profits
IfIfYes,
Yes,Move
Moveto
to
Product
ProductDevelopment
Development
IfIfNo,
No,Eliminate
Eliminate
Product
ProductConcept
Concept
Business
BusinessAnalysis
Analysis
Review
ReviewofofProduct
ProductSales,
Sales,Costs,
Costs,
and
andProfits
ProfitsProjections
Projectionsto
toSee
Seeifif
They
TheyMeet
MeetCompany
CompanyObjectives
Objectives
Step: - VI Product Development
Product development
involves the creation
and testing of one or
more physical
versions by the R&D
or engineering
departments
Requires an increase in
investment
Step: - VII Test Marketing
Test marketing is the stage at which the
product and marketing program are
introduced into more realistic marketing
settings
Provides the marketer with experience in
testing the product and entire marketing
program before full introduction
Step: - VIII Market Testing
The Management is satisfied with functional
and Psychological performance ,The
product is ready to dress up with a brand
name and packaging and put to a market
test. The new product is introduced into an
authentic setting learn how large the market
is and how customers and dealers to react
to handling ,using and repurchasing
product.
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
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Step VIII: - Commercialization
Commercialization is the introduction
of the new product
• When to launch
• Where to launch
• Planned market rollout
Questions…
Thanks….
