Learning Objectives:

1.To Describe the Indian market and new product development

2.To understand the concept of new product and factors
contributing to new product development
3.To analyze Summarize the new product development process
Lessons from New Product Introductions
Post 2000

•Innovations
•Integration of technology
•Involving the customer
•Managing alliances and network
•Understanding local culture
•Value for money is a good positioning
•Making the product available in the lanes and by lanes of the country
•Global brands can help the firm gain an entry but cannot guarantee success
•Segmentation is key to successful, new product launches in the Indian market
•Indian market has leapfrogged several decades of market development and is
today a mature market
New Product
Factors contributing to New
Product Development

•Changing Consumer Lifestyle

•Changing Customer Preferences
•Technological Changes
•Government Policy
New Product Development Process
Branding Decisions

An important strategy for differentiating a product from its

competitors, represents, to the customer, the source of the
product which leads him to associate with the brand
Manufacturer’s Brand Policy or
National Brand Policy

•Assumption that the manufacturer has built a reputation in the

market,
•has strength in distribution,
•and the firm has adequate financial resources to establish a new
product in the market.
•Customer confidence in the firm.
•Family Brand Name
•Independent Brand Name
Distributor’s or Store Brand Policy

Useful when the firm does not have strength in marketing, adequate
financial resources to build a brand, and competition in the industry is
high.
Risks in this strategy
a.loss of control over the product’s marketing
b.if the product succeeds, the premium may go to the distributor and
not to the manufacturer
c.it may lead to cherry picking
d.the distributor may not extend the desired marketing support to the
brand
Mixed Brand Policy
Firm to enter into a strategic alliance with a well known
marketing firm and let it market the product under its brand name
in a defined geographical area. The manufacturer also continues
to market the product under his own name nationally. This is done
to fight regional competition. This strategy allows the firm to
benefit from both the options discussed earlier.
Positioning
The act of communicating company’s offer so that it occupies a distinct and
valued place in the customer’s mind.

Ways to Position the Brand

a.Use situations;
b.Emphasizing tangible benefits;
c.Linking to uses;
d.Head on competitive positioning;
e.Lifestyle positioning, and
f.Benefits offered
Brand Positioning Errors

a.Under Positioning
b.Over Positioning
c.Confused Positioning
d.Doubtful Positioning
How to Position the Brand
Perceptual Mapping is commonly used. This technique involves studying the
consumer’s perception of the product and competitor’s brands and identifying
vacant slots based on this.
This involves:
1.Studying the ideal product perception by studying both tangible and
intangible attributes, that a customer looks for while buying a product.
2.Get the customers to rank these attributes in the order of importance to them.
3.Customer’s knowledge of the competitor’s brands.
4.How do the competitor’s brands fare on the ideal product map?
5.Based on the customer’s assessment of competitor's brands on the ideal
product map, product managers identify vacant slots and then build the
positioning strategy by filling these up.
Innovations and New Product Development
Firm can unlock its innovative potential by following the six principles:
1.Anticipate and Exploit Early Information Through “Front – Loaded’
Innovation Processes
2.Experiment Frequently but do Not Overload Your Organization.
3.Integrate New and Traditional Technologies to Unlock performance
4.Organize for Rapid Experimentation
5.Fail Early and Often but Avoid `Mistakes’
6.Manage Projects as Experiments
Theory of Diffusion of an Innovation/New Product Idea
Diffusing Innovations

Five characteristics influence the rate of adoption of an

innovation:
1.Innovation’s relative advantage
2.Innovation’s compatibility
3.Innovation’s complexity
4.Innovation’s divisibility
5.Innovation’s communicability