NEW PRODUCT PLANNING (281)

New Product Planning

The new product moves from ideas to

commercialization.
The New Product Planning Process

1. Idea Generation

2. Product Screening

3. Concept Testing

4. Business Analysis

5. Product Development

6. Test Marketing

7. Commercialization
The New Product Planning Process
1. Idea Generation

Idea generation is a continuous, systematic search for

new product opportunities. It explains sources of new
ideas and methods for generating them.

Large number of ideas and from different people should

be sought.

Ideas should not be criticized no matter how offbeat

they first appear.
Sources

1. Employees

2. Channel members

3. Competitors

4. Customers

5. Government, and others

Methods of Generating Ideas

1. Brain storming

2. Analyzing existing products

3. Reading trade publications

4. Suppliers/Dealers

5. Conducting surveys
Examples

1. Synthetic fibers

2. Antifreeze

3. Penicillin

4. Packed milks

5. Bottled water

6. Rogaine
2. Product Screening

In product screening, poor, unsuitable and unattractive

ideas are weeded out from further consideration.
3. Concept Testing

This is the feedback step and analyze customers

attitude towards proposed product. Concept testing is a
quick and inexpensive way of measuring customers’
response, showing picture of a product to the customer.

Once go through this process, company moves

prototype development (this is little expensive and
time consuming process).
Questions Asked

In concept testing, in general, following questions are

asked.
1. Is this idea easy to understand ?

2. Are claims about the product believable ?

3. Would you buy the product ?

4. How frequently would you buy the product ?

5. Do you find product differentiation ?

6. Would you change brand loyalty ?

7. Does it seems, satisfy your needs ?

8. Would you suggest any modification ?

4. Business Analysis

Business analysis involves detail review of followings.

1. Demand

2. Cost

3. competition
Business Analysis
5. Product Development

At this stage, idea of a new product is converted into

tangible form and basic marketing strategy is made.
Strategies involve followings.

Product construction, branding & packaging, product

positioning, consumer attitude & usage testing.

Even at this stage, if modification is needed, costs may

be relatively low since not yet mass production has
been started.
6. Test Marketing

Collect data from limited areas and anticipate

nationwide sales.
6. Test Marketing

DETAILS & ADVANTAGES

1. Test marketing is done in 2 – 3 cities.

2. Duration is 2 months to 2 years, average is 6 months.

3. Gives actual consumer behavior of decided cities.

4. Learn competitors’ reactions.

5. Learn distributors/whole sellers/retailers’ response.

6. Observe impact of new product on other company’s

established products’ sales.

6. Test Marketing -
DISSADVANTAGES

1. Delayed in nationwide launching.

2. Competitors are informed.

3. Unable to predict countrywide sales on the basis of

2– 3 cities.

4. May misjudge competition nationwide.

5. In the interim period, other companies may launch

similar nature of product national level.

7. COMMERCIALIZATION

Starts launching on commercial basis and introductory

phase of the product life cycle (PLC) starts.