Unit II

Noida Institute of Engineering and Technology, Greater
Noida
New Product Strategy

Unit-2
Product and Brand Management

Ms.Priyanka Malhotra
(AMBA-MK0312)
Asst Prof.
MBA-3rd Sem Dept of MBA
Ms.Priyanka Malhotra AMBAMK0312 Unit-2

1
04/06/2024
Topic Objective /Topic Outcome
New Products
Topic 1:
 New Product
 New Product Categories
04/06/2024 Ms.Priyanka Malhotra AMBAMK0312 Unit-2 2

What is a new product
• “By new product we mean original products, product improvements,

product modification and new brands that the firm develops through
its own research and development efforts”.
• “A new product is one which is really innovative which is significantly

different from existing and imitative products that are new to the
company.”According to William J. Stanton, M.J. Elzel and B.J. Walker
04/06/2024 Ms.Priyanka Malhotra AMBA 3

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New Product Categories
Booz, Allen and Hamilton have identified six

categories of new product in the terms of
their newness to the company and to the
market place.
i. New to the world Eg phones, tabs etc.
Samsung Fold
ii. New product lines. Eg Samsung Flip
iii. Line extensions or Additions to the

existing product lines Eg Electric cars

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New Product Categories
Product improvements: For example, cosmetics,

detergent products and food (diet, fat-free,
allergen-free products) industries.
Re-positioning: Eg Tata Safari
Cost reductions

Need of New Product Development
• Changing consumer
• Increasing competition
• Technological advancement
• New opportunities (growth and development)
• Risk diversification
• To increase company & brand reputation
• To utilise excess capacity (ONGC originally was an oil exploration
company; subsequently it went into refinery and now they have
entered into retail distribution and marketing of petroleum
products.)

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Daily Quiz
1. This is a group of closely related products. They are related through

technical, marketing, or user considerations.
• Product line.
• Product line depth.
• Product mix.
• Product item.
2. Are imitative products considered as new products?
• Yes
• No
3. Give one eg. Of line extension.
4. Give 2 reasons why a company introduces a new product in the market

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New Products
Topic 2:
 Product Management
 Organization for Product
Management
 Prototyping

Product Management
Product management is an organisational function within a

company dealing with new product development, business
justification, planning, verification, forecasting, pricing,
product launch, and marketing of a product or products at all
stages of the product lifecycle.

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Organisation for Product Management
• Product managers: Who are already handling existing

products. Drawback is that they are not able to give ample
time to new products as they are busy handling existing
products.
• New Product managers: They professionalise the new
product function. Drawback is that they are limited to their
product and its line extensions.
• New Product committees: High level committees are charged
with reviewing and approving proposals.
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Organisation for Product Management
• New Product Departments: This special department is

headed by a manager who has substantial authority and
access to top management. Its major responsibilities include
generating and screening new ideas, working with the R&D
Deptt. & carrying out field testing and commercialisation.
• New Product Venture Teams: A group brought together

from various operating departments and charged with
development of a specific product or business. They are
“intrapreneurs” who are relieved from other duties, given a
time frame and budget and informal work settings to focus
on development of new products.

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Prototyping
A prototype is an early sample, model, or release of a product built to
test a concept or process.
Features
• A product prototype is an example of a product you intend to
manufacture on a much larger scale.
• Compared to mass production, prototyping has a high cost per
individual unit and significantly lower if you get a bulk order of your
new product.
• A working prototype may differ from the final product, rapid
prototyping process may lead to a significant change in product
design.
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Types of prototyping
• Low-fidelity prototyping: fast and cheap, often paper-based,

enables a quick preview of the product, and typically doesn’t allow
for proper testing by users.
• High-fidelity prototyping: realistically appearing and functioning as

similarly as possible to the actual product before launch, interactive
and providing meaningful feedback; Also, good for demonstration in
front of potential investors or stakeholders.

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New Product Development (NPD)
• According to Wheelwright and Clark (1992), NPD is defined as

effective activity organisation and management to bring products to
market with low development costs and short development times.
• Product Development & Management Association (PDMA) defines

NPD as,
“A disciplined and defined set of tasks and steps that describe the
normal means by which a company repetitively converts embryonic
ideas into saleable products or services.”

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Daily Quiz
1. _____________are those who are already handling existing

products.
2. What is product management?
3. An early sample, model, or release of a product built to test
a concept or process is called a ____________.
4. A realistic and functional prototype is called a ___________
prototype.
5. __________ is defined as effective activity organisation and
management to bring products to market with low
development costs and short development times.
6. Name the steps in NPD process.

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New Products
Topic 3:
 New Product Development Process
 Test Marketing

New product Development Process

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https://youtu.be/7j4WGVAsf4Y

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8 STAGES OF PRODUCT DEVELOPMENT PROCESS
• Idea Generation
Internal idea sources refer to the in-house research and development
teams of the company.
External sources refer to competitor innovations, the customer wants,
distributors and suppliers, and so on.
• Idea Screening
Errors in idea screening:
• Drop error
• Go error

•Concept Development and Testing
•Development of Marketing Strategy

New product development process
• Business Analysis
• Product Development

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•Test Marketing: Test marketing is a marketing method that aims to

explore consumer response to a product or marketing campaign by
making it available on a limited basis before a wider release.
It provides an insight into how the product will be introduced into the
market, advertised, produced, packaged, distributed, and eventually sold
to the customers, and therefore any optimizations if required can be made
by the company.

Advantages of Test Marketing
•Gain an idea of how well the product will sell which allows the marketer
to build more realistic budgets, gain buy-in from other members of the
company.
•It helps you determine the most suitable and effective channels for
marketing.
•It helps you identify the best distribution channels and build a data-
driven distribution strategy for when the product launches.

Test Marketing
Disadvantages of Test Marketing
• Danger of the competition learning about the product and coming up
with a response before the full launch
• Test market may not be representative of the full target market,
leading to inappropriate decisions
• Delays in full launch may limit the revenue opportunity in markets
subject to rapid change
• Costly and time-consuming to administer.
Types of test markets

• Consumer goods Market testing
• Industrial goods Market testing

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Test Marketing
1. Consumer goods market testing

Trial —> Repeat —>Adoption —-> Purchase
• Sales-wave Research
Example: a free trial of new lipsticks, perfumes offered to the existing
customers, and feedback.
• Simulated Market test

The example is in departmental stores where new products are placed
and consumers’ behavior is tracked.

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Test Marketing
•Industrial Goods Test Marketing

All the goods that are produced for further use to make the final good
are considered industrial goods.
They are divided into two major categories:

•Alpha Testing
•Beta testing
Other types of test marketing:
•Controlled Market test

•Test Markets

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Daily Quiz
• _____ is the development of original products, product improvements,
product modifications, and new brands through the firm’s own R&D efforts.
a. Idea generation
b. Concept testing
c. Test marketing
d. New product development
• New-product development starts with _____.
a. Idea screening
b. Idea generation
c. Concept development and testing
d. Marketing strategy development
• What are the errors in idea screening?
• An attractive idea must be developed into a _____.
a. product idea
b. product concept
c. product image
d. test market

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Daily Quiz
•_____ calls for testing new-product concepts with groups of target

consumers.
a. Concept development
b. Concept testing
c. Idea generation
d. Idea screening
• The marketing strategy statement in new product development
consists of three parts: _____, _____, and _____.
a. idea generation; idea screening; concept development
b. idea generation; concept development; concept testing
c. idea generation; idea screening; idea management
d. target market description; planned product positioning; sales,
market share, and profit goals for the first few years.

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Daily Quiz
• _____ is the stage of new-product development in which the

product and marketing program are tested in more realistic
market settings.
• Give two advantages of test marketing
• Give two disadvantages of test marketing
• How is test marketing done in consumer markets?

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New product strategy
Topic 4:
 Commercialization
 The need for Product Innovation
Strategy
 The components of new Product
Strategy

New Product Development Process
Commercialization: Based on the information gathered during the test

marketing process, if the business management gives a go-ahead, the
product is finally introduced into the market and this process is called
commercialization.
This stage often leads to massive costs in terms of initial
infrastructural investments as well as sales promotions and
advertisements.
There are two ways of commercializing the products:

i. Roll out (phased, limited to specific geographic areas) and
ii. Mass marketing (whole market simultaneously)

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New Product Failure
• No product point-of-difference
• Limited retailer support
• Poor product design
• Established customer loyalty in the market
• Weak launch or poorly executed launch
• Adverse media attention
• Aggressive competitor actions
• Poor pricing or cost structure
• Weak supporting brand equity
• Small target market
• No clear market need or perceived product benefits
• Poor internal marketing
• Weak sales for size of company
• Insufficient time for success
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Product development strategy
Product development strategy is a subset of corporate strategy which sets

the direction for new products by establishing goals and through funding
decisions.
The aim of product development strategy is to gain competitive
advantage by placing product offerings in the best possible position to
drive business goals such as sales growth, revenue, and profits.
New product development strategy is the means to:

• Mitigate risk in developing a product concept
• Improve the fit between products and markets
• Overhaul a product line
• Increase the sales of existing products by enhancing them
Ms.Priyanka Malhotra AMBA 33

04/06/2024 MK0312 Unit-2
Product development strategy
Eg. Apple’s product development strategy

Apple is an example of a platform/derivative strategy. They connect their
top level strategy to their product development process. The tech giant
tends to be product-driven. Apple creates products and then finds the
market for them later. Steve Jobs suggested that customers do not always
know what they want and believed that they will pay a premium for superb
products and Apple tends to focus on optimizing existing offerings. It relies
on brand loyalty and is happy to allow competitors to control the market in
lower-priced products that compete with Apple’s.
Ms.Priyanka Malhotra AMBA 34

04/06/2024 MK0312 Unit-2
Product Innovation strategy
Meaning
A product innovation strategy is about creating winning products,
which means products that are in an attractive market, target a
profitable customer segment, address the right unmet needs, and help
customers get a job done better than any competing solution.
Need for product innovation strategy:

• Innovation strategies result in a clear focus.
• It helps you design a system to match your specific competitive needs.
• Also helps to trade-off decisions and choose all the elements of the
innovation system.
• It makes innovation measurable.
• It promotes innovation culture.

Components of New Product strategy
Product vision
Product vision describes the long-term mission of your product.
These are typically written as concise, aspirational statements to
articulate what the company hopes the product will achieve. For this
reason, a product vision should remain static.
For example, Google’s early vision statement for its search engine
was, “Organize the world’s information and make it universally
accessible and useful.”

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Goals
A product vision should lead to high level strategic goals. These goals
will, in turn, influence what the team prioritizes on its product
roadmap.
Examples of product goals include:

• Increase free-trial downloads by 50% in the next 6 months
• Generate $3MM in revenue within 12 months
Using SMART goals is the best approach to utilize when setting goals for
your product strategy. Like product roadmaps, goals should be specific,
measurable, attainable, relevant, and time-bound.

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Initiatives
Initiatives are the strategic themes derived from your product goals
and then placed on your roadmap. They are significant, complex
objectives your team must break down into actionable tasks
Examples of product initiatives include:

• Improve customer satisfaction and Add customer delight
• Increase lifetime customer value
• Sell new services
• Break into new industries or geographical areas
• Sustain product features

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Daily Quiz
• Define product development strategy.

• Define product innovation strategy.
• What is product vision. Give an example.
• Define SMART product goals.
• Give an example of product initiatives.

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Topic 5:
 Time to Market
 Breaking into the Market
 Managing Growth
 Resistance to Change

Breaking into new markets
Breaking into new markets means reaching an even wider

audience and developing more ways to earn revenue.
If the barriers are high (e.g., no significant capital investment, no

market leader to overcome, no patent or trade secret obstacles),
one's efforts must be more aggressive and one needs to break
into that market.

Time To Market
Time to Market Concept
Time to market (also called TTM or time-to-market) is defined as the
period from the conception of a new idea until it is released to the
marketplace.
Time-to-market (TTM) refers to the time from which a company initially
conceives a product or service idea to the point when the actual
product or service is accessible to buyers in the market (Afonso et al.,
2008).
Types of time to market

The variations and types of time to market are as follows-
• Speed
• Flexibility to change
• Minimizing the use of resources
• Predictable schedules
Time to market
Benefits of time to market
• The benefits of time to market are as follows-
• Increasing profitability
• Garnering larger sales figures
• Speeding the time to market
• Improving the quality of the product
• Increasing productivity of a company
• Improving the communication level within the company
• Proficient managerial processes
• Higher share in the market
• Keeps you ahead in the game by dealing effectively with the
competitors

Resistance to change
Change management is a discipline that guides organizational

improvement. It results in a permanent change as a result of
observable shifts in behavior.
Change management has three aspects:

• Acknowledging the disadvantages of the current state
• Setting clear goals that lead to genuine improvement
• Creating structures that move the organization from its current to its
desired state
Change inside an organization is the result of three elements: processes,

platforms, and people.


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Why is Change Management in Product Development Difficult ?
• Product development change initiatives are also hard to measure.

• Incremental measures made along the way are often unreliable.
• Product development also involves many functions working together.
Tinkering with one function often has unintended consequences for
another.
• Poor communication,
• Current corporate culture
• Poor commitment of management
• Lack of training
• Fear of the unknown.

Daily Quiz
• Differentiate between time to market and breaking into

market.
• Why do product managers resist to bring a change? How can
it be overcome?

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Topic 6:
 Leveraging new Product Growth
 Offensive strategy
 PLC extension strategies
 CRM

Leveraging new product Growth
• If a company is experiencing a steady drop in sales and revenue due to
old-fashioned products or obsolete technology, it can take advantage
of product development tactics.
• Product-led growth is both a go-to-market strategy and a business

growth strategy. It leverages the product as the primary vehicle to
acquire, activate and convert customers.
• It can be done through User-generated content, Leveraged distribution

channels and On-demand utility pricing for services.
Eg: Pinterest: It’s curated feed, personalised user on boarding, and

inherent virality make Pinterest a poster child for product-led growth

Offensive Strategy
DEF.: When a business takes certain steps against the market leader to
get competitive in order to secure its market position.
Egs.: reduce the price to a great extent, creative and catchy design to
attract the attention, and a great marketing and advertising campaign.

Offensive Strategy
Strickland and Thompson have divided the competitive edge time into
three categories;
• Build-up Period: If resources are readily available, then it’ll be short.
Otherwise, it would be longer.
• Benefit Period: is a time when a business enjoys the benefits of the
competition. It could be short or long depending upon your creative
offer.
• Erosion Period: is when the competitor has found a way to counter
your offer. It means the end of your competitive edge.

Offensive Strategy
How Does Offensive Strategy Works?

For instance, a publishing company makes some tech and distribution
changes.
An offensive strategy would require the company to diversify its
resources into attractive markets, investing more resources, and
acquiring a patent for distributing the technology.
On the other hand, the defensive strategy would require you to wait
for the right moment when the readership falls, and then applying
the popular and cheap technology.

Offensive Strategy
Types of Offensive Strategies with Examples

• Flank Attack
Example:
LG attacked the other colored TV manufacturers in the rural market of
India. That’s how LG became the first brand in India to target the
rural market. LG found out that the village market isn’t only price-
conscious, but they’re also quality-conscious. They’re willing to pay
more for a product if it fixes their problems.

Offensive Strategy
Types of Offensive Strategies with Examples

• Frontal Attack
Example:
Coca-Cola and Pepsi both are the market leader in the soft drink
beverage industry. They both have got capital and resource. They’ve
got a long history of frontal attacks. When Coca Cola launched diet
coke, then Pepsi offered diet Pepsi.

Offensive Strategy
• Encirclement Attack
Example: E-commerce platforms usually follow the enrichment attack
and they attack all the strengths and weaknesses of the competitor
platform. They want to win the market share and beat the
competitor.
• Bypass Attack
Example: Samsung fold and flip to counter iphone and gain an
advantage.
• Guerrilla Marketing
Example: McDonald’s painted the zebra crossing lines as yellow to
symbolize French fries along with the brand image like a package. The
zebra lines or the French fries are coming out of the package.

Offensive Strategy
What Makes Offensive Strategy Successful

• A successful offensive strategy must keep in mind the following steps;
• A company must achieve the product acceptance of customers in a
very short time. It should be new and reasonably innovative.
• You should reduce the competition by launching a counter offer.
• You must have all the required resources for the production of the
counteroffer.

Offensive Strategy
What Makes Offensive Strategy Successful

• You should have a contingency plan in order to protect your position.
• If the benefit period doesn’t last long, it means that the competitors
may come up with a counteroffer at any time. They may copy your
innovative differentiating product. The offensive strategy would only
work if your business has strong resources and competencies.

Extending the product life cycle
When a product reaches the decline stage, a business can act to extend its
life cycle. There are a number of extension strategies that they can use to
prevent their product from becoming obsolete.

Extension strategies
Extension strategies:
• Change product–version 2.0 and then version 3.0.
• Change price– to allow new customers to buy it.
• Change place– sold in different countries or territories to gain more
sales.
• Change promotion– can prolong the life of the product, giving it a
new image.

Extension strategies
Extension strategies:
• Change usage– For example breakfast cereals used advertising to
show consumers eating cereal at different times of the day.
• Change name– If a product has suffered from bad publicity and sales
are falling, a tried and tested technique is to simply change the name
of the product.

CRM
According to Shani and Chalasani(1992), defines Customer Relationship

Management as“an integrated effort to identify, maintain and build up a
network with individual consumers and to continuously strengthen the
network for mutual benefit of both sides, through interactive,
individualized and value added contacts over a long period of time”
Customer relationship management (CRM) has the business purpose of

intelligently finding, marketing, selling to and servicing customers.

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CRM

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CRM
What will CRM strategy do for my business?
A good CRM strategy will help you:
• Provide an enjoyable customer experience at all touch points of the
customer journey
• Strengthen collaboration between sales, marketing, and customer
service teams
• Clearly and quickly identify the most worthwhile leads and
opportunities
• Keep track of your leads and customers as they move through the buyer
funnel
• Carry out targeted marketing campaigns
• Produce concrete figures and data insights to inform and guide your
future business strategies.
• Customer retention
• To cross sell products more effectively
Daily Quiz
• How can you leverage new product growth?

• A _______ is when you attack the competitor face to face by
offering the same product, price, and quality.
• _____________ platforms usually follow the enrichment
attack.
• Dependency on other functions is one reason of _________
to change.
• Name 2 PLC extension strategies.
• Give one example of a PLC extension.
• _________ is an integrated effort to identify, maintain and
build up a network with individual consumers.

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Weekly Assignment
1. Explain Offensive strategy taking an example from the Service

industry.
2. Discuss the PLC extension strategies of Facebook.

MK0312 Unit-2
THANK YOU

MK0312 Unit-2

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Noida Institute of Engineering and Technology, Greater

New Product Strategy

Product and Brand Management

Ms.Priyanka Malhotra AMBAMK0312 Unit-2

04/06/2024 Ms.Priyanka Malhotra AMBAMK0312 Unit-2 2

• “By new product we mean original products, product improvements,

• “A new product is one which is really innovative which is significantly

04/06/2024 Ms.Priyanka Malhotra AMBA 3

Booz, Allen and Hamilton have identified six

ii. New product lines. Eg Samsung Flip

iii. Line extensions or Additions to the

04/06/2024 Ms.Priyanka Malhotra AMBA 4

Product improvements: For example, cosmetics,

Re-positioning: Eg Tata Safari

04/06/2024 Ms.Priyanka Malhotra AMBAMK0312 Unit-2 5

04/06/2024 Ms.Priyanka Malhotra AMBA 6

1. This is a group of closely related products. They are related through

04/06/2024 Ms.Priyanka Malhotra AMBA 7

04/06/2024 Ms.Priyanka Malhotra AMBAMK0312 Unit-2 8

Product management is an organisational function within a

04/06/2024 Ms.Priyanka Malhotra AMBA 9

• Product managers: Who are already handling existing

• New Product Departments: This special department is

• New Product Venture Teams: A group brought together

04/06/2024 Ms.Priyanka Malhotra AMBA 11

• Low-fidelity prototyping: fast and cheap, often paper-based,

• High-fidelity prototyping: realistically appearing and functioning as

04/06/2024 Ms.Priyanka Malhotra AMBA 13

• According to Wheelwright and Clark (1992), NPD is defined as

• Product Development & Management Association (PDMA) defines

04/06/2024 Ms.Priyanka Malhotra AMBA 14

1. _____________are those who are already handling existing

04/06/2024 Ms.Priyanka Malhotra AMBA 15

04/06/2024 Ms.Priyanka Malhotra AMBAMK0312 Unit-2 16

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•Development of Marketing Strategy

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•Test Marketing: Test marketing is a marketing method that aims to

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Types of test markets

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1. Consumer goods market testing

• Simulated Market test

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•Industrial Goods Test Marketing

They are divided into two major categories:

Other types of test marketing:

•Controlled Market test

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•_____ calls for testing new-product concepts with groups of target

04/06/2024 Ms.Priyanka Malhotra AMBA 28

• _____ is the stage of new-product development in which the

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New product strategy

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Commercialization: Based on the information gathered during the test

There are two ways of commercializing the products:

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