new product development

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new product development-procedures,life cycle, operations

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New product development -procedures -lifecycle -operations: 

New product development -procedures -lifecycle -operations

New product development : 

New product development Definition: development of original products, product improvement, product modification, & new brands through the firm’s own R&D efforts.

Procedures of new product development: 

Procedures of new product development

Idea Generation: 

I dea G eneration Internal source # R&D # employees External source # customers # competitors # suppliers # distributers

Idea Screening : 

I dea S creening # selecting an idea which is feasible and workable to develop. # a survey can be done with the customers. # online blogs may discuss customers dissatisfaction with a certain product, which may provide ideas to inventors or a new product or service. # governments can enact new laws making changes to the way people use a product, which provides opportunity when new law created banning cell phones while driving, many companies rushed to sell Bluetooth devices for "hands free" calling.

Concept Development and Testing: 

C oncept D evelopment and T esting It provide full detailed version of the new product. # Who is the decision maker in the purchasing process ? # Will it be practical and feasible? # What benefits the product will provide ? # How will consumers react to the product? # What will it cost to produce it ?

Cont….: 

Cont…. # Testing the concept by asking a number of customers what they think of the idea # Will it offer the benefit that the organisation hopes it will?

Market strategy & development: 

M arket s trategy & d evelopment A proposed marketing strategy will be written laying out the marketing mix strategy of the product, the segmentation, targeting and positioning strategy sales and profits that are expected.

Business Analysis: 

B usiness A nalysis # Estimate like selling price based upon competition and customer feedback . # Estimate sales volume based upon size of market level . # Estimate profitability and break-even-point.

Product Development: 

P roduct D evelopment At this stage the prototype is produced. The prototype will clearly run through all the desired tests, and presented to a selection of people made up of the target market segment to see if changes need to be made.

Test marketing: 

T est m arketing Test marketing means testing the product within a specific area. The product will be launched within a particular region so the marketing mix strategy can be monitored and if needed modified before national launch.

Commercialization: 

C ommercialization There are certain factors that need to be taken into account before a product is launched nationally. These include: timing of the launch, how the product will be launched, where the product will be launched, will there be a national roll out or will it be region by region?

Cont…: 

Cont… Finally the commercialisation stage involves careful planning to maximise product success, a poor launch will affect product sales and could even affect the reputation and image of the new product.

Product Life-Cycle Strategies: 

P roduct L ife-Cycle S trategies # The Product Life Cycle ( PLC ) has Five Stages. # P roduct development # I ntroduction # G rowth # M aturity # D ecline

Product Life Cycle: 

P roduct L ife C ycle Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments ($) Sales and Profits ($)

Product Life-Cycle Strategies: 

P roduct L ife- C ycle S trategies Product development Introduction Growth Maturity Decline Begins when the company develops a new-product idea Sales are zero Investment costs are high Profits are negative PLC Stages

Product Life-Cycle Strategies: 

P roduct L ife- C ycle S trategies Product development Introduction Growth Maturity Decline Low sales High cost per customer acquired Negative profits Innovators are targeted Little competition PLC Stages

Marketing Strategies: Introduction Stage: 

Marketing Strategies: I ntroduction S tage Product – Offer a basic product Price – Use cost-plus basis to set Distribution – Build selective distribution Advertising – Build awareness among early adopters and dealers/resellers Sales Promotion – Heavy expenditures to create trial

Product Life-Cycle Strategies: 

P roduct L ife- C ycle S trategies Product development Introduction Growth Maturity Decline Rapidly rising sales Average cost per customer Rising profits Early adopters are targeted Growing competition PLC Stages

Marketing Strategies: Growth Stage: 

Marketing Strategies: G rowth S tage Product – Offer product extensions, service, warranty Price – Penetration pricing Distribution – Build intensive distribution Advertising – Build awareness and interest in the mass market Sales Promotion – Reduce expenditures to take advantage of consumer demand

Product Life-Cycle Strategies: 

P roduct L ife- C ycle S trategies Product development Introduction Growth Maturity Decline Sales peak Low cost per customer High profits Middle majority are targeted Competition begins to decline PLC Stages

Marketing Strategies: Maturity Stage: 

Marketing Strategies: M aturity S tage Product – Diversify brand and models Price – Set to match or beat competition Distribution – Build more intensive distribution Advertising – Stress brand differences and benefits Sales Promotion – Increase to encourage brand switching

Product Life-Cycle Strategies: 

P roduct L ife- C ycle S trategies Product development Introduction Growth Maturity Decline Declining sales Low cost per customer Declining profits Laggards are targeted Declining competition PLC Stages

Marketing Strategies: Decline Stage: 

Marketing Strategies: D ecline S tage Product – Phase out weak items Price – Cut price Distribution – Use selective distribution : phase out unprofitable outlets Advertising – Reduce to level needed to retain hard-core loyalists Sales Promotion – Reduce to minimal level

Operations of new product development: 

O perations o f n ew p roduct d evelopment New Product Lines: They allow the business to enter a completely new market segment. Additions to existing Product Lines: These are new items to the business, but they fit within an existing product line that the business already produces. They may represent a fairly new product to the market. Repositioning: These are new applications for existing products. They involve the retargeting of an old product to a new market segment.

Cont…: 

Cont… Improvements and Revisions to Existing Products: These “not so new” products are replacements of existing product lines. These “new and improved” product lines are incremental innovations . Cost Reductions: designed to replace existing product lines while providing similar benefits and performance but at significantly lower costs to the business.

Thank you: 

Thank you