New Product Development Marketing Management
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This presentation provides an overview of the new product development process. It discusses the major stages in NPD, including idea generation, screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing, and commercialization. The presentation notes that only 10% of new consumer products succeed in the long run, and that most products fail due to factors like not fulfilling needs, overestimating the market, design flaws, incorrect positioning/pricing/promotion, being pushed despite poor research, going over budget, or facing strong competitive responses. The conclusion states that following a staged NPD process can help businesses focus investments and shorten the time from idea to revenue for new products.
New Product Development Marketing Management
- 1. PRESENTATION ON NEW PRODUCT DEVELOPMENT • Submitted to: Dr Shinwari • Submitted by: Samiullah Safi
- 3. CONTENTS: • What is new product development? • New-Product Development Process • New product failures • Stages in NPD • Conclusion
- 4. WHAT IS NEW PRODUCT DEVELOPMENT? New product development (NPD) is the term used to describe the complete process of bringing a new product to market. New product development refers to original products, product improvements, product modifications, and new brands developed from the firm’s own research and development.
- 5. NEW-PRODUCT DEVELOPMENT PROCESS MAJOR STAGES IN NEW-PRODUCT DEVELOPMENT
- 6. IDEA GENERATION Where do ideas come from? • Internal sources:- Company employees at all levels: • External sources :- Customers Distributors Suppliers Outsourcing partners Study the products of competitors
- 7. IDEA SCREENING • Keep the good ideas and drop the poor ones. • Criteria :- Market Size Product Price Development Time & Costs Manufacturing Costs Rate of Return
- 8. CONCEPT DEVELOPMENT AND TESTING: 1.Develop a working description and visualization of the product idea and concept. 2. Concept Testing - Test the Product Concepts with Groups of Target Customers 3. Choose the Best One
- 9. MARKETING STRATEGY DEVELOPMENT: • 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
- 10. BUSINESS ANALYSIS •Assess economic viability of the concept. Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives If No, Eliminate Product Concept If Yes, Move to Product Development
- 11. PRODUCT DEVELOPMENT • Develop concept into physical product prototype. • Large jump in investment – “point of no return”. • Test and refine prototype until product passes consumer and legal scrutiny.
- 12. TEST MARKETING: Controlled Test Market A few stores that have agreed to carry new products for a fee. Simulated Test Market Test in a simulated shopping environment to a sample of consumers. Standard Test Market Full marketing campaign in a small number of representative cities.
- 13. COMMERCIALIZATION: • Broad launch of product if market test results are positive. • Timing of launch is important. • Potential Rollout plans – Local – Regional – National – International – “Wider Test Market”
- 14. NEW-PRODUCT FAILURES • Only 10% of new consumer products succeed in the long run. • Why do most products fail? –Don’t fulfill a real need or want –Overestimation of market size –Design problems that compromise functionality –Incorrectly positioned, priced or promoted (4 P’s) –Pushed despite poor marketing research findings –Development costs go over budget –Competitive response
- 15. CONCLUSION Implementation of a NPD process with stages has helped businesses focus their New Product investment on the most potentially rewarding projects. It has shortened the time between idea and revenue by orchestrating the complex set of activities required for the commercial success of new products.