Npd
- 1. DEFINITION The development of original products, product improvements, product modifications and new brands through the firm’s own R&D efforts.
- 2. CATEGORIES OF NEW PRODUCTS Changes to Augmented Product e.g. Zen Estillo Core Product Revision e.g. McDonald’s Aloo Tikki Burger Line Extensions e.g. BSA’s eBikes New Product Lines e.g. ITC’s Vivel Shampoo Repositionings e.g. Sugar Free Completely New e.g. Apple iPod High Low High Low Newness to Market Newness to Company
- 3. NEW PRODUCT LAUNCH - CHALLENGES Fragmented markets Costliness in the development process Faster required development time Shorter Product Life-cycle Failure Rate of 50% -75%
- 4. FAILED ATTEMPTS McDonald’s Deluxe line Premier Cigarette New Coke by COCA COLA Battlecruiser 3000AD by TAKE TWO The Ford Edsel Levi’s Type 1 Jeans …… .and many more
- 5. WHY? Hard Luck Improper Development Process
- 6. DEVELOPMENT PROCESS Idea Generation Idea Screening Concept Development & Testing Marketing Strategy Development Business Analysis Product Development Market Testing Commercialization
- 7. IDEA GENERATION 10 Ways To Get New Product Ideas 1. Solve an existing problem for people. 2. Find out what's the current hot trend. 3. Improve a product that is already on the market. 4. Create a new niche for a current product. 5. Add on to an existing product. 6. Reincarnate an older product. 7. Ask your current customers. 8. Combine two or more products together to create a new one. 9. Survey the people who visit your web site. 10. Create a new market for your existing product.
- 8. IDEA SCREENING Each idea should be reviewed by an idea committee Two Types of Errors DROP -error GO -error Overall probability of success Probability of technical completion Probability of commercialization Given technical completion Probability of economic success given commercialization = * *
- 9. CONCEPT DEVELOPMENT & TESTING Concept Development Concept Testing Conjoint Analysis
- 10. MARKETING STRATEGY DEVELOPMENT Target Market’s size, structure and behavior Planned price, distribution strategy & marketing budget Long-run sales and profit goals & marketing-mix strategy
- 11. BUSINESS ANALYSIS Estimating Total Sales Estimating Costs and Profits
- 12. PRODUCT DEVELOPMENT Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product.
- 13. MARKET TESTING Consumer-Goods Market Testing Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets Business-Goods Market Testing
- 14. COMMERCIALIZATION When (Timing) First Entry Parallel Entry Late Entry Where (Geographic Strategy) To Whom (Target-Market Prospects) How (Introductory Market Strategy)
- 15. NEW PRODUCT DEVELOPMENT DECISION PROCESS 1. Idea Generation Is the idea worth considering DROP 3. Concept Development & Testing Can we find a good concept for the product that consumers say they would try 5. Business Analysis Will this Product meet our Profit goal 7. Market Testing Have product sales met expectations 2. Idea Screening Is the idea compatible 4. Marketing Strategy Development Can we find a cost- Effective affordable marketing strategy 6. Product Development Have we developed a technically & commercially a sound product 8. Commercialization Are product sales meeting expectations YES YES YES YES YES YES YES NO NO NO NO NO NO NO NO Would it help to modify the product or marketing program NO YES Should we send the idea back for project development NO YES