PRODUCT MANAGEMENT-MODULE Before you develop a product in its true sense, you need to create its prototype.

A
prototype is a small and simple version of the product, made with minimum
What is a New Product?
resources and used to test the possibility of the product to drive sales. Prototyping
A new product, in its essence, is an offering that is novel or significantly different gives you a rough idea of how well your actual product will perform in the market. If
from existing products in the market. This novelty can take various forms, including your prototype fails, you need to consider other product options that you might
technological innovation, unique features, design aesthetics, or even a different have thought of, instead of continuing with the production of this one.
pricing strategy. New products can be categorised into two main types:
5. Product Development
 Incremental Innovation: These products represent a modest evolution of
This is the final stage and involves the actual product development. This means you
existing products. They may offer minor improvements or added features,
now manufacture the actual product that will be made available in the market for
but they are not revolutionary. For example, a smartphone with a slightly
people to buy.
better camera or longer battery life would be considered an incrementally
innovative product.

 Radical Innovation: Radical innovations, on the other hand, introduce Management’s Perspective on New Products
groundbreaking changes to the market. They disrupt existing norms and
From a management perspective, new products are essential for several reasons:
create entirely new product categories. Examples include the introduction of
the personal computer, the smartphone, or the electric car. 1. Growth and Revenue Generation: The introduction of new products is a
fundamental strategy for achieving business growth. It allows companies to tap into
new markets, expand their customer base, and generate additional revenue streams.
Here are the five elements of a well-structured product development plan. This growth is vital for sustaining competitiveness and financial health.

1. Identify the Design Criteria 2. Competitive Advantage: Companies that consistently bring innovative products to
market gain a significant competitive advantage. New products can differentiate a
This stage identifies the design criteria by brainstorming different, possible, and new
brand, attract new customers, and keep existing ones loyal. In industries
products.
characterised by rapid technological advancements, staying ahead of the curve is
2. Conduct an Idea Analysis imperative.

In this step, you evaluate the initial product concept deeper. Conduct concept 3. Market Leadership: Organisations that lead in introducing new products often
studies to determine whether it is feasible or not for your company to manufacture become market leaders. They set industry standards and shape customer
the product. expectations, making it challenging for competitors to catch up. For
example, Apple’s iPhone has maintained its leadership position in smartphone
3. Carry Out Concept Genesis marketing through a continuous stream of innovative product releases.
This involves turning the product development opportunity into a tangible and 4. Meeting Consumer Needs: Developing new products allows companies to
feasible concept. address evolving customer needs and preferences. By staying attuned to market
4. Create a Prototype demands, businesses can tailor offerings to provide better solutions and
experiences, leading to increased customer satisfaction and loyalty.
Consumer’s Perspective on Newness incremental improvement over their older versions. Companies that frequently
upgrade their existing products can build a favorable impression of social
Consumers play a crucial role in the success of new products. Their perspective on
innovation.
“newness” is influenced by several factors:
3. Grow Your Business
1. Perceived Value: Consumers assess new products based on their perceived value.
They consider whether the product fulfils a need, offers unique features, or Product development is also crucial for growing your business. More variety in your
enhances their quality of life. A product’s perceived value can make it more product base means more avenues for sales to come in. New products can prove to
appealing, even if it comes with a premium price tag. be the lifeblood for your company. If your past products fail, your new products have
a chance to be successful.
2. Innovation and Trendiness: Many consumers are drawn to products that are
innovative and align with current trends. Products that incorporate cutting-edge The lifecycle of products and services
technology or fashionable design elements often garner attention and demand.
There are five key stages in the lifecycle of any product or service.
3. Risk vs. Reward: Consumers also weigh the risks associated with adopting a new
Development - at this point your product or service is only an idea. You're investing
product. They consider factors such as product reliability, potential compatibility
heavily in research and development.
issues, and the learning curve required to use the product effectively. Companies
must address these concerns to reduce barriers to adoption. Introduction - you launch your product or service. You're spending heavily on
marketing.
4. Word of Mouth and Reviews: Social influence plays a significant role in
consumers’ perceptions of new products. Positive word-of-mouth recommendations Growth - your product or service is establishing itself. You have few competitors,
and favourable reviews can propel a new product to success, while negative sales are growing and profit margins are good. Now's the time to work out how you
feedback can hinder its adoption. can reduce the costs of delivering the new product.
Importance of Product Development Maturity - sales growth is slowing or has even stopped. You've been able to reduce
production and marketing costs, but increased competition has driven down prices.
Product development is vital for businesses for several reasons, as discussed below.
Now is likely to be the best time to invest in a new product.
The success of a new product requires a substantial amount of resources to be
invested in it. Decline - new and improved products or services are on the market and competition
is high. Sales fall and profit margins decline. Increased marketing will have little
1. Provide New Value For Customers
impact on sales and won't be cost-effective unless new markets are identified.
You need to indulge in product development to provide new value to your
The project development process
customers. If you keep selling the same product to the same people over a long
time, your audience will get bored with your brand and probably stop buying. An effective development process for products or services should be divided into a
Coming up with new product ideas and testing them in the market keeps your number of key stages:
business alive.
 Idea generation - to capture new ideas.
2. Improve the Society
 Idea distillation - to screen out those ideas not worth taking forward.
By making more and creative items available for people in a community to buy, you
provide a variety and improve your society. Many new products are often an
 Concept definition - to consider specifications such as technical feasibility
and market potential. If you're planning a new product, you should consider
the design process now.

 Strategic analysis - to ensure your ideas fit into your business' strategic
plans.

 Concept development - to create a prototype product or pilot service.

 Test marketing and finalising the concept - to ensure your product or

 Product launch - the trickiest stage. Before setting a date you must
determine how to sell, promote and support your product or service.
Getting it right first time is essential. But any decisions to delay your launch
should be balanced against the danger that your competitors will beat you
to market.