NEW PRODUCT
DEVELOPMENT
Presented By -
Roll No. 31
What is a new product ?
• A product that opens an entirely new market
• A product that adopts or replaces an
existing product
• A product that significantly broadens the
market for an existing product
• An old product introduced in a new market
• An old product packaged in a different way
• An old product marketed in a different way
Types of new product
• Innovative products
• New product lines – to allow the firm to enter an
existing market
• Addition to product line – to supplement the firm’s
existing product line
• Improvements and revisions of existing product
• Repositioned products – existing products targets at
new market
• Cost reduction new product that provide similar
performance at lower cost
Why develop New Product ?
• To replace declining product
• To take advantage of new technology
• To defeat rivals
• To maintain/increase market share
• To keep up with rivals
• To maintain competitive advantage
• To fill gap in the market
New product development
• New product development is a process
which is designed to develop, test and
consider the viability of products which
are new to the market in order to ensure
the Growth or survival of the
organisation.
Stages in New product
development
• Idea Generation
• Idea Screening
• Concept development and testing
• Market strategy development
• Business Analysis
• Test marketing
• Commercialization
Idea Generation
• Idea generation is continuous, systematic
search for new product opportunities. It
involves delineating sources of new ideas
and methods for generating them.
• Ideas for new products can be obtained from
basic research using a SWOT analysis
(OPPORTUNITY ANALYSIS), Market
and consumer trends, company's R&D
department, competitors, focus groups,
employees, salespeople, corporate spies,
Idea Screening
Screening of products to spot good ideas and
drop poor ones as soon as possible
Ideas are check for technical feasibility,
financial viability and marketability
The business analysis the product to evaluate
its demand, marketability and profit potential
Given ideas rating according to marketing,
production and strategic factors
Concept testing
• Concept testing present the consumer with a
proposed product and measure attitudes and
intention at this early stage of development.
• Concept testing of prototypes can help avoid
costly mistakes.
Market Strategy Development
Includes development of three part strategy plan
1. Describe the market’s size, structure, and
behaviour, the planned product positioning, and the
sales, market share, and profit goals for first few
years.
2. Outlines the planned price, distribution strategy,
and marketing budget for the first year.
3. Describes thelong-run sales and profit goals and
marketing-mix strategy over time.
Business & financial Analysis
• Estimate likely selling price based upon
competition and customer feedback
• Estimate sales volume based upon size of
market
• Estimate profitability and breakeven point
Test Marketing
• Test marketing involves placing a product
for sale in one or more selected areas and
observing its actual performance under the
proposed marketing plan
Commercialization
• Commercialization involves implementing a total
marketing plan and full production
Launch the product
Produce and place advertisements and other
promotions
Fill the distribution pipeline with product
Critical path analysis is most useful at this stage
Reasons for failure of
launched products
Neglect of market research
Inaccurate market research
Poor marketing after launch
Poor distribution
Product performance below expectation
Market not ready for the products
Inadequate support for the market
Conclusion
NPD is a process which is design to
develop, test and consider the viability of
products which are new to the market in
order to ensure the growth or survival of
the organization.
Referances
• Marketing Management-
Philip Kotler