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NEW PRODUCT DEVELOPMENT STRATEGY

NEW PRODUCT DEVELOPMENT STRATEGY

Firm can develop product on two aspects

1. Acquisitions –buying the whole company.

2. New product development-in company's own R&D.

Both companies and consumers are happy with the new product.

 But 90% of the product fails

Reason:

1. Overestimating the market size

2. Poor design of the product

3. Wrong position in wrong place at wrong time.

4. Poor advertisement.

To create successful product companies must understand its market requirements and competitors to deliver better value to the customer.

To resolve it new product planning and product development process is required.



NEW PRODUCT DEVELOPMENT PROCESS:

STEP 1: IDEA GENERATION-

·         Systematic search for new ideas through internal and external sources.

·         Internal sources- includes R&D, executives, manufacturing and sales staff.

·         External sources-customer analysis, consumers, competitors, distributors, suppliers,agencies.

STEP2: IDEA SCREENING

·         Screening good ideas and dropping the poor ones.

·         Idea is to source best ideas that is more attractive with low production cost.

STEP: 3:CONCEPT DEVELOPMENT AND TESTING

·         Its about getting feedback from the employees, customers, distributors.

·         Usually targeted the targeted groups where the product is displayed  or idea is displayed in order to get feedback from the customer about the proceedings.

STEP:4:MARKET STRATEGY FORMULATION

After testing a new marketing strategy is developed in order to introduce the product.

1. Identifying the targetmarket, size, structure, behaviour,positioning,market share, profit goals for the first year.

2. Planned price and distribution strategy, marketing budget.

3. Long run sales ,profit goals, marketing mix strategy overtime.

STEP: 5:BUSINESS ANALYSIS:

·         Its about reviewing the cost and profit projection for the new product.

·         Whether the is developed according to companies objectives.

·         Looking into history of similar products, sales ,profit and market attractiveness.

·         Estimating the cost associated with new product development

STEP: 6:PRODUCT DEVELOPMENT:

·         Bring the concept into physical form

·         R&D will develop new products based on concept.

·         Testing of product is done on regular basis whether the product meets the customer requirements.

·         Product undergo different test to perform effectively and efficiently.

STEP:7:TEST MARKETING:

·         Product and marketing programme are introduced into real life situation.

·         This is done before commercialization.

·         Usually targeted to small focus groups

TEST1.STANDARD TEST MARKET

-Conducting marketing campaign

-Surveys

-Test analysis

TEST2. CONTROLLED TEST MARKET

-Identifying the behaviour people.

-customer response towards the new product is measured.

-individual customer information are stored for future purpose.

TEST:3:SIMULATED TEST MARKET:

To identify whether customer are able to identify the product when displayed.

Cost low ,used widely, reach of competition

STEP: 8:COMMERCIALIZATION

·         launching new pct into market.

·         Launching time, place should be considered.

 



 

  

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