Brand Academy provides details brand analysis, research, article and insights for free. Contact us : brandsmentor@gmail.com https://www.facebook.com/1stbrandsacademy Major Stages in New Product Development Major Stages in New Product Development Idea generation: systematic search for new ideas Internal sources: brainstorming External sources: customers, competitors, distributors and suppliers Idea screening: identify good ideas and drop poor ones Usefulness to consumers Good for company Fit with objectives and strategies Have the resources Add value Major Stages in New Product Development Concept development: detailed version of the product concept in meaningful consumer terms Concept testing: testing new-product concepts for consumer appeal Marketing strategy: initial strategy for product concept: Target market, positioning, and sales, market share, and profit goals Price, distribution, and marketing budget Strategy statement, long-run sales, profit goals, and marketing mix Major Stages in New Product Development Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives. Product development: developing the product concept into a physical product Large investment Building a prototype Testing for safety, durability, and acceptability Test marketing: testing the product in more realistic market settings Determine the target market profile Major Stages in New Product Development Assess consumer acceptability, trial, repeat purchase rate Evaluate trade reception and distribution penetration Design effective media plans Standard test markets Controlled test markets Simulated test market

3. Major Stages in New Product Development

4. Major Stages in New Product Development
• Idea generation: systematic search for new ideas
– Internal sources: brainstorming
– External sources: customers, competitors, distributors and
suppliers
• Idea screening: identify good ideas and drop poor ones
–
–
–
–
–
Usefulness to consumers
Good for company
Fit with objectives and strategies
Have the resources
Add value

5. Major Stages in New Product Development
• Concept development: detailed version of the product
concept in meaningful consumer terms
• Concept testing: testing new-product concepts for consumer
appeal
• Marketing strategy: initial strategy for product concept:
– Target market, positioning, and sales, market share, and profit
goals
– Price, distribution, and marketing budget
– Strategy statement, long-run sales, profit goals, and marketing
mix

6. Major Stages in New Product Development
• Business analysis: review of sales, costs, and profit
projections to determine if they meet company objectives.
• Product development: developing the product concept into a
physical product
– Large investment
– Building a prototype
– Testing for safety, durability, and acceptability
• Test marketing: testing the product in more realistic market
settings
– Determine the target market profile

7. Major Stages in New Product Development
– Assess consumer acceptability, trial, repeat purchase rate
– Evaluate trade reception and distribution penetration
– Design effective media plans
• Standard test markets
• Controlled test markets
• Simulated test market
• Commercialization: introducing a new product into the market
– Introduction timing
– Market rollout or full-scale introduction
• Sequential product development
• Simultaneous (team-based) product development

8. Product Life-Cycle Strategies
• Product life cycle (PLC): the course of a product’s sales and
profits over its life

9. Product Life-Cycle Strategies

10. Characteristics:
Introduction
Grow th
Maturity
Decline
Sales
Costs
Low
High cost
per customer
Negative
Innovators
Few
Rapidly rising sales
Average cost
per customer
Rising profits
Early adopters
Grow ing number
Peak
Low cost
per customer
High profits
Middle majority
S
table number
Declining sales
Low cost
per customer
Declining profits
Laggards
Declining number
Create product
aw areness and trial
Maximize market
share
Maximize profit &
defend market share
Reduce expenditure
& milk brand
Product
Offer basic product
Price
Use cost-plus
Build selective
distribution
Build aw areness
early adopters/ dealers
Heavy sales promotion
to entice trial
Diversify brand and
models
Price to match or
best competitors
Build more
intensive distribution
S
tress brand differences
and benefits
Increase to encourage
brand sw itching
Phase out w eak
items
Cut price
D istribution
Offer product
extensions, service
Price to penetrate
market
Build intensive
distribution
Build aw areness &
interest mass market
Reduce promotion due
to heavy demand
Profits
Customers
Competitors
Marketing objectives:
Strategies:
Advertising
Sales promotion
S
elective; phase out
unprofitable outlets
Reduce to level needed
to retain hard-core loyals
Reduce to minimal
level