New product development

1. NEW PRODUCT
DEVELOPMENT

2.  Comprise of series of steps which starts
from idea generation.
 After defining the overall area of business
development, an effort is directed at
concept generation & market structure
identification.
 If go/no screening criteria, is met then
advertising is developed & the product
formulation specified & tested.
 If these results meet standards, pre-test
market & test marketing activities are
undertaken.
 If successful, the product the product is
launched.

3. PROCESS
Idea Generation
Market Structure
Analysis
Sales Potential
Concept
Screening
First Block

4. Advertising
Development
Product
Formulation
Testing The
Product
Commercialization
& final Launch

5. 1. Concept Generation & Market
Str. Identification
 Ideas may originate from various sources
which may be direct or indirect -
1. Sales Personnel
2. Employees Suggestion
3. Researchers
4. Competitive Products
5. Consultants
6. Consumer Feedback etc.

6. 2. Market Structure Analysis
 Starts with matching consumer’s market
perception with realities of market & trying to
move the process further for converting them
in real terms .
 Helps in finding out the distance of new
opportunity from ideal point.
 In order to supplement the consumer’s
perception mapping, a fact book or business
review document is made outlining all
available knowledge gathered till now.

7. 3. Sales Potential
 Here, potential of new product entry into
the market structure is estimated.
 Techniques used such as Delphi
technique, Executive judgment etc. are
used.
 Such techniques help to develop a base
for future in numerical terms which gives
a budgetary ideas such as costing, sales
forecasts etc.

8. 4. Concept Screening
 Ideas collected are scrutinized & eliminate
those inconsistent with the product
policies & objectives of the firm.
 Screening criteria are established as
evaluative standards so that expectations
could be matched with reality.
 Criteria may be set as-market size,
market growth, positioning, distribution
features etc.

9. 5. Advertising Development
 This strategy helps in getting the selling
message flow down in the market.
 The advertising needs to be appealing as
it has to differentiate itself in eyes of the
customer.
 Here, 3 documents are prepared in order
to give the result of this step-strategy
statement, consumer profile & an end
benefit phycology statement.

10. 6. Product Formulation
 While there is advertisement policy discussion
simultaneously there is start of product
development.
 Here, idea on paper is turned into product on
hand.
 This stage is also known as “Technical
Development.”
 Work is divided in 3 stages-
1. Establishing development projects for each
product
2. Building the product with the changes, if
specified
3. Completing the manufacturing work &
sending for testing

11. 7. Testing the Product
 This stage is for testing the feasibility &
accuracy of product performance.
 The objective of this stage is to know
whether the product meets the technical &
commercial specifications developed at
various above stages.
 This stage is also divided in 3 Tests-

12. 1. Concept Testing- Conducted before
also but here is conducted again. Here,
customer’s reactions to the idea are
measured. This helps the management t
form early judgments about the
success/failure of their ideas.

13. 2. Product Prototype Testing-The
prototype is developed as the end result of
a product development process. Product
testing is done to assess proper product
performance & minimize the risk at full
launching of the product. In fact, it also
helps to identify the most productive
market segments.

14. 3. Test Marketing- Here, the product is
introduced in selected areas often at
different prices in different areas. These
test provide the management an idea of
amount & elasticity of demand of their
product, competition it is going to face,
sales volume & profit level to be achieved.
This is a costly affair & its time consuming
but still it provides useful information for
better planning of the full scale effort.

15. 8. Commercialization & Final
Launch
 Finally after a long process the product is
submitted in the market & thus its life
cycle commences from here .This is the
most critical stage & thus must be
carefully handled. However, new products
should be launched in the market step by
step in order to avoid short supply of
product due to initial gaps in production &
distribution.