This video explores the 8 stages of product development. As well, it helps identify what we mean by 'product process' and where the development process fits into the Marketing Mix and also explains about diffusion process.

1. Managing New Product Process &
Diffusion of Innovation
Shruti Kulkarni
6032

2. Managing New Product Process -
Managing new product process is a task taken by the company to introduce newer
products in the market. Regularly there will arise a need in the business for new
product development. Existing products may be technologically outdated, So there
are different segments to target or to cannibalize an existing product. In such cases,
New product development is the answer for the company.
This process includes the complete journey from generating the initial idea to bringing
the product to market.
By setting out the steps involved, and sticking to them, Our Product development will
become more focused and flexible approach that can be adapted for all different
types of products and services.
So the eight simple steps are as follows-

3. 1. Idea Generation
2. Idea Screening
3. Concept Development & Testing
4. Business Analysis
5. Product Development
6. Test Marketing
7. Commercialisation
8. Launch

4. 1. Idea Generation
The development of a product will start with the idea generation concept.
Ideas can, and will come, from many different directions.
The best place to start is with a SWOT analysis, (Strengths, Weaknesses, Opportunities and
Threats), which incorporates current market trends.
This can be used to analyse our company’s position and find a direction that is in line with
our business strategy.
In addition to this business-centred activity, are methods that focus on the customer’s
needs and wants. This could be:
❏ Undertaking market research
❏ Listening to suggestions from our target audience – including feedback on our current
products’ strengths and weaknesses.

5. 2. Idea Screening
This step is crucial to ensure that unsuitable ideas, for whatever reason, are rejected as
soon as possible.
Ideas need to be considered objectively, ideally by a group or committee.
Specific screening criteria need to be set, looking at ROI, affordability and market potential.
These questions need to be considered carefully, to avoid product failure after
considerable investment down the line.

6. 3. Concept Development & Testing
You have an idea and it’s passed the screening stage. However, internal opinion isn’t
the most important. We need to ask the people that matter – our customers.
Using a small group of our true customer base – those that convert – the idea need to
be tested to see their reaction. The idea should now be a concept, with enough in-
depth information that the consumer can visualise it.
Do they understand the concept?
Do they want or need it ?
This gives a chance to develop the concept further, considering their feedback, but
also to start thinking about what your marketing message will be.

7. 4. Business Analysis
Once the concept has been tested and finalised, a business case needs to be put together
to assess whether the new product/service will be profitable.
This should include a detailed marketing strategy, highlighting the target market, product
positioning and the marketing mix that will be used.
This analysis needs to include: whether there is a demand for the product, a full appraisal
of the costs, competition and identification of a break-even point.

8. 5. Product Development
If the new product is approved, it will be passed to the technical and marketing
development stage. This is when a prototype or a limited production model will be
created. This means it can be investigated, exact design & specifications and any
manufacturing methods, but also gives something tangible for consumer testing, for
feedback on specifics like look, feel and packaging for example.

9. 6. Test Marketing
Test marketing (or market testing) is different to concept or consumer testing, in that it
introduces the prototype product following the proposed marketing plan as whole
rather than individual elements.
This process is required to validate the whole concept and is used for further refinement of
all elements, from product to marketing message.

10. 7. Commercialisation
When the concept has been developed and tested, final decisions need to be made to
move the product to its launch into the market. Pricing and marketing plans need to be
finalised and the sales teams and distribution briefed, so that the product and company
is ready for the final stage.

11. 8. Launch
A detailed launch plan is needed for this stage to run smoothly and to have maximum
impact. It should include decisions surrounding when and where to launch to target
primary consumer group. Finally in order to learn from any mistakes made, a review of
the market performance is needed to access the success of the project.
New product development can be made much simpler and focused, with a higher
likelihood of success, by following these above steps.

12. Diffusion of Innovation -
The diffusion process is concerned with how innovations spread, that is, how they are
assimilated within a market.
More precisely, diffusion is the process by which the acceptance of an innovation is
spread by communication to members of a social system over a period of time.
This definition includes the four basic elements of the diffusion process- The
Innovation, The Channels of Communication, The Social System, and Time.

13. 1. Innovation
Various approaches have been taken to define new product: Firm oriented, Product
oriented, Market oriented, Consumer oriented.
2. The Channels of Communication
How quickly innovation spread depends on channel on communication. There are two
sources for communication: Impersonal and Interpersonal
3. The Social System
It is a physical, social or cultural environment in which people belong and within which
they function: It can be of two type : Traditional social systemTime. Modern social
system

14. 4. Time
Backbone of diffusion process. It pervades the study of diffusion in three distinct ways
1. The amount of purchase time 2. The identification of adopter categories 3. The rate
of adoption.

15. Thankyou