2. • Product innovation is the creation and
subsequent introduction of a good or
service that is either new, or improved on
previous goods or services of its kind.
3. TYPES OF NEW PRODUCTS
Categories Description Examples
New-to-the-world New both to the company Zipper, internet,
developing them and computer, tabs, iphone
marketplace use them. etc.
Line extensions New to the marketplace Colgate tooth powder,
but not to the company. mouthwashes etc.
Me-too products New to the company but Detergent powers like
not to marketplace. Rin, Wheel and others.
Product modification Existing product that LCD projectors-VPL-FE
have been slightly 4OSXGA and VPL-FX 4OXGA.
modified.
4. NEW PRODUCT DEVELOPMENT PROCESS
Idea Generation and Screening
Concept Development and Testing
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialization
5. NPD PROCESS
Step 1. Idea Generation
Internal sources
Customers
Competitors
Distributors
Suppliers
6. NPD PROCESS
Step 2. Idea Screening
Process to spot good ideas and drop poor ones
Criteria
Market Size
Product Price
Development Time & Costs
Manufacturing Costs
Rate of Return
7. NPD PROCESS
Step 3. Marketing Strategy Development
Part One - Overall:
Target Market Planned
Product Positioning
Sales & Profit Goals
Market Share Part Two - Short-Term:
Product’s Planned
Price Distribution
Marketing Budget Part Three - Long-
Term: Sales & Profit
Goals Marketing Mix
Strategy
8. NPD PROCESS
Step 4. Product Development & Testing
• Develop Product Ideas into
Alternative
Product Concepts
• Concept Testing - Test the
Product Concepts with Groups of
Target Customers
• Choose the best one
9. NPD Process
Step 5. Business Analysis
Step 6. Product Development
If Yes, Move
to Product
Developme
nt
If
No, Elimi
nate
Product
Business Analysis
Concept Review of Product
Sales, Costs, and
Profits
Projections to See
if They Meet
Company
Objectives
10. NPD PROCESS
Step.7 Commercialization
Design Factor Focus option Decision/dilemmas
Production Program In house Production Building/renting capacities creating
an effective supply chain preparing
production planes and schedules
setting up ways for quality controls
Outsourcing Identifying number of sources
Evaluating them based on their
supply capabilities Establish quality
criteria Contracting for timely
deliveries
11. Commercialization continue.
Design Factor Focus option Decision/dilemmas
Marketing Program Coverage Full vs. Limited
Timing Launch along with or before the
competitor
Geography Single or multiple regions
Positioning Emotions or rational benefits
Target market Demographic or psychographics
segmentation
Marketing Mix Strategy Product, price, promotion, place
and people.
12. PACKAGING
As a reference, color , form ,
format , revealing the content
of the product;
Provides information:
composition, mode of
employment , consumption
limits dangers;
Is utilitarian: ergonomics ,
storage adequate;
Features technical functions to
cool ;
Committed to a position .
13. There are four main types of innovation in packaging
Packaging innovation break- (new technology, new consumer
habits).
The innovative packaging technology- (new
technology, consumption patterns unchanged).
Packaging innovation behavior- (old technology, new
consumer habits).
Packaging innovation incremental- (older
technology, consumption patterns unchanged).
14. Commercialization Approaches and Influencing
Factors
Approach Suitable situation
Can invest heavily in physical assets.
Integrator Product enjoy a patent protection.
Potential partners are not developed.
Company has the financial, human and physical assets
necessary to manufacture the new product quickly.
Supplier base is so sophisticated
Vale attracted to brand is high.
Product life cycles are very short like that of disk drives.
Time to market is very critical.
Orchestrator
Breakthrough innovation not related to core business.
Company skilled at managing projects across several
different organizations.
15. Commercialization Approaches and Influencing
Factors continue..
Approach Suitable situation
Licensing for Royalty Technical risk of not functioning well
Customer acceptance doubtful, even if it functions
well.
The markets is new to the company
Strong intellectual property protection is available.
New brand is not critical for success of the
company.
Company has ability to protect intellectual property
rights and structure the right long-term deals.
16. POSITIONING
An effort to influence consumer perception of a brand or product relative to the
perception of competing brands or products. Its objective is to occupy a
clear, unique, and advantageous position in the consumer's mind.
Re-positioning involves changing the identity of a product, relative to the identity
of competing products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing
products, relative to the identity of your own product, in the collective minds of
the target market.
17. Associations of Major Brands
BRAND ASSOCIATION
Titan Gifting and warmth
Pepsi Young, vibrant and fun loving
Close-up White teeth, freshness and confident
Pepsodent Germ fighting action
5-Star Energy and Fun
Bajaj Vale for money
Apple Value through innovation feature
18. New Product Failures
Difficult Brand Name (Britannia)
When better substitute is available (Real value vaccumizer)
When ahead of customer readiness (Milkfood yoghurt)
When customer habits are hard to change (Kellog crispy
cereals)
When customer feel uneasy about the product (Amul slim
scoop)
