NPD

1. New Product develoPmeNt

2. Definition
 New product development (NPD) is the
complete process of bringing a new product to
the market till its consumption & feedback
from the end user.
 It may be a Consumable product, service or
idea.

3. Definition
 New product development (NPD) is the
complete process of bringing a new product or
service to market.
 New product development may be done to
develop an item to compete with a particular
product or may be done to improve an already
established product.

4. What is Product Development
 Product development means making changes
in the size, design, color, shape,
characteristics, packing etc. of the product.
 It may include addition of a new product line,
addition of a new product item in a particular
product line, elimination of existing product
or product line & changes in the size, color,
design, packing, characteristics, and prices of
the product & discontinuation of the
unprofitable item or product line.

5. Agenda
 Idea Generation
 Idea Screening
 Market Research
 Concept Testing
 Prototype Development
 Test Marketing
 Product Launch

6. Why New Products?
 New product development is essential to any
business that must keep up with market trends
and changes.
 Approximately one-third of the revenue a
business generates is coming from products
they did not sell five years ago
 Changing environment creates new demands
and needs

7. New Products necessity
 A way of getting new and keeping old
customers
 Effective way of obtaining a competitive
advantage
 Source of growth and excitement

8. New Product Categories
 New to the world products
 New product lines
 Product line extensions
 Improvements and revisions to existing
products
 Repositioning's
 Cost reductions

9. Product Development Process
Idea
Generation
Concept
Testing
Test
Marketing
Prototype
Development
Product
Launch
Idea
Screening
Market
Research

10. Idea Generation
The new product development process starts
with the search for ideas. Consumer’s problems
are the most effective ground for the generation
of new product ideas. New product ideas come
from interacting with various groups.
An important source of new product idea is
customers needs and wants.

11. Contd.
 There are two types of source of idea
generation
 Internal Source
 External Source

12. Idea Screening
The purpose of screening stage is to drop poor
ideas as early as possible. Thus an idea
committee is formed to classify the proposed
ideas.
In screening ideas, the companies normally
face 2 serious errors & they must try to avoid
these mistakes as far as possible, those 2
serious errors are: DROP ERROR & GO
ERROR. Let’s clarify:

13. Contd.
DROP ERROR: error which occurs when the
company rejects one really good idea having
potential.
GO ERROR: error which occurs, when the
company permits & facilitates a poor idea to
move onto further development stages &
commercialization.

14. Marketing
 Very important to product development success
 Key to successful marketing is imaginative,
effective, creative communication
 Find a need and fill it.
 Mutually beneficial exchange relationships

15. Marketing Strategies
 Increase the number of customers
 Increase the average transaction
 Increase the frequency of repurchase

16. Market Research
 Who is my target audience?
 Are there enough members of this target group to
make the business worthwhile?
 How large is the potential market and how much of
that potential market I can capture?
 Who is my competitor and what would make
someone choose my product over their current?
 Does the product meet a genuine need.
 Does the market accept the new product.

17. Contd.
Determine opportunity
 Segment size
 Annual usage potential
 Analyze annual growth rate
 Margin
Evaluate competition
 Strengths/Limitations
 Implications

18. Concept Testing
Concept testing is the process of using
quantitative and qualitative methods to
evaluate consumer response to a product idea
prior to the introduction of a product to the
market.
Concept testing helps the company to choose the
best among the alternative product concepts.

19. Concept Testing
Determine
 Critical success factors
 Financial objectives
 Marketing mix strategies
 Product, Pricing, Promotion, Placement
 Marketing plan initiatives
 Activity, Budget, Timing

20. Prototype Development
 Prototype development is the process of
preparing a device, technique or system that
demonstrates a solution to a problem.
For-
 1) Experimentation and learning in the
product development process
 2) Testing and proofing product concepts
 3)Communicating concepts to the product
development team members, management and
customers.

21. Test Marketing
 Test marketing is an experiment conducted in
a field laboratory ( test market) comprising of
actual stores and real-life buying situations,
without the buyers knowing they are
participating in an evaluation exercise.
 Test marketing duration may few weeks to
several months.

22. Promotion and Product Launch
 Publicity
 Trade journals
 Conferences
 Personal selling
 Through any other promotion tools
Advertising ,Direct marketing, Event and
Activity, Celebrity Endorsement

23. Reasons For New Product Failures
 Poor marketing research
 Technical problems
 Insufficient marketing efforts
 Bad timing
 The wrong group was targeted.
 Unrealistic forecast.
 Insufficient level of awareness.