new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief).

1. New Product
Development

2. Product
• A product is anything that can be offered by the
market to the customer to satisfy needs and wants.
• A product is a combination of
-Physical attributes
-Subjective attributes
Product
Tangible Intangible

3. New Product Development

4. Introduction
A new product is any product which is
perceived by the customer as being new.

5. Reasons for NPD
• Change the consumer
needs
• Technology
• Good Image

6. New-Product Development
Strategy
Acquisition
Research &
Development

7. Categories Of New Product
BOOZ, ALLEN & HARMILTON have
identified 6 categories of new products, such
as:
1: New to the world.
2: New to the product lines.
3: Additions to the existing product line.
4: Improvements & revisions of existing
products.
5: Repositioning.
6: Cost reductions.

8. New Product Failures
• Only10% of new products still on the market
and profitable after 3years.
• Failure rate for industrial products as high as
30%.
• Why?
• Overestimation of market size
• Design problems
• Incorrectly positioned, priced, or advertised
• Pushed despite poor marketing research findings
• Development costs Competition

9. Process Of New Product
Development

10. New Product Development Process

11. Step 1- Idea Generation
New product ideas come from interacting with
various groups & from using creativity generation
techniques like BRAINSTORMING, etc.
External Sources
Customer Questions &
Complaints
Distributor Feed backs
Compotators activates e.g.
their Ads as a clue
Internal Sources
R&D Cell
Employees feed backs

12. Step 2: Idea Screening
• Purpose - To drop poor ideas as early as
possible.
• Thus an idea committee is formed to
classify the proposed ideas into 3
categories:
• Promising
• Marginal
• Rejects

13. Selection Decision Outcomes
Accept Reject
Successful
Unsuccessful
Correct
Decisions
Reject
Errors
Accept
Error
Correct
Decision

14. Step 3: Concept Development & Testing
A concept is an elaborated version of a product idea expressed in
meaningful consumer terms.
Example: Following concepts can came across:
Concept 1: Fruit Juice For Young & Grown Ups As A Funny Thirst
Quenching Item.
Concept 2: Fruit Juice For Children As A Health Supplements.
Concept 3: For Adults As A Nutritional Energy Supplements.

15. Step 4: Business Analysis
Main aim- To find out whether the product satisfies
the company objective or not..
Analysis
Profit
Cost
Sales

16. Step 5: Prototyping & Market
Testing
The product idea can be translated into
technically & commercially feasible
product????
Major
Testing
Alpha
Testing
Beta
Testing

17. Step 6: Technological
Implementation
Involves-
• the technological relevance of
current technologies
• the firm’s knowledge &
experience of the techniques
• manpower in handling those
technologies etc.

18. Step 7: Commercialization
Company takes decision like to go in for large scale
production
marketing of the new product.
The important factors to which strategists should
focus here are:
Market entry timing period.
Whether to lunch the product in a single locality, a
region, several regions, nationally or internationally,
i.e. geographic strategy.
To whom the new product should target for i.e.
targeting & segmenting.