New product development stages & plc by brands academy

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Major Stages in New Product Development
Major Stages in New Product Development
Idea generation: systematic search for new ideas
Internal sources: brainstorming
External sources: customers, competitors, distributors and suppliers

Idea screening: identify good ideas and drop poor ones
Usefulness to consumers
Good for company
Fit with objectives and strategies
Have the resources
Add value

Major Stages in New Product Development
Concept development: detailed version of the product concept in meaningful consumer terms
Concept testing: testing new-product concepts for consumer appeal
Marketing strategy: initial strategy for product concept:
Target market, positioning, and sales, market share, and profit goals
Price, distribution, and marketing budget
Strategy statement, long-run sales, profit goals, and marketing mix

Major Stages in New Product Development
Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives.
Product development: developing the product concept into a physical product
Large investment
Building a prototype
Testing for safety, durability, and acceptability
Test marketing: testing the product in more realistic market settings
Determine the target market profile

Major Stages in New Product Development
Assess consumer acceptability, trial, repeat purchase rate
Evaluate trade reception and distribution penetration
Design effective media plans
Standard test markets
Controlled test markets
Simulated test market

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New product development stages & plc by brands academy

  1. 1. Major Stages in New Product Development
  2. 2. Major Stages in New Product Development • Idea generation: systematic search for new ideas – Internal sources: brainstorming – External sources: customers, competitors, distributors and suppliers • Idea screening: identify good ideas and drop poor ones – – – – – Usefulness to consumers Good for company Fit with objectives and strategies Have the resources Add value
  3. 3. Major Stages in New Product Development • Concept development: detailed version of the product concept in meaningful consumer terms • Concept testing: testing new-product concepts for consumer appeal • Marketing strategy: initial strategy for product concept: – Target market, positioning, and sales, market share, and profit goals – Price, distribution, and marketing budget – Strategy statement, long-run sales, profit goals, and marketing mix
  4. 4. Major Stages in New Product Development • Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives. • Product development: developing the product concept into a physical product – Large investment – Building a prototype – Testing for safety, durability, and acceptability • Test marketing: testing the product in more realistic market settings – Determine the target market profile
  5. 5. Major Stages in New Product Development – Assess consumer acceptability, trial, repeat purchase rate – Evaluate trade reception and distribution penetration – Design effective media plans • Standard test markets • Controlled test markets • Simulated test market • Commercialization: introducing a new product into the market – Introduction timing – Market rollout or full-scale introduction • Sequential product development • Simultaneous (team-based) product development
  6. 6. Product Life-Cycle Strategies • Product life cycle (PLC): the course of a product’s sales and profits over its life
  7. 7. Product Life-Cycle Strategies
  8. 8. Characteristics: Introduction Grow th Maturity Decline Sales Costs Low High cost per customer Negative Innovators Few Rapidly rising sales Average cost per customer Rising profits Early adopters Grow ing number Peak Low cost per customer High profits Middle majority S table number Declining sales Low cost per customer Declining profits Laggards Declining number Create product aw areness and trial Maximize market share Maximize profit & defend market share Reduce expenditure & milk brand Product Offer basic product Price Use cost-plus Build selective distribution Build aw areness early adopters/ dealers Heavy sales promotion to entice trial Diversify brand and models Price to match or best competitors Build more intensive distribution S tress brand differences and benefits Increase to encourage brand sw itching Phase out w eak items Cut price D istribution Offer product extensions, service Price to penetrate market Build intensive distribution Build aw areness & interest mass market Reduce promotion due to heavy demand Profits Customers Competitors Marketing objectives: Strategies: Advertising Sales promotion S elective; phase out unprofitable outlets Reduce to level needed to retain hard-core loyals Reduce to minimal level

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