Npd

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Npd

  1. 1. DEFINITION <ul><li>The development of original products, product improvements, product modifications and new brands through the firm’s own R&D efforts. </li></ul>
  2. 2. CATEGORIES OF NEW PRODUCTS <ul><li>Changes to Augmented Product </li></ul><ul><li>e.g. Zen Estillo </li></ul><ul><li>Core Product Revision </li></ul><ul><li>e.g. McDonald’s Aloo Tikki Burger </li></ul><ul><li>Line Extensions </li></ul><ul><li>e.g. BSA’s eBikes </li></ul><ul><li>New Product Lines </li></ul><ul><li>e.g. ITC’s Vivel Shampoo </li></ul><ul><li>Repositionings </li></ul><ul><li>e.g. Sugar Free </li></ul><ul><li>Completely New </li></ul><ul><li>e.g. Apple iPod </li></ul>High Low High Low Newness to Market Newness to Company
  3. 3. NEW PRODUCT LAUNCH - CHALLENGES <ul><li>Fragmented markets </li></ul><ul><li>Costliness in the development process </li></ul><ul><li>Faster required development time </li></ul><ul><li>Shorter Product Life-cycle </li></ul><ul><li>Failure Rate of 50% -75% </li></ul>
  4. 4. FAILED ATTEMPTS <ul><li>McDonald’s Deluxe line </li></ul><ul><li>Premier Cigarette </li></ul><ul><li>New Coke by COCA COLA </li></ul><ul><li>Battlecruiser 3000AD by TAKE TWO </li></ul><ul><li>The Ford Edsel </li></ul><ul><li>Levi’s Type 1 Jeans </li></ul><ul><li>…… .and many more </li></ul>
  5. 5. WHY? <ul><li>Hard Luck </li></ul><ul><li>Improper Development Process </li></ul>
  6. 6. DEVELOPMENT PROCESS <ul><li>Idea Generation </li></ul><ul><li>Idea Screening </li></ul><ul><li>Concept Development & Testing </li></ul><ul><li>Marketing Strategy Development </li></ul><ul><li>Business Analysis </li></ul><ul><li>Product Development </li></ul><ul><li>Market Testing </li></ul><ul><li>Commercialization </li></ul>
  7. 7. IDEA GENERATION <ul><li>10 Ways To Get New Product Ideas </li></ul><ul><li>1. Solve an existing problem for people. 2. Find out what's the current hot trend. </li></ul><ul><li>3. Improve a product that is already on the market. 4. Create a new niche for a current product. </li></ul><ul><li>5. Add on to an existing product. 6. Reincarnate an older product. 7. Ask your current customers. 8. Combine two or more products together to create a new one. 9. Survey the people who visit your web site. 10. Create a new market for your existing product. </li></ul>
  8. 8. IDEA SCREENING <ul><li>Each idea should be reviewed by an idea committee </li></ul><ul><li>Two Types of Errors </li></ul><ul><li>DROP -error </li></ul><ul><li>GO -error </li></ul>Overall probability of success Probability of technical completion Probability of commercialization Given technical completion Probability of economic success given commercialization = * *
  9. 9. CONCEPT DEVELOPMENT & TESTING <ul><li>Concept Development </li></ul><ul><li>Concept Testing </li></ul><ul><li>Conjoint Analysis </li></ul>
  10. 10. MARKETING STRATEGY DEVELOPMENT <ul><li>Target Market’s size, structure and behavior </li></ul><ul><li>Planned price, distribution strategy & marketing budget </li></ul><ul><li>Long-run sales and profit goals & marketing-mix strategy </li></ul>
  11. 11. BUSINESS ANALYSIS <ul><li>Estimating Total Sales </li></ul><ul><li>Estimating Costs and Profits </li></ul>
  12. 12. PRODUCT DEVELOPMENT <ul><li>Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product. </li></ul>
  13. 13. MARKET TESTING <ul><li>Consumer-Goods Market Testing </li></ul><ul><ul><li>Sales-Wave Research </li></ul></ul><ul><ul><li>Simulated Test Marketing </li></ul></ul><ul><ul><li>Controlled Test Marketing </li></ul></ul><ul><ul><li>Test Markets </li></ul></ul><ul><li>Business-Goods Market Testing </li></ul>
  14. 14. COMMERCIALIZATION <ul><li>When (Timing) </li></ul><ul><li>First Entry </li></ul><ul><li>Parallel Entry </li></ul><ul><li>Late Entry </li></ul><ul><li>Where (Geographic Strategy) </li></ul><ul><li>To Whom (Target-Market Prospects) </li></ul><ul><li>How (Introductory Market Strategy) </li></ul>
  15. 15. NEW PRODUCT DEVELOPMENT DECISION PROCESS 1. Idea Generation Is the idea worth considering DROP 3. Concept Development & Testing Can we find a good concept for the product that consumers say they would try 5. Business Analysis Will this Product meet our Profit goal 7. Market Testing Have product sales met expectations 2. Idea Screening Is the idea compatible 4. Marketing Strategy Development Can we find a cost- Effective affordable marketing strategy 6. Product Development Have we developed a technically & commercially a sound product 8. Commercialization Are product sales meeting expectations YES YES YES YES YES YES YES NO NO NO NO NO NO NO NO Would it help to modify the product or marketing program NO YES Should we send the idea back for project development NO YES

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