New Product Development Strategy

Slide 1: New Product Development Strategy 1 visit: www.studyMarketing.org

Slide 2: You can download this presentation at: www.studyMarketing.org Visit www.studyMarketing.org for more presentations on Marketing, Strategy, Innovation, and Branding 2 visit: www.studyMarketing.org

Slide 3: Key Steps in New Product Development 3 visit: www.studyMarketing.org

Slide 4: Key Steps in New Product Development Idea Generation Product Screening Concept Testing Business & Financial Analysis Product Development Test Marketing Commercialization 4 visit: www.studyMarketing.org

Slide 5: Idea Generation Idea generation is a continuous, systematic search for new product opportunities. It involves delineating sources of new ideas and methods for generating them. 5 visit: www.studyMarketing.org

Slide 6: Methods for Generating Ideas Dimensional Analysis lists all of the physical characteristics of a product type. Having obtained such a list, creativity can be triggered by asking questions such as: \"Why is the product this way?“, \"How could the product be changed?\" or \"'What would happen if one or more of the characteristics were removed?\" 6 visit: www.studyMarketing.org

Slide 7: Problem Analysis is a need-assessment technique designed to develop an inventory of consumer problems in a particular product or service category and to serve as a basis for new product or service ideas. 7 visit: www.studyMarketing.org

Slide 8: Benefit Structure Analysis determines what specific benefits and characteristics are desired by consumers within a particular product or service category and identifies perceived deficiencies in what is currently provided. 8 visit: www.studyMarketing.org

Slide 9: Scenario Analysis identifies opportunities by capitalizing on projected future environments and associated consumer needs. 9 visit: www.studyMarketing.org

Slide 10: Product Screening After the firm identifies potential products, it must screen them. In product screening, poor, unsuitable, or otherwise unattractive ideas are weeded out from further actions. 10 visit: www.studyMarketing.org

Slide 11: • Today, many companies use a new-product screening checklist for preliminary evaluation. • In it, firms list the new-product attributes considered most important and compare each idea with those attributes. • The checklist is standardized and allows ideas to be compared. 11 visit: www.studyMarketing.org

Slide 12: Concept Testing Concept testing presents the consumer with a proposed product and measures attitudes and intentions at this early stage of development. 12 visit: www.studyMarketing.org

Slide 13: Concept testing is a quick and inexpensive way of measuring consumer enthusiasm. It asks potential consumers to react to a picture, written statement, or oral description of a product. This enables a firm to determine initial attitudes prior to expensive, time-consuming prototype development. 13 visit: www.studyMarketing.org

Slide 14: Business & Financial Analysis Business and financial analysis for the remaining product concepts is much more detailed than product screening. 14 visit: www.studyMarketing.org

Slide 15: •Factors considered in business analysis stage : • Demand projections • Cost projections • Competition • Required investment • Profitability 15 visit: www.studyMarketing.org

Slide 16: Product Development Product development converts a product idea into a physical form and identifies a basic marketing strategy. 16 visit: www.studyMarketing.org

Slide 17: It involves product construction, packaging, branding, product positioning, and usage testing. 17 visit: www.studyMarketing.org

Slide 18: Test Marketing Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan. 18 visit: www.studyMarketing.org

Slide 19: The purpose is to evaluate the product and pretest marketing efforts in a real setting prior to a full- scale introduction. 19 visit: www.studyMarketing.org

Slide 20: Rather than inquire about intentions, test marketing allows actual consumer behavior to be observed. The firm can also learn about competitive reactions and the response of channel members. 20 visit: www.studyMarketing.org

Slide 21: After testing is completed, the firm is ready to introduce the product to its full target market. This is commercialization and corresponds to the introductory stage of the product life cycle. 21 visit: www.studyMarketing.org

Slide 22: Commercialization involves implementing a total marketing plan and full production. 22 visit: www.studyMarketing.org

Slide 23: Key Success Factors in New Product Development 23 visit: www.studyMarketing.org

Slide 24: An investigation of new product practices in 700 firms by Booz-Allen & Hamilton identified the existence of common characteristics in companies that were successful at product innovation 24 visit: www.studyMarketing.org

Slide 25: 1. Operating Philosophy Successful companies are more committed to growth through new products developed internally. 25 visit: www.studyMarketing.org

Slide 26: They are more likely to have had a formal new product process in place for a longer period of time than unsuccessful companies. They are more likely to have a strategic plan that includes a certain portion of company growth from new products. 26 visit: www.studyMarketing.org

Slide 27: 2. Organizational Structure Successful companies are more likely to house the new product organization in R&D or engineering and are more likely to allow the marketing and R&D functions to have greater influence on the new product process. 27 visit: www.studyMarketing.org

Slide 28: 3. The Experience Effect Experience in introducing new products enables companies to improve new product performance. 28 visit: www.studyMarketing.org

Slide 29: New product development costs conform to the experience curve: The more you do something, the more efficient you become at doing it. This experience advantage stems from the acquisition of a knowledge of the market and of the steps required to develop a new product. 29 visit: www.studyMarketing.org

Slide 30: 4. Management Style Successful companies appear not only to select a management style appropriate to immediate new product development needs but also to revise and tailor that approach to changing new product opportunities 30 visit: www.studyMarketing.org

Slide 31: An empirical research by Robert Cooper found three key factors that distinguish winning projects from the losers 31 visit: www.studyMarketing.org

Slide 32: three key factors for effective product development: three key factors Factor 1: A High-Quality New Product Process Factor 2: A Clear and Well- Communicated New Product Strategy for the Business Factor 3: Adequate Resources for New Products 32 visit: www.studyMarketing.org

Slide 33: Factor 1: A High-Quality New Product Process  Some of these success factors that top performers build into their new product processes include:  emphasizing the up-front predevelopment homework;  building in the voice of the customer throughout 33 visit: www.studyMarketing.org

Slide 34: Factor 1: A High-Quality New Product Process  demanding sharp, early product definition  having tough Go/Kill decision points where projects really do get killed  and highlighting quality of execution throughout 34 visit: www.studyMarketing.org

Slide 35: Factor 2: A Clear and Well- Communicated New Product Strategy for the Business  there are clear goals or objectives for the business's total new product effort; for example, what percentage of sales or profits new products will contribute to the business 35 visit: www.studyMarketing.org

Slide 36:  there are clearly defined arenas— specified areas of strategic focus, such as products, markets, or technologies —to give direction to the business's total new product effort 36 visit: www.studyMarketing.org

Slide 37:  the role of new products in achieving the business's goals and the new product strategy for the business are clearly communicated to all who need to know 37 visit: www.studyMarketing.org

Slide 38: Factor 3: Adequate Resources for New Products • In top-performing businesses, senior management has devoted the necessary resources—people and money, marketing and technical—to achieve the business's new product objectives 38 visit: www.studyMarketing.org

Slide 39: • R&D budgets are adequate— judged to be sufficient in light of the business's new product objectives 39 visit: www.studyMarketing.org

Slide 40: • the necessary people are in place and have their time freed up for new products. 40 visit: www.studyMarketing.org

Slide 41: Source of Reference: Robert Cooper, Winning at New Products: Accelerating the Process from Idea to Launch, Perseus Books Group. 41 visit: www.studyMarketing.org