New Product Development
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
9,728
On Slideshare
9,728
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
509
Comments
0
Likes
5

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. NEW PRODUCTDEVELOPMENT
  • 2. Contents: What is new product development?? Challenges in NPD Overcoming these challenges NPD Strategies New product failures Stages in NPD Conclusion
  • 3. What is New ProductDevelopment?? New product development (NPD) is theterm used to describe the complete process ofbringing a new product to market. A product is a set of benefits offeredfor exchange and can be tangible (thatis, something physical you can touch) orintangible (like a service, experience, orbelief).
  • 4. Challenges in New ProductDevelopmentNew Product development challenges fall intothree major categories:-• Definition of product specifications• Time and resources issues• Interactions of the Product Developmentgroup with the rest of the company
  • 5. How to overcome theseChallenges??• Assess the projects financial value before thedevelopment starts.• Prioritize projects according to clear criteria.• Let Marketing professionals define the targetmarket and specify the product upfront.• Involve all the functions of the companies at theproduct selection stage.• Align project targets and resources.
  • 6. New Product Development Strategy How do companies develop and market new products?  Come up with own ideas.  Brand new products  Product improvements & modifications  Acquire companies, patents, licenses.  Eg: Tata nano car
  • 7. New-Product Failures• Only 10% of new consumer products succeed in the long run.• Why do most products fail? – Don’t fulfill a real need or want – Overestimation of market size – Design problems that compromise functionality – Incorrectly positioned, priced or promoted (4 P’s) – Pushed despite poor marketing research findings – Development costs go over budget – Competitive response
  • 8. Major Stages in New-ProductDevelopment Process
  • 9. Idea Generation Where do ideas come from?• Internal sources:- – Company employees at all levels: “Intrapraneuring”• External sources :-  Customers  Competitors  Distributors  Suppliers  Outsourcing partners
  • 10. Idea Screening Keep the good ideas and drop the poor ones. Criteria :-  Market Size  Product Price  Development Time & Costs  Manufacturing Costs  Rate of Return
  • 11. Concept Development andTesting: 1.Develop a working description and visualization of the product idea and concept. 2. Concept Testing - Test the Product Concepts with Groups of Target Customers 3. Choose the Best One
  • 12. Marketing StrategyDevelopment: Part One - Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share Part Two - Short-Term: Product’s Planned Price Distribution Marketing Budget Part Three - Long-Term: Sales & Profit Goals Marketing Mix Strategy
  • 13. Business Analysis  Assess economic viability of the concept. Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives If No, Eliminate Product Concept If Yes, Move to Product Development
  • 14. Product Development Develop concept into physical product prototype. Large jump in investment – “point of no return”. Test and refine prototype until product passes consumer and legal scrutiny.
  • 15. Test Marketing: Standard Test Market Controlled Test Market Full marketing campaign in a small number of A few stores that have representative cities. agreed to carry new products for a fee. Simulated Test Market Test in a simulated shopping environmentAfter test marketing the “Go Active” to a sample ofmeal (an adult happy meal) in 150 consumers.markets in Indiana, McDonald’s decidedto sell it across the U.S.
  • 16. Commercialization:• Broad launch of product if market test results are positive.• Timing of launch is important.• Potential Rollout plans – Local – Regional – National – International – “Wider Test Market”
  • 17. Conclusion Implementation of a NPD process with stageshas helped businesses focus their New Productinvestment on the most potentially rewardingprojects. It has shortened the time between idea andrevenue by orchestrating the complex set ofactivities required for the commercial success ofnew products.