Development of Product

1. Development of Product and
Brand Strategy

2. Product Development
New Product Development Strategy
- A firm can obtain new products in two ways
1. Acquisition
2. New Product Development Efforts
- By new product we mean, original products, product improvements, product modifications and
new brands that the firm develops through its own research & development efforts.
- New products are important to both customers and marketers who serve them. For customers,
they bring new solutions and variety to their lives. For companies, new products provide new
ways to connect with customers as they adapt their buying to the changing economic times.
- Innovation of new product can be expensive and very risky, New products face tough odds, it is
estimated that 80% of all new products fail dramatically. Each year, companies lose an estimated
$20 billion dollars on failed food products alone.
Why do new products fail?

3. New product Development process
• Idea Generation
- Internal Idea Generation
- External Idea Generation
• Idea Screening
• Concept Development and Testing
- Concept Development
- Concept Testing
• Marketing Development Strategy
• Business Analysis
• Product Development
• Test Marketing
• Commercialization

4. Idea Generation
• New-Product Development starts with idea generation
• Major sources of new product ideas include internal sources and external sources such as customers, competitors, distributors and
suppliers and others.
• Internal Idea Sources
- using internal sources, the company can find new ideas through formal research and development. Some companies have
developed successful “intrapreneurial” programs that encourage employees to think up and develop new product.
• External Idea Sources
- Companies can also obtain good new-product ideas from any of number of external sources. For example, distributors and
suppliers.
a. Distributors are close to the market and can pass along information about consumer problems and new product possibilities.
b. Suppliers can tell the company about new concepts, techniques and materials that can be used to develop new products.
c. Competitors are another important source
Other Idea sources include trade magazines, marketing research firms, universities and commercial laboratories and inventors.
Perhaps and most important source of all is Customers themselves.

5. Idea Screening
• While the purpose of idea generation is to create large number of
ideas. The purpose of idea screening is to reduce ideas that are not
that profitable.
We can use the R-W-W (real, win, worth it)
First, is it real
Second can we win?
Third is it worth doing?

6. Concept Development and Testing
• Concept Development – Marketers must develop a concept for the
new products and find out which concept is attractive to customers.
• Concept Testing calls for testing new-product concepts with groups of
target consumers.

7. Marketing Strategy Development
• Marketing strategy statement consists of three parts.
- First part describes the target market; the planned value
proposition; and the sales, market share and profit goals.
- The second part of the Marketing Strategy statement outline the
products planned price, distribution, and marketing budget
- The third part of the marketing strategy statement describes the
planned long un sales, profit goals and marketing mix strategy,

8. Business Analysis
• Business Analysis involves a review of the sales, costs and profit
projections for a new product to find out whether they satisfy the
company’s objectives.

9. Product Development
• If the product passes the business test, it moves to Product
Development
• Here the R&D or engineering develops the product concept into a
physical product.

10. Test Marketing
• The stage at which the product and marketing program are
introduced into realistic market testing.

11. Commercialization
• Here we introduce the new product into the market.
• Timing
• Where
• Market rollout

12. Managing New- Product Development
• Customer- Centered New- Product Development
• Team-Bases New Product Development
• Systematic New Product Development.

13. Brand Strategy
• Brand Equity
• Building Strong Brands
- Brand Positioning
- Brand Name Strategy
- Brand Strategy
- Brand Development
a. Line Extension
b. Brand Extension
c. Multi Brands
d. New Brands
• Managing Brands