Business New product planning

1. 1

2. New Product
Planning
Group 4
Baal
Pulmano
Romaraog
Victorioso

3. What is Product Planning?
Product Planning is the ongoing
process of identifying and articulating market
requirements that define a product's feature
set. Product planning is the process of
creating a product idea and following through
on it until the product is introduced to the
market.
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4. 7 Phases of New Product Planning
Process
1. Idea Generation
The focus in this first stage is on
searching for new product ideas. New product
ideas come from a variety of sources. An
important source of new product ideas are
customers. Fundamentally, customer needs
and wants seem to be the most fertile and
logical place to start looking for new product
ideas. 4

5. 7 Phases of New Product Planning
Process
2. Screening the Ideas
It means critical evaluation of product
ideas generated. After collecting the product
ideas, the next stage is screening of these
ideas. The main object of screening is to
abandon further consideration of those ideas
which are inconsistent with the product
policy of the firm.
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6. 7 Phases of New Product Planning
Process
3. Concept Testing
What is tested at this stage is the
‘product concept’ itself-whether the
prospective consumers understand the
product idea, whether they are receptive
towards the idea, whether they actually need
such a product and whether they will try out
such a product if it is made available to
them. 6

7. 7 Phases of New Product Planning
Process
4. Business Analysis
This stage is of special importance in
the new product development process.
Estimates of sales, costs and profits are
important components of business analysis
and forecasts of market penetration and
market potential are essential.
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8. 7 Phases of New Product Planning
Process
5. Product Development
The idea on paper is converted into
product. Product development is the
introduction of new products in the present
markets. New or improved products are
offered by the firm to the market so as to
give better satisfaction to the present
customers.
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9. 7 Phases of New Product Planning
Process
6. Test Marketing
By test marketing, we mean, what is
likely to happen, by trial and error method
when a product is introduced commercially
into the market. These tests are planned
and conducted in selected geographical
areas, by marketing the new products. The
reactions of consumers are watched.
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10. 7 Phases of New Product Planning
Process
7. Commercialization
At this stage, production starts,
marketing programme begins to operate and
products flow to the market for sale. It has to
compete with the existing products to secure
maximum share in the market-sales and
profits.
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11. Alternative Product
Development Strategies
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12. Alternative Product Development Strategies
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13. Alternative Product Development Strategies
1. Market Penetration
It refers to concentrating on the current
business and directing resources and efforts
to the profitable growth of a single product,
in a single market, and with a single
technology.
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14. Alternative Product Development Strategies
2. Market Development
It consists of selling existing products,
to new customers in related market areas by
adding different channels of distribution or
by changing the content of advertising or the
promotional media.
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15. Alternative Product Development Strategies
3. Product Development:
It involves substantial modification of
existing products or creation of new but
related items that can be marketed to
current customers through established
channels.
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16. Alternative Product Development Strategies
4. Diversification
Is generally considered the most risky
alternative, because it involves both creating
new products and seeking new customers.
Marketers must carefully study the
competition as well as the needs and wants
of people they have not previously served.
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17. Product Positioning
Product positioning is the process
marketers use to determine how to best
communicate their products' attributes to
their target customers based on customer
needs, competitive pressures, available
communication channels and carefully
crafted key messages.
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18. Cannibalization
refers to a reduction in sales volume,
sales revenue, or market share of one
product as a result of the introduction of a
new product by the same producer.
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To be continue…

19. Mid Review
1. It is the process of identifying and
articulating market requirements?
2. There are 4 alternative strategies in
product development, what are they?
3. It refers to reduction of sales revenue or
market share as a result of the
introduction of new product?
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answers

20. Consumer Adoption Process
1. Awareness Stage
Individual consumer becomes aware of
the innovation. He is aware of either by
discussion with friends, relatives, salesmen,
or dealers. He gets idea about a new
product from various means of advertising
like newspapers, magazines, Internet,
television, outdoor media, etc.
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21. Consumer Adoption Process
2. Interest Stage
The consumer becomes interested in
innovation and tries to collect more information.
He collects information from advertising media,
salesmen, dealers, current users, or directly
from company. He tries to know about qualities,
features, functions, risk, producers, brand,
colour, shape, price, incentives, availability,
services, and other relevant aspects. 22

22. Consumer Adoption Process
3. Evaluation Stage
The consumer considers all the
significant aspects to judge the worth of
innovation. He compares different aspects of
innovation like qualities, features,
performance, price, after-sales services,
etc., with the existing products to arrive at
the decision whether the innovation should
be tried out. 23

23. Consumer Adoption Process
4. Trial Stage
Consumer is ready to try or test the
new product. He tries out the innovation in a
small scale to get self-experience. He can
buy the product, or can use free samples.
This is an important stage as it determines
whether to buy it.
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24. Consumer Adoption Process
5. Adoption Stage
If trial produces satisfactory results,
finally the consumer decides to adopt/buy
the innovation. He decides on quantity, type,
model, dealer, payment, and other issues.
He purchases the product and consumes
individually or jointly with other members.
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25. Adopters Categories
Adopters are customers who have
started using or exploring the product
offerings. Now adopter categories can be
defined as dividing these adopters on the
basis of time and level of willingness with
which they tried or will try the
product/service.
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26. Adopters Categories
1. Innovators
Innovators are risk takers and they seek changes.
They are the first one to buy a new product. They
try the product in its initial introduction phase.
2. Early adopters
Early adopters are prestige oriented opinion
leaders. They have higher social status, financial
liquidity, education. They use the product during its
late introduction phase of its life cycle. 27

27. Adopters Categories
3. Early majority
They are the leading segment of the market, about
one third of the target market. Early Majority have
above average social status and are not opinion
leaders. They come into picture during the growth
phase of the product.
4. Late majority
Followers of the early majority, typically sceptical
about an innovation, have below average social status
and little financial liquidity. They are about 36 percent
of the target market. They try the product in its late
growth and maturity phase. 28

28. Adopters Categories
5. Laggards
Conservative, price conscious segment, aversion
to change-agents. They are oldest and most
traditional. They show their willingness to use the
product in its late maturity phase and diminishing
phase.
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29. Diffusion
Diffusion is the process by which a
new idea or new product is accepted by
the market. The rate of diffusion is the
speed with which the new idea spreads from
one consumer to the next.
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30. Rate of Adoption Determinants
In particular, 5 characteristics are
especially important in influencing an
innovation’s rate of adoption:
1. Relative Advantage. The relative
advantage refers to the degree to which an
innovation appears superior to existing
products.
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31. Rate of Adoption Determinants
2. Compatibility. Compatibility is the degree
to which an innovation fits the values and
experiences of potential consumers.
3. Complexity. The degree to which an
innovation is difficult to understand or to use
is also one of the product characteristics that
influence the adoption rate.
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1 more page before END

32. Rate of Adoption Determinants
4. Divisibility. Divisibility refers to the
degree to which an innovation may be tried
on a limited basis.
5. Communicability. Communicability can
slow down adoption significantly. It is the
degree to which the results of using an
innovation can be observed or described to
others. END 33

33. Final Review
1. Stage where individual Consumer becomes
aware of the innovation.
2. Stage where consumer decide to adopt the
innovation
3. Stage where consumers considers all the
significant aspects to judge the worth of
innovation
4. What are the 5 adopters categories?
34
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answers

34. Short Quiz (Identification)
1. It is the process of identifying and articulating
market requirements?
2. It refers to reduction of sales revenue or market
share as a result of the introduction of new
product?
3. What stage where individual Consumer becomes
aware of the innovation?
4. What stage where consumer decide to adopt the
innovation?
5. What stage where consumers considers all the
significant aspects to judge the worth of
innovation? 36

35. Panuto: Isulat ang false kung tama at true naman kung mali.
6. There are 4 alternative strategies in Product development.
7. Diffusion is the process by which a new idea or
new product is accepted by the market.
8. Divisibility refers to the degree to which an innovation may be
tried on a limited basis.
9. Communicability is the degree to which the results of using
an innovation can be observed or described to others.
10. Complexity is the degree to which an innovation is difficult to
understand.
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Short Quiz (Bawal ang tamang sagot)

36. Short Quiz (Enumeration)
11-15. Enumerate the 5 Adopters
Categories.
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37. 1. Product Planning
2. Cannibalization
3. Awareness
4. Adoption
5. Evaluation
6-10. false
11-15. Innovators, Early adopters, Early
majority, Late majority and Laggards
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answer key…

38. Credits nman jan kung kokopya
aba hirap kya nito…
-MISS
(name ko)
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