The development of original products,product improvements, productmodification through firms own R & Ddepartment.
Every product go through a life cycle, it born, goesthrough several stages and eventually dies then a newproduct come that better serve the consumer needs.
Challenges under product life cycleChallenge of new product development.Challenge of product life cycle strategies.
Challenge of new product development:The challenge of new product is that, all productseventually decline and a firm developing new products.(According to the taste of consumers).
Challenge of product life cycle strategies:Challenge of product life cyclestrategies is that, the firm mustadopt its marketing strategies inthe face of changing tastes,technologies and competition
A firm can obtain new products in the two ways. Through the Acquisition New product development
Stages in the development of the new product1 Idea generation2 Idea screening3 Concept development and testing4 Marketing strategy5 Business analysis6 Product development7 Test marketing8 Commercialization
Idea GenerationWhat type of product & mkt?Company Objectives
Idea Generation (i) Internal idea source (ii) External idea source.
Internal Idea Sources Executives Engineers Scientists Manufacturing staff Sale People employees
External Source of Idea Customers Competitors Distributors Suppliers Others
Idea ScreeningScreening new product ideas inorder to spot good ideas anddrop poor ones as soon aspossible.
Idea Screening Reduce number of ideas Favorable Ideas( match the company’s objectives) Save future Cost target mkt Competition Manufacturing Cost Development time and cost
Concept Development & Testing Concept Development Concept Testing
Concept Development On the basis of screened ideas make product. Imaginary product on the basis of favorable ideas An attractive idea must be developed into a product concept. What type of product What are the feature Image of the product
Concept testing1. Testing new product concepts with a group of target to find out if the concepts have strong consumer appeal2. Low direct marketing3. Feed back from the customer
Product Development StrategyDesigning an initial marketing strategy for anew product based on the product Concept.( A detailed version of the new product ideastated in meaningful consumer terms)
Marketing Strategy Development Target Market, planned product positioning and sales, market share and the profit goals for the first few years Product planned price, distribution, marketing budget for the product The planned long rum sale, profit goals, marketing mix strategy
Business Analysis expected costs Expected profit for the product marketing costs R & D, operations costs accounting Costs finance costs
Product Development Physical product Jump in investment quickly and at budgeted costs functional features psychological characteristic
Test MarketingThe stage of new product development in which theproduct and marketing program are tested in morerealistic mkt setting
Feature of Test MKT Cost can be high Advertising Competitors gain Advantage Distribution It take lot of time Pricing It does not give us product Branding success guarantee Packaging
Test Marketing1 Standard Test Market2 Controlled Test Market.3 Simulated Test Markets
Standard Test Market Marketing Campaign Consumers & Distributor surveys Measure to gauge the product performance Forecast National sale and profit Product potential problems Take very much time Competitors can monitor
Commercialization Introducing a new into the market High cost ( rent, advertising, sale promotion) Launching time Place
Organizing for the new Product Sequential product Development simultaneous product development team based development collaborative product development overlapping the steps in the product development Marketing Finance Design Manufacturing Legal department Supplier companies Consumer companies
Sequential PD Development It step by step process Steps or stages work independently. Control risky & complex projects. Very slow
Simultaneous product development team based development collaborative product development overlapping the steps in the product development
Limitations In super fast, risky and costly Tension & Confusion Chances of quality affect
The Product Life Cycle (PLC) Product Development Introduction Stage Growth Stage Maturity Stage Decline Stage
Introduction It takes time It sales is low Profit is low or negative High distribution Promotion expenses
Growth Stage High sale Early Adopter Later Buyer Profit increase Unit cost fall Improved quality and feature
Maturity Stage Sales growth slow down More longer Strong challenges to the management Competitors, mark down prices Increase advertising Sales promotion More work on R & D
Characteristics Introduction Growth Maturity DeclineSales Low Sale Rapidly Rising Sales Peak Sale Declining SaleCosts High cost per Avg. cost per Low cost per customer Low cost per customer customer customerProfits Negative Rising Profits High Profit Declining ProfitsCustomers Innovator Early Adopter Middle Majority LaggardCompetitors Few Growing Number Stable no. beginning to Declining No. decline
Strategies Introduction Growth Maturity DeclineProduct Offer a Basic Offer product Diversify brands Phase out Product extensions service, & models weak items warrantyPrice Use Cost Plus Price to penetrate Price to match or Cut Price market beat competitorsDistributi Build Selective Build Intensive Build More Go Selectivon Distribution Distribution Intensive DistributionAdvertisi Build product Build product Stress brand Reduce tong awareness among awareness in the mass Differences and level neede early adopters market benefits to retain ha core loyalSales Use heavily sales Reduce to take Increase to Reduce ToPromotio promotion to entire advantage of heavy encourage brand minimumn trail consumer demand Switching level