Product Planning and
Development
Maxwell Ranasinghe

B.Sc. ( Business Administration) Hons. MAAT,
Attorney at Law, CPM ( N...
•
•
•
•
•
•
•
•

Product Planning and
Development

Introduction to a product
Tangibility continuum of a product
Product Cl...
Definition of a product
• Product could be defined as
• Anyhting that can be offered to a
market for attention, acquisitio...
Product could be of any
of the following

• A physical product – Table, Car, Pen
• Person- Bathiya and Santhus, Sanga, ran...
Product Scope- Three
Aspects

• 1. Physical Aspect- is the physical aspect
of the product. What it is ? E.g. It is a
herba...
The Product Attributes
The Product

Tangible Atrributes
Design, Features,
performances, Branding
Packaging

Intangibel Att...
• Product Sub category- Further
categorization of a product category
eg. Toilet Soap category may be sub
categorized as be...
Product width
Product
Lines
Product
category

Product sub
category

Product
Brands
Tangibility Continuum of
a products
• Tangibility continuum discuss about to a
what degree a product is tangible or
intang...
Tangibility Continuum
Pure
tangible

Pencil

Tangible
goods with
service

Car

Hybrid
- Equal

restaurant

Major
service
w...
Product Classification
Products

Consumer

Industrial

Materials and parts

Convenience

Staple

Raw Materials

Impulse

M...
Side talk
Product Life Cycle
Theory ( PLC)
• It is assumed that a product will have a
life cycle from development to decline.
• It i...
Stage of Life cycle
•
•
•
•
•

1. Development stage
2. Introductory stage
3. Growth stage
4. Maturity stage
5. Declining s...
PLC
• Dev

Intro

Growth

Maturity

Decline
Sales

S
a
l
e
s

Profit

losses
Time
Introductory

Growth

Maturity

Relatively Relatively Longer
short
short
period

Declining
Longer or
short

Sales are
usua...
Introduct Growth
ory

Maturity

decline

Positioning
and brand
awareness

Brand image is Many brands
established
fight eac...
Importance of P L C to Marketers

•
•
•
•

•

Important tool for forecasting and
strategic planning
It shows that product ...
PRODUCTS THAT COME
AND GO ( FAD)
•
•
•
•
•
•

Limitation of the PLC
Many products may not have a life cycle as
depicted by PLC
Stages of PLC are difficult ...
Side talk
Services

• Service is is any act or performance that
one party can offer another that is
essentially intangible. It does ...
Planning for New
Products
• Long term survival of many firms in the
competitive world depends on launching
new products su...
Types of new
products

Innovative
Products

Replacement
products

Imitative
Products
• Innovative Products

– These products are new to the world and new to the
company.
– They are truly new to the customers...
• Replacement products

– Although these products are new to customers
or even to the company, they are essentially
improv...
• Imitative Products
– These products are new to the company and not
new to the market
– Many products come in this form t...
Reasons for introducing
new products
• To suit the changes in customers
needs
• To adopt new technological advances
and av...
Customer need analysis

• . Information is required as to the
expectation of the customer and to what
extent the existing ...
Side talk
If the gap is understood
well, one could find
opportunities to
• Introduce new products
• Make improvements in existing
pr...
•
•
•
•
•
•
•
•

1.
2.
3.
4.
5.
6.
7.
8.

Stages of new product
development
Idea Generation
Idea Screening
Concept Develop...
Idea Generation
• Finding promising new ideas is the starting
point in the new-product development
process.
• Idea generat...
Sources of new ideas
•
•
•
•
•
•

Internal
Customers
Competitors
Outside inventors
Channel members
Consultants
Side talk
Methods of generating new
ideas

• Search
• Searching new product idea publications, research
publications, the internet, ...
Screening Evaluating and
business analysis.
• Screening
• There should be a very clear cut screening
policy that would rej...
• Evaluation
• After the initial screening more comprehensive
evaluation is required. It is better to have a
buyers reacti...
Concept development & testing
• Idea has to be developed into a concept
• A concept is a detailed version of the idea
stat...
Concept Cars year 2008
Marketing Strategy
Development
Product
• Brand name selection and registration
• Government regulations as to pricing,
pac...
Pricing
• Finalise pricing strategy- Premium/
skimming, penetrative, mark up etc
• Dealer/distributor margings
• Bulk sell...
Distribution
•
•
•
•

Select channels of distribution
Transportation
Point of Sales Materials ( POSM)
Display racks, stand...
Promotion
• Selection and briefing an advertising
agency
• Finalise segmentation and target
markets
• Finalise the positio...
Business Analysis
• Business analysis estimates the commercial
performance of the proposed product.
• Revenue forecast
• C...
Product Development and
testing
•
•
•
•

Prototype
User Tests
Manufacturing development
Component developments and
collabo...
Test Market the
product

• During the test marketing, the marketers offer
the product for sale in a limited area where the...
Malli Ehenum Cup Eka
Issuwa Ah!
Ah Mokada putha wenda
Yanne?
Katada Adambara…
• Depending on the nature of the product
and the sample size, cost and time of test
marketing may vary. E.g. test marketin...
Launch product

• First let the company wide employees
know about the product and its
features and marketing objectives of...
STAGES IN ADOPTION PROCESS
• AWARENESS – the consumer become aware
of the innovation but lack information about
the produc...
Diffusion of innovation
• Innovators 2.5% -- willing to try new idea at a
risk
• Early adopters 13.5%-- opinion leaders , ...
Questions and Answers
and Exam Technique
Vibagayak Nethiwa Pass karanne
nedda ?

Vibage fail vunath marketing karanna
pulu...
Wedeh lehesi nehe!
Meka godak
denek
anaganna
wedak……
Ha.. Ha ….

Parissamin…..
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  1. 1. Product Planning and Development Maxwell Ranasinghe B.Sc. ( Business Administration) Hons. MAAT, Attorney at Law, CPM ( New Haven- USA)
  2. 2. • • • • • • • • Product Planning and Development Introduction to a product Tangibility continuum of a product Product Classification Branding Packaging Product life Cycle Introduction to new product planning
  3. 3. Definition of a product • Product could be defined as • Anyhting that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need- Phillip Kotler.
  4. 4. Product could be of any of the following • A physical product – Table, Car, Pen • Person- Bathiya and Santhus, Sanga, ranil, Mahinda, Anarkali, Anjalina Jollie, Mervin S • Place- Anuradhapura, Rathnapura, London, Jerusalem • Organisation- SLIM, CIM, UN, UNP, JVP, UNI LEVER, DIALOG • Idea- Freedom, democracy, Anti Corruption, Social Justice, Anti Drugs, MADD, Family Planning • Services – education, lawyers service, bank service
  5. 5. Product Scope- Three Aspects • 1. Physical Aspect- is the physical aspect of the product. What it is ? E.g. It is a herbal tooth paste • 2. Functional Aspect – is what is does? • E.g. It cleans tooth/ prevents tooth decay • Symbolic Aspect- is what it means to the users emotion? • E.g. The satisfaction of a person “free from tooth decay”
  6. 6. The Product Attributes The Product Tangible Atrributes Design, Features, performances, Branding Packaging Intangibel Attributes Image, Value, Perception
  7. 7. • Product Sub category- Further categorization of a product category eg. Toilet Soap category may be sub categorized as beauty soap and herbal soap • Product Brand- There could be one or many brands in sub categories of the product line such as Lux and Dove • Product Mix Consistency- how closely related the various product lines are in terms of channel distribution, promotion or in other ways
  8. 8. Product width Product Lines Product category Product sub category Product Brands
  9. 9. Tangibility Continuum of a products • Tangibility continuum discuss about to a what degree a product is tangible or intangible. • It is practically difficult to find a totally tangible product or a totally intangible product in the modern world of marketing • In many products there are physical goods as well as service components.
  10. 10. Tangibility Continuum Pure tangible Pencil Tangible goods with service Car Hybrid - Equal restaurant Major service with goods Air line Pure intangible Lecture
  11. 11. Product Classification Products Consumer Industrial Materials and parts Convenience Staple Raw Materials Impulse Manufactured Materials Emergency Capital Items shopping Installations Speciality accessories Unsought Supplies & services Supplies Business services
  12. 12. Side talk
  13. 13. Product Life Cycle Theory ( PLC) • It is assumed that a product will have a life cycle from development to decline. • It is measured in relation to time and sales. • However every product may not go through the same life cycle or some products will stay for along without getting on to the declining stage.
  14. 14. Stage of Life cycle • • • • • 1. Development stage 2. Introductory stage 3. Growth stage 4. Maturity stage 5. Declining stage
  15. 15. PLC • Dev Intro Growth Maturity Decline Sales S a l e s Profit losses Time
  16. 16. Introductory Growth Maturity Relatively Relatively Longer short short period Declining Longer or short Sales are usually slow and profits ar low Competitors will watch Sales increase Sales growth Drop in the and profits become slow sales will be high but volume big Distribution has just begun More distributors take up the product New competitors enter More competition and over capacity Many distributors and undercutting Competitors do not enter due to low margings Distributors reduce or give up
  17. 17. Introduct Growth ory Maturity decline Positioning and brand awareness Brand image is Many brands established fight each other Brand image is low Promotion budget very high Promo budget may be increased Not much promotions done Only one or two manufacturers High Product failure rate Few Many manufacturers manufactuers Abundoning manufacturing Improve product quality and features May have to take a decision to stay on or not Promo budget may be standard or low Many changes in the Marketing mix to be done
  18. 18. Importance of P L C to Marketers • • • • • Important tool for forecasting and strategic planning It shows that product have a limited life span It graphically shows the trend in sales and profitability It shows the need to adopt different strategies in various stages
  19. 19. PRODUCTS THAT COME AND GO ( FAD)
  20. 20. • • • • • • Limitation of the PLC Many products may not have a life cycle as depicted by PLC Stages of PLC are difficult to distinguish Identifying where one stage ends and the other begins is very difficult Traditional shape may not occur. Eg. Fad items Ignores the application of marketing mix activities Strategic decisions can change the PLC eg. repositioning
  21. 21. Side talk
  22. 22. Services • Service is is any act or performance that one party can offer another that is essentially intangible. It does not result in ownership of anything- Kotler. • Services have unique features that differentaite from physical goods • Intangibility • Variability • Inseparability • Perishability • Ownership • V I²PO
  23. 23. Planning for New Products • Long term survival of many firms in the competitive world depends on launching new products successfully. • Planning for new products is an essential and demanding strategic activity. • There could be many types of new products
  24. 24. Types of new products Innovative Products Replacement products Imitative Products
  25. 25. • Innovative Products – These products are new to the world and new to the company. – They are truly new to the customers and they provide completely different alternatives to existing products – Eg. . Vaccine for AIDS • Products based on Nano Technology • Heat seeking missile • Computers
  26. 26. • Replacement products – Although these products are new to customers or even to the company, they are essentially improvements or redesigns of existing products – Digital phones replaced the analogues – Disposable racers replaced the old blade base racers – Shaving foam and gels have replaced the shaving soaps
  27. 27. • Imitative Products – These products are new to the company and not new to the market – Many products come in this form to the market – One or few companies may come out with an innovative or replacemnet products but many will copy the technology and come out with simillar products. They are called mee- too products – Eg. After celltel> mobitel> dialog> Hutch – After Signal > clogard> supirivicki> sudnatha – After Bata slipper > DSI> Ceypa> ranpa – After Mercedes Benze> Ford> GM> Toyota> Nissan –
  28. 28. Reasons for introducing new products • To suit the changes in customers needs • To adopt new technological advances and avoid obsolence • To match competition • Product Life Cycle Concept • To bring down the cost
  29. 29. Customer need analysis • . Information is required as to the expectation of the customer and to what extent the existing products meet that expectation. Then the gap between the two could be observed Expectation • GAP Level met by the product
  30. 30. Side talk
  31. 31. If the gap is understood well, one could find opportunities to • Introduce new products • Make improvements in existing products • Make improvements in production process • Make improvements in supporting services.
  32. 32. • • • • • • • • 1. 2. 3. 4. 5. 6. 7. 8. Stages of new product development Idea Generation Idea Screening Concept Development & testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialisation ( Launch)
  33. 33. Idea Generation • Finding promising new ideas is the starting point in the new-product development process. • Idea generation ranges from incremental improvements to existing products to new to the world products. • ( produce a drug to reduce cholesterol with less side effects = improvement • produce a drug that cures AIDS = new to the world product)
  34. 34. Sources of new ideas • • • • • • Internal Customers Competitors Outside inventors Channel members Consultants
  35. 35. Side talk
  36. 36. Methods of generating new ideas • Search • Searching new product idea publications, research publications, the internet, exhibitions, conventions • Marketing Research • Meet product end users and find out what kind of products that can be used to satisfy their needs. Meet focus groups of consumers- retailers to discuss new products. • Technical research • Firm’s internal research laboratories and other external laboratories could generate new idea for you.
  37. 37. Screening Evaluating and business analysis. • Screening • There should be a very clear cut screening policy that would reject the unpromising product ideas and further the promising ideas. • Two basic questions need to be answered at the screening stage. • Is the idea could be practically developed into a product with development, production,marketing and financial capabilities of the company? • Is the venture commercially feasible? ( market attractiveness,profitability, social and environmental concerns)
  38. 38. • Evaluation • After the initial screening more comprehensive evaluation is required. It is better to have a buyers reaction also into the evaluation process. • A response from a sample of buyers potential buyers could be a very good criteria to find out the ultimate demand for the product.( This is also called proposed product concept testing) However, the actual product is not in existence and it could not be able to get results as in a test marketing process.
  39. 39. Concept development & testing • Idea has to be developed into a concept • A concept is a detailed version of the idea stated in a meaningful consumer terms. • The developed concept will be tested among a sample of consumers. • This will be presented to the target market in words or pictures. • Few questions will be asked to check whether the target market will buy the product.
  40. 40. Concept Cars year 2008
  41. 41. Marketing Strategy Development Product • Brand name selection and registration • Government regulations as to pricing, packaging and labeling etc • Determine packaging, sizes, shapes, colours, other properties • Guarantee period
  42. 42. Pricing • Finalise pricing strategy- Premium/ skimming, penetrative, mark up etc • Dealer/distributor margings • Bulk selling discounts • Credit periods
  43. 43. Distribution • • • • Select channels of distribution Transportation Point of Sales Materials ( POSM) Display racks, stand etc.
  44. 44. Promotion • Selection and briefing an advertising agency • Finalise segmentation and target markets • Finalise the positioning strategy • Have a theme • Communication budgets Finalise advertising plan/promotion • plan
  45. 45. Business Analysis • Business analysis estimates the commercial performance of the proposed product. • Revenue forecast • Cost Estimation • Profit Projections• Acceptable level of profit for a given product development• Assess the amount of risk involve
  46. 46. Product Development and testing • • • • Prototype User Tests Manufacturing development Component developments and collaborative product developments various specialised manufacturers get involved.
  47. 47. Test Market the product • During the test marketing, the marketers offer the product for sale in a limited area where they can measure the response. • Ideally the test market should reflect the target market for the product. The marketers evaluate not only the customers reaction but all the elements of the marketing mix. • Based on the results of test marketing, marketers determines how the marketing mix should be adjusted before a full scale launch.
  48. 48. Malli Ehenum Cup Eka Issuwa Ah!
  49. 49. Ah Mokada putha wenda Yanne?
  50. 50. Katada Adambara…
  51. 51. • Depending on the nature of the product and the sample size, cost and time of test marketing may vary. E.g. test marketing a car could be more expensive than test marketing a new cell phone. • If test marketing welcomes competition and gives ideas for competitors and the product could be copied easily one can avoid the test marketing.
  52. 52. Launch product • First let the company wide employees know about the product and its features and marketing objectives of the firm • Determine method of launch • Selection of venue for launch • Selection of media for launch • Brief distributors about the product • Press conference • Distribute promotional material • Execution of advertising strategy •
  53. 53. STAGES IN ADOPTION PROCESS • AWARENESS – the consumer become aware of the innovation but lack information about the product • INTEREST – the consumer is induced to seek information about the innovation • EVALUATION – the consumer consider whether to try the innovation • TRIAL– the consumer tries the innovation to improve his or her estimate of its value • ADOPTION – the consumer decide to make full and regular use of the innovation
  54. 54. Diffusion of innovation • Innovators 2.5% -- willing to try new idea at a risk • Early adopters 13.5%-- opinion leaders , adopt new ideas early but carefully • Early majority 34% -- deliberate they adopt new ideas before the average person • Late majority 34% they adopt only after a majority of people have tried it. • Laggards 16% -- suspicious of changes and
  55. 55. Questions and Answers and Exam Technique Vibagayak Nethiwa Pass karanne nedda ? Vibage fail vunath marketing karanna puluwni !!!!!!
  56. 56. Wedeh lehesi nehe! Meka godak denek anaganna wedak…… Ha.. Ha …. Parissamin…..

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