A brief Discussion about new product development and product life cycle

1. Introduction
TOPIC :NEW PRODUCT DEVELOPMENT AND PRODUCT LIFE CYCLE
STRATEGIES
PRESENTED BY:
NAME ROLL NO
HASHAAM KHURSHID 05
NOMAN AKHLAQ 16
AKABAR MATLOOB 21
AHSAN LIAQUAT 35
FARHAD NAWAZ 32

2. New-Product Development and Product
Life-Cycle Strategies
Topic Outline
• New-Product Development Strategy
• New-Product Development Process
• Managing New-Product Development
• Product Life-Cycle Strategies

3. New-Product Development Strategy
Two ways of obtaining new product
Acquisition refers to the buying of a whole company, a patent, or a license to produce someone
else’s product
New product development refers to original products, product improvements, product
modifications, and new brands developed from the firm’s own research and development

4. New-Product Development Reasons for
new product failure

5. New-Product Development Process
Major Stages in New-Product Development

6. New-Product Development Process
Idea generation
Idea generation is the systematic search for new-product ideas
Sources of new-product ideas
• Internal
• External
Internal sources refer to the company’s own formal research and development, management
and staff, and “entrepreneurial” programs
External sources refer to sources outside the company such as customers, competitors,
distributors, suppliers, and outside design firms

7. Idea Screening
Identify good ideas and drop poor ideas
The aim in idea screening is to retain the successful ideas and eliminate the ideas which could be
failures - much easier to write than to carry out in practice!.
If in doubt, keep the idea until more information is obtained. Idea screening can be based on
tacit knowledge of the individual and of the company, with little new explicit information sought
in or outside the company.
Product development costs rise greatly in later stages, so the company wants to go ahead only
with those product ideas that will turn into profitable products.
Many companies require their executives to write up new-product ideas in a standard format
that can be reviewed by a new-product committee.

8. Idea Screening
• R-W-W Screening Framework:
– Is it real?
– Can we win?
– Is it worth doing?

9. Concept Development and Testing
Concept testing refers to testing new-product concepts with groups of target consumer
Product idea is an idea for a possible product that the company can see itself offering to the
market
Product concept is a detailed version of the idea stated in meaningful consumer terms
Product image is the way consumers perceive an actual or potential product

10. Marketing Strategy Development
Marketing strategy development refers to the initial marketing strategy for introducing the
product to the market.
OR
Marketing strategies give your small business a direction toward effective promotion. Marketing
strategies differ from one business to the next and should be customized to suit the needs of the
particular company.
• Marketing strategy statement includes:
– Description of the target market
– Value proposition
– Sales and profit goals

11. Marketing Strategy Development
Business analysis.
involves a review of the sales, costs, and profit projections to find out
whether they satisfy the company’s objectives
Product development.
involves the creation and testing of one or more physical versions by the
R&D or engineering departments

12. Commercialization
Commercialization is the introduction of the new product
• When to launch
• Where to launch
• Planned market
If the company goes ahead with commercialization ─ introducing the new product into the
market ─ it will face high costs.
A company launching a new product must first decide on introduction timing.
Next, the company must decide where to launch the new product ─ in a single location, a region,
the national market, or the international market.

13. Test marketing
Test marketing
is the stage at which the product and marketing program are introduced into
more realistic marketing settings.
Provides the marketer with experience in testing the product and entire marketing program
before full introduction.

14. When test Marketing is needed

15. Managing New-Product Development
Successful new-product development should be:
Customer-centered new-product development focuses on finding new ways to solve customer
problems and create more customer-satisfying experiences.
The most successful new products are ones that are differentiated, solve major customer problems,
and offer a compelling customer value proposition.
Team centered: is a development approach where company departments work closely together in
cross-functional teams, overlapping in the product-development process to save time and increase
effectiveness
• Systematic: Systematic new-product development is an innovative development approach that
collects, reviews, evaluates, and manages new-product ideas

16. Product Life-Cycle Strategies
• Product development – Sales are zero and investment costs mount
• Introduction – Slow sales growth and profits are nonexistent
• Growth – Rapid market acceptance and increasing profits.
• Maturity – Slowdown in sales growth and profits level off or decline
• Decline – Sales fall off and profits drop

17. Introduction Stage
The introduction stage starts when a new product is first launched.
In this stage, as compared to other stages, profits are negative or low because of the low sales and
high distribution and promotion expenses.
A company, especially the market pioneer, must choose a launch strategy that is consistent with the
intended product positioning.

18. Growth Stage
• Sales increase
• New competitors enter the market
• Price stability or decline to increase volume
• Consumer education
• Profits increase
Promotion and manufacturing costs gain economies of scale

19. Maturity Stage
After the Introduction and Growth stages, a product passes into the Maturity stage.
The third of the product life cycle stages can be quite a challenging time for
manufacturers.
In the first two stages companies try to establish a market and then grow sales of
their product to achieve as large a share of that market as possible. However, during
the Maturity stage, the primary focus for most companies will be maintaining their
market share in the face of a number of different challenges.

20. Maturity Stage
• Slowdown in sales
• Many suppliers
• Substitute products
• Overcapacity leads to competition
• Increased promotion and R&D to support sales and profits

21. Decline Stage
• Maintain the product
• Harvest the product
• Drop the product

22. Extending the Product Life Cycle
What can businesses do to extend the product life cycle?
Extension strategies extend the life of the product before it goes into decline. Again businesses use
marketing techniques to improve sales.
Examples of the techniques are:
Advertising – try to gain a new audience or remind the current audience
Price reduction – more attractive to customers
Adding value – add new features to the current product, e.g. improving the specifications on a
smartphone
Explore new markets – selling the product into new geographical areas or creating a version targeted
at different segments
New packaging – brightening up old packaging or subtle changes

24. ◦THE END
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