5. What is a Product?
A product is anything that can be
offered to a market for attention,
acquisition, use or consumption
that might satisfy a want or need
5
6. What is new product?
A product that is entirely new in
market
A product that adapts up or replace an
existing product
Old product in new market
Old product packaged in different way
Old product marketed in new way
6
7. New product development
Is a process which is design to develop, test and
consider the viability of product which are new to the
market in order to ensure the growth and survival of the
organization
Development of original products, product
improvements, product modifications, and
new brands through the firm’s
own R & D efforts.
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8. Why we develop new product?
To add to product portfolio
To create star and cash cow for future
To replace the declining product
To take advantage of new technology
To maintain /increase market share
To defeat rivals
To keep up with rivals
To make competitive advantage
8
9. Product Development Process
A Product Development process is
the entire set of activities required to
bring a new concept to a state of
market readiness.
A design process is the set of
technical activities within a product
development process. It does not
include business, financial, or
marketing activities.
9
18. Major factors in strategy
◦ Cost
◦ Quality
◦ Time-to-market
◦ Customer satisfaction
◦ Competitive advantage
Product and Service Design
19. Tangible – intangible
Services created and delivered at the
same time
Services cannot be inventoried
Services highly visible to customers
Services have low barrier to entry
Location important to service
Differences Between Product
and Service Design
20. Product or Service Design Activities
Translate customer wants and needs into
product and service requirements
Refine existing products and services
Develop new products and services
Formulate quality goals
Formulate cost targets
Construct and test prototypes
Document specifications
21. Reasons for Product or Service Design
Be competitive
Increase business growth & profits
Avoid downsizing with development of
new products
Improve product quality
Achieve cost reductions in labor or
materials
22. Objectives of Product and Service
Design
Development time and cost
Product or service cost
Resulting product or service quality
Capability to produce or deliver a given
product or service
24. Life Cycles of Products or Services
Time
Incubation
Growth
Maturity
Saturation
Decline
Demand
25. Product Life-Cycle Strategies
Product
development
Introduction
Growth
Maturity
Decline
Begins when the
company develops
a new-product idea
Sales are zero
Investment costs
are high
Profits are negative
25
PLC Stages
26. Product Life-Cycle Strategies
Product
development
Introduction
Growth
Maturity
Decline
Low sales
High cost per
customer acquired
Negative profits
Innovators are
targeted
Little competition
26
PLC Stages
27. Marketing Strategies: Introduction
Stage
Product – Offer a basic product
Price – Use cost-plus basis to set
Distribution – Build selective distribution
Advertising – Build awareness among early
adopters and dealers/resellers
Sales Promotion – Heavy expenditures to
create trial
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28. Product Life-Cycle Strategies
Product
development
Introduction
Growth
Maturity
Decline
Rapidly rising sales
Average cost per
customer
Rising profits
Early adopters are
targeted
Growing
competition
28
PLC Stages
29. Marketing Strategies:
Growth Stage
Product – Offer product extensions, service,
warranty
Price – Penetration pricing
Distribution – Build intensive distribution
Advertising – Build awareness and interest
in the mass market
Sales Promotion – Reduce expenditures to
take advantage of consumer demand
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30. Product Life-Cycle Strategies
Product
development
Introduction
Growth
Maturity
Decline
Sales peak
Low cost per
customer
High profits
Middle majority are
targeted
Competition begins
to decline
30
PLC Stages
31. Marketing Strategies:
Maturity Stage
Product – Diversify brand and models
Price – Set to match or beat competition
Distribution – Build more intensive
distribution
Advertising – Stress brand differences and
benefits
Sales Promotion – Increase to encourage
brand switching
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35. CREATING A PROJECT TEAM
Every potential new product or service requires a dedicated
development team.
creating your team you need to include people with a variety
of skills.
All team members should understand your business' objectives and
be committed to them.
There are many forms of effective team working and the right one
for you will depend on your business' needs. For example, team
members might:
work as a unit dedicated to one project, reporting to a project
manager
work exclusively on one project but remain in separate departments
reporting to department heads who are under the project manager
work on several projects at once with both a department head and
project manager to monitor progress
Teams need someone in a project management role to lead, co-
ordinate and motivate the team.
36. INVESTMENT
&DEVELOPMENT
New products and services is an naturally risky process.
You must plan any investment carefully and strictly
control your costs.
Factors considering in future investment.
plan exactly where this investment will be directed.
justify the expenditure on every project.
Manage your cost.
Before making investment decisions, consider how
much your business stands to gain from a completed
product or service. Weigh this against the risks you
face.
Phasing new product development.
One way to minimize your risks is to phase investments
in projects. By reviewing a project at the end of each
phase or stage of development.
37. A range of government grants and tax breaks is available for
research and new product development.
It's essential to keep a close eye on costs when you develop
new products and services to control cost. You should:
estimate development costs in advance.
monitor expenditure throughout the development process
introduce phased investment.
There are two main ways to estimate costs:
a top-down approach where you consider previous
comparable projects and use them as a benchmark
a bottom-up approach where all team members agree on
the costs they expect to incur with one project manager, who
will then estimate the total cost
Remember that your costs could include staffing, materials,
technology, product design and market research.
39. Standardization
A uniform identification that is agreed
on is called a standard
Two types exist:
◦ Industrial standardization --- the process
of establishing agreement on uniform
identifications for definite characteristics
of quality, design, performance, quantity,
service, and so on
◦ Managerial standardization --- deals with
such things as operating practices,
procedures, and systems
396-39
40. • 100% standardization is rare
• Usually starts with a core product as the
foundation
• Various features are added, these may differ
according to the country market
• Can also involve modular design, where various
features are packaged as modules, different
assembly combinations in different markets
What to Standardize?
40
41. Advantages of Standardization (Cont’d)
Fewer parts to deal with in inventory &
manufacturing
Reduced training costs and time
More routine purchasing, handling, and
inspection procedures
41
42. Advantages of Standardization
Orders fill able from inventory
Opportunities for long production runs
and automation
Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.
42
43. Disadvantages of Standardization
Designs may be frozen with too many
imperfections remaining.
High cost of design changes increases
resistance to improvements.
Decreased variety results in less
consumer appeal.
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49. How much revenue can I expect to
generate within a specified time
period (usually one year)
?
50. What will it take to realize this
additional revenue and profit
?
51. Where is the break even point and
what is the potential profit
?
52. Is this new direction in line with my
overall Business Vision and Long
Term Goals
?
53. CONCLUSION
The conclusion of this overall topic is
to develop a product requires
◦ Its designing
◦ Analysis of market as well as its cost and
required investment
◦ A very fine development process
◦ And finally its publicity and its approach to
the target population