Companies develop existing products or introduce new products for three main reasons: to make more profit, expand their market, and respond to changes outside the company. The document then outlines the new product development process, which involves idea generation, screening, concept development and testing, market strategy, business analysis, product development, test marketing, and commercialization. It also discusses product life cycle strategies and how marketing strategies should be adapted for each stage from introduction to growth, maturity, and decline.

1. WHY ALL THE COMPANIES ARE
LOOKING TO DEVELOP A
EXISTING PRODUCT OR
INTRODUCING A NEW PRODUCT
?

2. # “ When the changes outside is better than
changes inside, the end is near ”.
# To make more profit.
# To expand their market.

3. NEW PRODUCT DEVELOPMENT
Definition:
Development of original products,
product improvement, product
modification, inventing new product
through the firm’s own R&D efforts.

4. PROCEDURES OF NEW PRODUCT DEVELOPMENT

5. IDEA GENERATION
 Internal source
# Research and Development
# employees
 External source
# customers
# competitors
# suppliers
# distributers

6. IDEA SCREENING
Process to spot a good idea and drop poor ones
# Selecting an idea which is feasible and workable
to develop.
# Online blogs may discuss customers
dissatisfaction with a certain product, which may
provide ideas to inventors or a new product or
service.
.

7. CONCEPT DEVELOPMENT AND TESTING
It provide full details of the new product’s idea.
# Will it be practical and feasible?
# What benefits the product will provide ?
# How will consumers react to the product?
# What will it cost to produce it ?
# Testing the concept by asking a number of
customers what they think of the idea

8. MARKET STRATEGY & DEVELOPMENT
A proposed marketing strategy will be
written laying out the marketing mix
strategy of the product, the
segmentation, targeting and
positioning strategy sales and profits
that are expected.

9. BUSINESS ANALYSIS
The business analysis stage looks more
deeply into the Cash flow the product could
generate, what the cost will be, how much
market shares the product may achieve and
the expected life of the product.

10. PRODUCT DEVELOPMENT
At this stage the prototype is
produced. The prototype will clearly
run through all the desired tests, and
presented to a selection of people
made up of the target
market segment to see if changes
need to be made.

11. TEST MARKETING
Test marketing means testing the
product within a specific area. The
product will be launched within a
particular region so the marketing mix
strategy can be monitored and if
needed modified before national
launch.

12. COMMERCIALIZATION
There are certain factors that need to be taken into
account before a product is launched nationally.
These include:
 timing of the launch,
 how the product will be launched,
 where the product will be launched,
 will there be a national roll out or
 will it be region by region?

13. CONT…
 Finallythe commercialisation stage involves
careful planning to maximise product
success, a poor launch will affect product
sales and could even affect the reputation
and image of the new product.

14. PRODUCT LIFE-CYCLE STRATEGIES
# The Product Life Cycle (PLC) has Five Stages.
# Product development
# Introduction
# Growth
# Maturity
# Decline

15. PRODUCT LIFE CYCLE
Sales and
Profits ($)
Sales
Profits
Time
Product Introduction Growth Maturity Decline
Develop-
ment
Losses/
Investments ($)

16. PRODUCT LIFE-CYCLE STRATEGIES
PLC Stages
 Begins when the company
 Product development develops a new-product
 Introduction idea
 Growth  Sales are zero
 Maturity  Investment costs are high
 Decline  Profits are negative

17. PRODUCT LIFE-CYCLE STRATEGIES
PLC Stages
 Low sales
 Product development  High cost per customer
 Introduction acquired
 Growth  Negative profits
 Maturity  Innovators are targeted
 Decline  Little competition

18. 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

19. PRODUCT LIFE-CYCLE STRATEGIES
PLC Stages
 Rapidly rising sales
 Average cost per customer
 Product development
 Rising profits
 Introduction
 Early adopters are
 Growth
targeted
 Maturity
 Growing competition
 Decline

20. 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

21. PRODUCT LIFE-CYCLE STRATEGIES
PLC Stages
 Product development  Sales peak
 Introduction  Low cost per customer
 Growth  High profits
 Maturity  Middle majority are
 Decline targeted
 Competition begins to
decline

22. 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

23. PRODUCT LIFE-CYCLE STRATEGIES
PLC Stages
 Declining sales
 Product development  Low cost per customer
 Introduction  Declining profits
 Growth  Laggards are targeted
 Maturity  Declining competition
 Decline

24. MARKETING STRATEGIES:
DECLINE STAGE
 Product – Phase out weak items
 Price – Cut price
 Distribution – Use selective distribution:
phase out unprofitable outlets
 Advertising – Reduce to level needed to
retain hard-core loyalists
 Sales Promotion – Reduce to minimal level

25. OPERATIONS OF NEW PRODUCT
DEVELOPMENT
 New Product Lines: They allow the business to
enter a completely new market segment.
 Additions to existing Product Lines: These are
new items to the business, but they fit within an
existing product line that the business already
produces. They may represent a fairly new product
to the market.
 Repositioning: These are new applications for
existing products. They involve the retargeting of
an old product to a new market segment.

26. CONT…
 Improvements and Revisions to Existing
Products: These “not so new” products are
replacements of existing product lines. These
“new and improved” product lines are
incremental innovations .
 Cost Reductions: designed to replace existing
product lines while providing similar benefits and
performance but at significantly lower costs to the
business.

27. Thank you
