Dr.G.M.SWAMY JSSATE Bangalore

1. PRODUCT LIFE CYCLE MANAGEMENT
MODULE-3
PRODUCT DEVELOPMENT
Prepared By
Prof.G.M.Swamy
Department of Mechanical Engineering
JSS Academy of Technical Education
Bangalore-560060
Mob:9739125899
E Mial : gmswamyjssateb@gmail.com

2. MODULE-3
PRODUCT DEVELOPMENT
 Introduction: Product Development typically refers to
all the activities involved in developing a product or
service, right from its initial conceptual stage to its
introduction to the market.
 This may also involve modification of an existing
product like minor changes in design for the purpose of
improving technical capabilities, reducing weight, ease
of use, minimizing cost, etc., and /or incorporating new
features to the products appearance, aesthetics, etc,
which tends to satisfy customers requirements or market
niche.

3. In general, Product development can thus be defined
as the “creation, innovation, utility enhancement, or
continuous improvement of the pre-designed features
(design,service,etc.) of an existing product, or
developing an entirely new product to satisfy the
requirements of the customers”.
A few examples of product development are listed as
follows:
(1) Packing cooking oil, wheat flour, and other daily
needs in small quantities in retail bags for household
consumption.

4. (2) Converting land line phones into wireless handsets for
portability and full time access to communication.
(3) Modify an airplane into a fighter jet to a greater speed.
(4) Developing electric automotive vehicle to contemplate zero
emission and deliver environmental benefits.
(5) Transform a traditional library into an e-library to facilitate
faster searching and accessibility of electronic books and other
digital documents.
The objective of any product development is to cultivate,
maintain and increase a company’s market share by satisfying
customer demand.
Since product development involves the risk of investing
precious time, money and intellectual resources, it becomes
necessary that it is well planned. The present module discusses
the various aspects involved in new product
development(NPD).

5. NEW PRODUCT DEVELOPMENT(NPD)
 New Product Development refers to all the activities involved
in developing a new product or service, right from its initial
conceptual stage to its introduction to the market.
 A new product opens a whole new market: it can completely
replace a current product, take over an existing product, or
simply broaden the market for something that already exists.
 New product development requires an understanding of
customer needs and wants, the competitive environment and the
nature of the market.
 Cost, Time and Quality are the primary variables that drive
customer needs.
 Aiming at these three variables, companies develop continuous
practices and strategies to better satisfy customer requirements
and to increase their own market share by a regular
development of new products.

6. REASONS / NEED FOR NPD
A new product, usually marked as an innovation, seems to
be necessary due to a number of factors. The various
factors/reasons/ needs for new product development are
briefed as follows:
1. Changes in market
Today’s consumer market is more dynamic compared
to the past; it keeps on changing due to varied
customer needs. Increased literacy rate, globalized
market, heavy competition and availability of a number
of substitute products have forced companies to
innovate new products.

7. 2. Changes in technology
Advancement in science and technology has given
way for the development of new products with
better performance, characteristics and cost when
compared to the existing one.
3. Increasing competition
The increased competition between existing
companies, coupled with new companies and
individuals through free enterprise and open
markets is one of the primary reasons for new
product development. Every company struggles to
retain customers and attract new customers with new
products thereby staying ahead of the competition.

8. 4. Diversification of risks
Ever product will inevitably carry some sort of risk of
failure. The product may not be capable to match
with market needs and wants. A company develops
new products just to diversify risks. Thus, the need
for continuous innovation arises because older
products are thrown out of market.
5. Reputation and Goodwill
To create image and reputation as an innovative and
dynamic company, new products are developed. A
company developing new products periodically has
more reputation and can attract customers easily.

9. 6. Utilization of Excess Capacity
Excess capacity may be in form of production capacity or
human skills. To utilize maximum plant and material
capacity, a company may opt for developing a new product.
7. Seasonal fluctuations
To meet the product demand due to seasonal fluctuations,
new products are developed. Apart from achieving customer
requirements, attractive business can also maintain, in spite
of variations occurring due to seasonal changes.
8. Growth and development
When it is not possible to accelerate growth rate by the
existing products, a company refers to develop new products
to expand its market, maximum sales and earn more profits.

10. BENEFITS OF NPD
A few important benefits of new product development are listed
as follows:
1. Helps to stay in tune with changing customer’s needs and
wants.
2. Helps to retain customers and attract new customers,
thereby staying ahead in the competitive market.
3. Customer’s requirements are met effectively and efficiently,
thereby providing a sense of satisfaction to the customers.
This in turn enhances company’s reputation.
4. Maximize sales and earn more profits, thereby enhancing
the growth rate and goodwill of the company. The growth
of business extends to global market share.
5. Ability to target new markets and increase market share.
6. New products create ne revenues, which in turn can be used
to research new ideas and products, thereby creating a
culture of innovation in the company.

11. STRUCTURING NEW PRODUCT DEVELOPMENT
The success of a company’s new product development significantly
depends on its ability to formalize and properly structure the
development process. The various process, stages, or steps involved
in a new product development are briefed as follows:
1. Idea generation
This stage involves creating a large pool of ides from various
sources as listed in the following:
 Internal sources – Company invites suggestions/workable ides from
employees
 SWOT analysis – Company may review its strength, weakness,
opportunities and threats and come up with a good feasible ides.
 Market research - Company reviews the changing customer needs,
wants and trends in the market.
 Customers – Reviews and feedbacks fro the customers or even their
ideas help companies generate new product ideas.
 Competition – Competitor’s SWOT analysis can help the company
generate ideas.

12. 2. Idea screening
This stage involves selecting a good and feasible idea, while
discarding the others. Specific screening criteria are set for
this stage, looking at ROI (return – on - investment),
affordably and market potential. The criterions are set
carefully so as to avoid product failure after considerable
investment down the line.
3. Concept development and testing
The concept, which is a detailed strategy or blue print version
of the selected idea is developed and brought to the target
market, where a group of selected customers are given full
information of the product in order to analyze their reaction
and opinion. Customer’s feedback helps to develop the
concept further.

13. 4. Business strategy analysis
Once the concept has been tested and finalized, the company
tends to analyze and decide various business issues like, cost
of the intended product, whether the demand for the product
is regular or seasonal, any competitors for the new product,
the expenses on advertising and sales promotion, product
positioning and the marketing mix that will be used, the total
sales, and expected profit.
5. Product development
Once all the strategies are approved, the product concept will
be passed to the technical and marketing development stage.
A prototype or a limited production model will be created
and all the branding and other strategies decided previously
are tested and applied in this stage.

14. 6. Test marketing
Test marketing (or market testing) is different to concept or
consumer testing, in that it introduces the prototype of the product
following the proposed marketing plan as whole rather than
individual elements. The prototype is introduced for research and
feedback in the test marketing phase. Customer’s feedbacks are
taken and further changes if require, are made to the product. This
process is of utmost importance as it validates the whole concept
and makes the company ready for the product launch.
7. Commercializing product
Final decisions need to be made to move the product to its launch
(release) into the market. Pricing and marketing plans need to be
finalized and the sales team and distribution briefed, so that the
product and company is ready for the final stage.
Note: The stages involved in NPD varies according to the nature of the
business and the management style, however most business follows
the above discussed seven main steps in the development process.

15. BUILDING DECISION SUPPORT
SYSTEM (DSS)
 In the new product development process, decision making at
the front end is particularly important as it helps companies
concentrate on developing competitive and customer-focused
products instead of investing in worthless ones.
 Sensible decisions must be made about the various aspects of
product development, such as, for example, the attributes of the
product, customer segment and marketing strategies.
 These decisions are interconnected and ultimately affect the
profitability of the product.
 In order to improve success rate of the new product
development, an intelligent decision support system (DSS) is
designed and developed.

16. Decision Support System (DSS) is an interactive system that uses
communication and technologies, data, documents, knowledge
and / or models, to identify and solve problems related to the
complete decision – making tasks, and make effective decisions
about various problems. Typical information that a decision
support application might gather and present includes:
1) Accessing all information assets, including legacy and
relational data sources
2) Comparative data figures
3) Projective figures based on new data or assumptions
4) Consequences of different decision alternatives, given past
experience in a specific context.

17.  A DSS in a bank, for example, can enable a manager
to analyze the changing trends in deposits and loans in
order to ascertain the yearly targets.
 In an engineering firm that has bids on several
projects, the management can identify from being
competitive with their costs.
 Decision support systems can be either fully
computerized or human – powered, or a combination
of both.
 However, much of the research is focused on
developing computer technology based solutions to
support the complex decision- making and problem
solving.

18. COMPONENTS IN BUILDING
DECISION SUPPORT SYSTEM(DSS)
A DSS as shown in the following figure, which consists
of three main components: database management
system, model management system and user interface.
The relevant details are as follows:
1) Database Management System (DBMS)
The decision support system’s database is a software
package that contains data from various sources,
including internal data from the organization, the
data generated by different applications, and the
external data mined from the Internet. The data or
information in decision making is very important.
The database system is responsible for data access
and manipulates and manages internal as well as
external stored data in databases.

20. 2) Model Management System (MMS)
The model management system uses various kinds of
mathematical and analytical models or simulations to represent and
analyze complex data thereby producing the required information.
A model predicts the output on the basis of different inputs or
different conditions, or finds out the combination of conditions and
the input that is required to produce the desired output. A decision
support system may include different models, with each model
performing a specific function. The selection of models that must
be included in a decision support system family depends on user
requirements and purposes of DSS. The DSS software usually
contains the predefined models or routines using which new
models can be built to support specific type of decisions. The
commonly used mathematical and statistical models are as follows:
 Statistical Models that contain a wide range of statistical functions,
such as mean, median, mode, deviations etc. These models are used to establish,
relationships between the occurrences of an event and various factors related to that
event. It can, for example, relate sale of product to differences in area, income, season
or other factors. In addition to statistical functions, they contain software that can
analyze series of data to project future outcomes.

21.  Sensitivity Analysis Models are used to provide answers to what – if
situations occurring frequently in an organization. During the analysis, the
value of one variable is changed repeatedly and resulting changes on other
variables are observed. The sale of product for example, is affected by
different factors such as price, expenses on advertisements, number of sales
staff, productions, etc. Using a sensitivity model, price of the product can
be changed repeatedly to ascertain the sensitivity of different factors and
their effect on sales volume.
 Optimization Analysis Models are used to find optimum vale for a target
variable under given circumstances. They are widely used for making
decisions related to optimum utilization of resources in an organization.
During optimization analysis, the values for one or more variables are
changed repeatedly keeping in mind the specific constraints, until the best
values for target variable are found. They can, for example, determine the
highest level of production that can be achieved by varying job assignments
to workers, keeping in mind that some workers are skilled and their job
assignment cannot be changed.

22.  Forecasting Models use various forecasting tools and techniques,
including the regression models, time series analysis, and market
research methods etc., to make statements about the future or to
predict something in advance, like sales forecasting. They provide
information that helps in analyzing the business conditions and
making future plans.
 Backward Analysis Sensitivity Models, also known as goal seeking
analysis, the technique followed in these models is just opposite to
the technique applied in sensitivity analysis models. In place of
changing the value of variable repeatedly to see how it affects other
variables, goal seeking analysis sets a target value for a variable and
then repeatedly changes other variables until the target value is
achieved. To increase the production level by 40% using the
backward sensitivity analysis, for example, first, the target value for
the production level can be set and then the required changes to
made in other factors, such as the amount of raw material, machinery
and tools, number of production staff, etc., to achieve the target
production level.

23. 3) User Interface
It is an interactive graphical interface which makes the interaction
between the DSS and its users. It displays the results (output) of
the analysis in various forms, such as text, table, charts or graphics.
The user can select the appropriate option to view the output
according to his requirement. A manager, for example, would like
to view comparative sales data in tabular form whereas an architect
creating a design plan would be more interested in viewing the
result of analysis in a graphical format.
Note: The component, knowledge management in DSS is essentially
about getting the right knowledge to the right person at the right
time. Knowledge management may also include new knowledge
creation, or it may solely focus on knowledge sharing, storage, and
refinement. It worth mentioning here that knowledge management
is not about managing knowledge for knowledge’s sake. The
overall objective is to create value and leverage and fine the
company’s knowledgeable assets to meet organizational goals.

24. CHARACTERISTICS OF DECISION SUPPORT SYSTEM
A few characteristics of an ideal decision support system are listed as
follows:
1) An ideal decision support system should not be used to make
automatic decisions, instead assist and encourage people in an
effective decision making process.
2) Must provide support for both individual and group of decision
makers.
3) Must present information to the customer in a way that is easy to
understand.
4) Must have the programming capability to generate many types of
reports, all based on user specifications.
5) Must include variant types of models.
6) A good DSS should be able to respond quickly to the changing
needs of decision makers.
7) DSS must be intended for repeated / routine use.

25. ADVANTAGES AND DISADVANTAGES OF DSS
Following are a few common advantages and limitations of
decision support system.
Advantages :
1) DSS supports both individual and group of decision makers.
2) DSS provide specific capabilities that support one or more
tasks related to decision making including: intelligence and
data analysis; identification and design of alternatives;
choice among alternatives; and decision implementation.
3) DSS helps to improve the accuracy, timeliness, quality and
overall effectiveness of a specific decision or a set of
related decisions.
4) DSS enables a thorough quantitative analysis in a very short
time. Even frequent changes in a scenario can be evaluated
objectively in a timely manner.
5) Data collection and model construction experimentations
are executed with active users’ participation thereby greatly
facilitating communication among managers.

26. Limitations
1) Building DSS is often very expensive and complex because
people vary so much in terms of their personalities,
knowledge and ability, preferences, the jobs they told, and
the decisions they need to make.
2) DSS provides all information in the form of graphs, pictures,
and/or text without much emphasis on the facts. Even though
a DSS may quantify some of these aspects, the end result
must be based on the own judgment of the decision maker.
3) The computerized DSS may sometimes result in information
overload, which is a major problem for people involved in
decision making.

27. TYPES OF DECISION SUPPORT SYSTEM(DSS)
Today, although there are number of DSS, they can be categorized in
to following five types:
1) Communication driven DSS: Typically, a communication driven
DSS relies on hybrid network & Electronic communication
technologies to connect decision-makers & to create an environment
of resource & information sharing, collaboration & communication
among a group of decision makers. Electronic mails, interactive
videos, Video conferencing, audio conferencing, file sharing and
report boards are paradigms of group support tools. Most
communication driven DSS’s are targeted at internal teams,
including partners. Its purpose is to help conduct a meeting, or for
users to collaborate and work collectively. The most common
technology used to deploy the DSS is a web or client server.

28. 2) Data driven DSS: A data-driven DSS enables access to and
manipulation of structure data and can handle time-series of internal as
well as external company data and real –time data. Data-driven DSS are
separated by functionality. It is generally used to query a database or data
warehouse to seek specific answers for specific purposes. A data driven
decision support system might make use of a database designed for the
structure, however generally it is associated to addition databases. Most
data-driven DSSs are targeted at managers, staff and also product/service
suppliers. It is deployed via a main frame system, client/server link, or
via the web.
3) Document driven DSS : Document driven DSS’s are more common,
targeted at a broad base of user groups. The purpose of such a DSS is to
search web pages and find documents on a specific set of keywords or
search terms. The usual technology used to set up such DSS’s are via the
web or a client/server system. Examples of documents which may be
added into the database comprise guidelines as well as actions, result
conditions, brochures and business past data including proceedings of
gathering, company accounts also significant communications

29. 4) Knowledge driven DSS
Knowledge driven DSS are computer-based reasoning systems with the
distinction that Artificial Intelligence technologies, management expert
systems, data mining technologies and communication mechanisms are
integrated. It is essentially used to provide management advice or to
choose products/services. The typical deployment technology used to set
up such systems could be client/server systems, the web, or software
running on stand-alone personal computers(PC’s).
5) Model driven DSS
Model driven DSSs are complex system that help analyze decisions or
choose between different options. These are used by managers and staff
members of a business , or people who interact with the organization, for
a number of purposes depending on how the model is set up(scheduling),
decision analyses, etc. The DSS’s can be deployed via software/hardware
in stand-alone PCs, client/server systems, or the web. In model driven
DSS the choice makers offer partial constraint and information to assist
the decision makers to investigate the present circumstances however in
common huge databases is not preferred for model driven DSS as
compared to other types of DSS’s.

30. ESTIMATING MARKET OPPORTUNITIES FOR NEW
PRODUCT
Market opportunity is defined as the need or demand in a market that a
company can capitalize on, by introducing a new product or service. Most
companies fear whether the new product has enough market potential in the
present business environment. In order to estimate market opportunities, the
business model as a whole must be evaluated by identifying various factors
as briefed in the following:
1) Market size: Market size is defined as, estimating the number of
individuals in a certain market who are potential buyers and/or sellers of a
product or service. Companies are interested in knowing the market size
before launching a new product or service. Market size is the total
market sales potential of all the different companies put together. For
example, while launching a new ball bearing product in a given market,
the different manufacturing industries selling the same product in that
market determines the market size. The key to market sizing is to stay
objective and make an honest and unbiased evaluation of how viable the
product or service will be. The best way to get market size is through
local research agencies or collecting data directly from companies.

31. 2) Market growth rate Market Growth rate is defined as the rise in
sales or market sized within a given customer base over a specific
period of time. It is important for companies to know whether the
market has the potential for growth or decline for a given product.
For example, the PC (Personal Computer) market as compared to
the laptop market or the smart-phone market is declining slowly.
Hence a new company entering the business for producing
personal computers must be aware about entering declining
market. The company will now be in a position for finding
suitable alternatives accordingly.
3) Probability: Determining and forecasting profitability is
important to understand the market potential. If the expected
profit is low, then the volume of sales needs to be higher. On the
other hand, if the business is expecting low sales volume, then the
profit needs to be higher. Calculation of probability to determine
market potential is based on three elements viz., Return on
investment, Return on sales, and Return on net assets.

32. 4) Competitors: When evaluating opportunities, there is a need to know and
understand the existing competition in the market for the product being
launched. Small retailers usually suffer under the brunt of large
multinational companies. In case of high competition, the market entry
barriers are high enough and at the same time, establishing the company
and the product requires huge investment. Companies need to lower the
price of the product or offer additional services/complimentary benefits to
attract the customers. As a result, the company needs better financial
support to take the product till competition gets reduced.
5 Product and Customer type: Opportunities can also be found by
examining the product type and customer category. The frequency of
product purchase, for example, soaps, toothpaste, cosmetic products, etc.,
are purchased on a repeated basis, compared to the one-time purchase like
refrigerators, television etc.; the purchase situation like seasonal changes
etc., need to be examined to uncover expansion opportunities. Further, the
changing customers and their needs, their purchasing decisions, payment
category, etc., that helps companies to position their products appropriately
determines market opportunities.

33. NEW PRODUCT FINANCIAL CONTROL
The success of new products is usually measured in terms of their financial
result. Since a new product is a result of the various activities from different
functional perspectives such as engineering, manufacturing, testing, marketing, etc.,
it is important to plan the investments for making the new product and control costs
carefully. Any new product idea that survives the screening stage of new product
development (NPD), requires a more sophisticated and detailed business analysis
that will help the company determine various costs involved in the proposed NPD,
and forecast the profits from the product in future financial years. It is customary to
have all the necessary information in order to control the financial aspects related to
new product development. The following estimations are based in this regard:
1. Estimate the present financial status of the company.
2. Determine the financial feasibility of the product during the conceptual phase by
developing cost estimation based on the designer’ s ideas.

34. 3. Estimate the required investment that would be
necessary for each stage of the product
development.
4. Farming the cost – benefit discussions that need to
take place between the product development team
and senior management to move the product through
the development process.
5. Estimate cost involved for working staff, materials,
technology, new equipments/process, product
design, prototyping, overhead costs, market
research, product promotion, distributors, etc.

35. 6. Analyze costs for various risks associated with product
development launching.
7. Estimate feasible market share and forecasting the demand
for likely profits.
 With the above information, the company can estimate the
overall costs involved in new product development, and in turn
estimate the product price, including the discounted or
minimum sale. The company will be in a situation to reduce or
control the costs incurred during the various stages of product
development, and also building marketing strategies to enhance
product sales.

36. FINANCIAL CONTROL TECHNIQUES
 Exercising financial control through various activities
involves adoption of strategies and techniques.
 A new product is a result of various activities under
continuous changing circumstance. Hence, there is need
to use appropriate techniques for controlling different
types of financial activities.

37. A FEW MAJOR TECHNIQUES ARE
LISTED AS BELOW
 Budgetary control
 Return on investment (ROI)
 Break even analysis
 Ratio Analysis

38. BUDGETARY CONTROL
 In the development of a new product, a budget may be referred as a numerical
estimate or a plan, prepared in advance, depicting the overall costs from the
initial product development stage through its delivery. Mere preparation of
budgets does not help achieve the goals and objectives of the company,
instead a certain control must be exercised over the estimate plan. The
exercise of control with the help of budgets is known as budgetary control.
 Budgetary control involves comparing the budgeted figures with actual
performances or planned expenditures for calculating the variances and taking
corrective actions. It ensures the best possible use of available resources to
maximize the profits of the company.

39. RETURN ON INVESTMENT
 Return on investment is one of the important tool for technique for
financial control. It evaluates the efficiency of an investment. It is
usually calculated using the formula.
 ROI = Net profit before interest and taxes * 100
Total investment
ROI is the end product of series of statistical measures representing
the various phases of company’s operations that contribute to this
ratio/ Expecting healthy returns on new products depends on the
overall economics of the business

40. BREAK EVEN ANALYSIS
 Break even analysis is a financial control technique, widely used to
determine the number of units the business needs to sell on order to avoid
losses.
 At the break even point, the total sales equals to the total expenses.
The business does not
experience any loss, nor profit.
Beyond the break even point,
the company experiences
profit. Identifying the break
even point helps provide a
dynamic view of the
relationships between sales,
costs and profits at different
levels
Break even point = Fixed costs
Price per unit – variable cost per unit

41. RATIO ANALYSIS
 Ratio analysis is one of the important tools of financial control and
is used to judge the financial performance of a company. Ratio is
computed by taking the proportion of one financial variable with
another related financial variable. By calculating the ratio between
two related financial variables, useful interpretation can be made
which ultimately helps make appropriate decisions. Financial
variables are collected from financial statements such as profit and
loss account and balance sheet
 Ratio analysis also helps in the preparation of the budget because
different rations act as a guide for determining budgeted figures
for different activities.

42. IMPLEMENTING NEW PRODUCT DEVELOPMENT
 Implementing new product development refers to the various steps or
processes that a company goes through, in order to bring the strategic
plan for new product development into action (reality).
 In today’s highly competitive market, developing right product at right
time define the success and failure for the companies.
 Developing and following a robust new product implementation
process can denote the difference between success and failure.
 The various steps involved are –
1. Defining the product
2. Identify people
3. Utilize resources
4. Establish time frames
5. Selecting best practices and process
6. Defining marketing goals

43. 1) Defining the product: The products
functional/performance requirements are accurately defined
along with the voice of customer. This helps to focus all the
people involved in the product development and avoid
pitfalls like running out of resources(skills and time) and late
design changes; multiple revisions and repeated costly
validation testing.
2) Identify people: The management should identify a project
manager, define and develop the team having the right
people with required competencies and skills that are needed
to support and execute the plan for product development.
Further, a project charter that includes the objective and
scope of the project, key deliverables and date, Project
Budget, stakeholders and sponsors, review possible
constraints and risks need to be developed. As the project
unfolds, it becomes the duty of the project manager to direct
and manage each activity, and every step of the product
developmental stage.

44. 3) Utilize resources: Time, manpower, and money are
most important factors in new product development.
There is a need to assign resources accordingly and see
that all people including the top management know
their roles and responsibilities in advance, and also
articulate how the roles interface with each other. With
a reduction in development time, the product will reach
the customer and begin generating revenue sooner.
4) Establish time frames: Implementation of new
product requires a series of activities from different
functional perspectives such as engineering,
manufacturing, testing, marketing etc., working
together through the stages of product development.
Hence sufficient time should be allocated to certain
activities based on their functioning, while keeping in
mind the deadlines for implementation. The ultimate
goal is to develop the right product at the right time.

45. 5) Selecting best practices and processes: Engineers involved in manufacturing the
product must be allowed to choose the best practices and processes. Manufacturing
processes must be refined and validated through pilot builds and capability studies. In
addition, process documentation and quality controls that are developed accordingly
must be implemented. The outcome of various activities must result in the production
of the product with the desired features and functionality, which the product
developers had planned and created.
6) Defining marketing goals: Successful NPD requires a thorough knowledge of the
target market and its needs and wants. The benefits of the new product, the market’s
frustration of existing products and competitors, the marketing strategy, distribution
channels, and other necessary details need to be analyzed. The product marketing
team must review and ensure the features and differentiators of the developed product,
and refine to make sure all claims about the product features are accurate. The product
must be ready for getting launched into the market.
Different companies with different products development have different
implementation strategies. For any implementation process to be successful, many
tasks between different departments need to be accomplished in sequence, and this is
possible with accurate planning and effective communication and involvement of all
the people involved in the product development.

46. MARKET ENTRY DECISION
 When a company with new product idea has made a
decision to enter the market, there are various factors to
be taken into account. Listed are the various factors to be
considered while a new product is planned to enter the
market.
1. Define the market
2. Perform market analysis
3. Access internal capabilities
4. Analyze the new product
5. Analyze government policies and regulations

47. 1. Define the Market: Defining the market implies identifying market
in terms of location, having suitable population with a large, middle-
class representation and income levels well above the national
average; people’s characteristics, their needs and wants, educational
background and other necessary information for promoting products.
This step is critical because the information that appeals to one
particular sector of population (demographic) may not be as effective
with another.
2. Perform market analysis: Expanding into new markets involves a
great deal of market research in addition to target customers. There is
a need for an in-depth understanding of market growth rates, market
size, forecast demand, existing products and level of competition,
distribution/supply channels, advertizing channels, potential risks and
barriers to market entry, and so on.
3. Access internal capabilities: Much of your decision on how to enter
a new market is driven by an internal capabilities assessment. There is
a need to analyze the existing financial situation of the company and
future requirements, human resources with skilled and efficient
people, existing infrastructure and future requirements, company’s
present association with distribution/supply channels, getting
associated with a joint venture or partnership, and so on.

48. 4. Analyze the new product: There is a need to compare
the features and functionality of the new product with
those existing in the market, modifications if any to
overcome the limitations of the existing product and
attract customers, the overall cost for making the
product, fixing a competitive product price, associated
product discounts/ offerings if any, and so on.
5. Analyze Government policies and regulations:
Government regulations can very often and many
create barriers to business entry and growth.
Companies need to examine the implications of such
regulations prior to committing to the market entry.
The product’s influence on the living beings and the
environment must be given due consideration. There is
a need to ensure that companies and their products
actually conform to the regulations.

49. LAUNCHING AND TRACKING NEW PRODUCT PROGRAM
 Most companies fear during their product’s launch, and fear remains even
after launching the product into the market. The fear of failure, or getting
distracted due to mystifying reasons, leads to failure in focusing on the most
important aspects of product launch. Product launching and tracking
programs in this regard helps to identify various aspects of business
promotion and strategies to build sales an revenue through expansion for
customer base. The success of a new product can be ensured through effective
launching and tracking programs.
 The various aspects of product launching and tacking can be ensured as listed
below.
 Product launching program
 Evaluate market before launch
 Prepare for unlikely events
 Establish an effective product promotion
 Activating sales team
 Post launch tracking program

50. PRODUCT LAUNCHING SYSTEM
Launching program involves a planned series or activities, or a set of
related measures that a company goes through, while launching a new
product. Since it is possible to gauge exactly how well the new product
is going to be received in the market, there is a need for marketing
engineers to follow a few steps to deal with the product launch. The
common steps in this regard are briefed as follows:
1. Evaluate market before launch: There is a long gap- duration
between the preliminary stage of market analysis and the launching
stage. Hence, prior to launch, there is a need to evaluate the target
customers, existing competitors and their marketing strategies and
tactics including their marketing materials, ads, brochures, websites,
etc. An effective marketing strategy, along with a variety of marketing
channels can be developed with this evaluation.
2. Prepare for unlikely events: In case of the product launch is
successful, the company must be in a position to supply products for
increasing demand. Prior planning and arrangements should be made
with respect to adequate staffing, processes and supply lines to handle
the increased customer attention and demand. There is a need to have
a protocol for the distributor/customer enquires in this regard.

51. 3. Establish an effective product promotion: A combination of
traditional advertising as well as the inclusion of social media
tools can generate a wide range of interest in the new product.
The following methods can provide an effective product
promotion:
 Reviews/Quotes from Celebrities, brand ambassadors, or expert people
who have used the product can give credibility to the claims of the
product as being new, revolutionary, unmatchable, etc.
 Providing exclusive previews to customers and influencers by
highlighting the most valuable features of the product apart from the
competition so as to teach the relevant audience.
 Starting a blog and creating post that educate readers about the product’s
features. There is a need to update social media followers from time-to-
time.
 Submitting guest posts to, or getting featured in various journals,
publications, press-releases, etc.
 Providing customers with attractive offers, discounts, or even a chance
to win free products.

52. Advertising and Social media has changed drastically the
way that customers relate to each other and to the global
community. As the community circle widens and
expands, more and more people will come across the
product, starting a grass-root movement to help launch
the product without fear.
4. Activating sales team: Working with sales from team
to coordinate seminars, meetings and discussions with
customers in an organized way helps to prime the
customers for the product launch, apart from building
enthusiasm and commitment to the launch.

53. POST- LAUNCH TRACKING SYSTEM
Once the product is launched into the market, the development
processes related to product does not stop, instead, a new
cycle begins. Companies take great measures to monitor and
track the early days of product launch in order to analyze,
improve, and rectify various issues. The details related to
post-launch tracking program are briefed as follows:
1. Ensuring whether the product is available and reaching the
customer, based on his/her interests. Customers tend to
purchase the product either online or offline. The marketing
team must ensure the availability of the product, in the
region of the target customer. In case of online purchase, the
customer must be made available to review the product in
whole, apart from easy purchase and delivery system.
2. Analyzing whether the sales rate are meeting the prior
expectations or note. The reasons for sales decline, if any
are ascertained and measuring actions initiated accordingly.
Further, the sales team is motivated for better performance
through an incentive scheme that leads to increase in product
sales.

54. 3. Analyzing whether the customer’s behavior and attitudes toward the new
product are optimistic or not. The reasons towards negative attitudes are
ascertained and measuring actions initiated accordingly. There is a need
to provide platforms for customers and end users of the product to project
their comments on the various aspects of the product. This can be
achieved in the form of customer feedback through social media(online),
letter drop boxes, seminars, meetings, and so on. There is a need to
provide customized services in order to increase customer satisfaction.
4. Identifying any issues and concerns that need to be addressed in order to
improve the product’s design and /or performance. The company’s
perspective with reference to product’s feature, performance, and
capabilities need to be considered from the end users perspective and
make changes wherever necessary. Companies must remember that a
product exists and persists because of the customer.
5. Adopting suitable techniques to enhance the product’s competivity and
growth in the market. The sales and marketing team must be in constant
touch with the changing market, customer’s feedback and behavior, and
the competitor’s movement in the market. Techniques to retain
customers, attract new customers expanding markets through new and
secondary distribution channels, new franchises and distributors, direct
selling to customers, and so on, are used for the said purpose.

55. CONCEPT OF PRODUCT REDESIGN
 Redesign is the process of modifying or changing an existing
design of a product, with the objective of improving one or more
aspects of the product’s capabilities and/or performance, or
accommodating a new manufacturing or assembly environment
Topics to be discussed are
1. Reason/needs for Redesign
2. Benefits of Redesign
3. Drawbacks of Redesign

56. REASONS/NEEDS FOR REDESIGN
Some of the reasons or driving needs for a redesign are briefed as
follows:
1) Customer feedbacks related to product design or features,
performance, reliability and cost becomes the first reason for
product redesign.
2) Decline in sales rate due to competition from similar products
manufactured by different companies.
3) To satisfy new government regulations or requirements.
4) Expanding company in to new markets.
5) Under a splitting situation of a joint venture (partnership) of two or
more company groups, or company’ s logo or marketing materials
being changed.
Whatever may be the reason, it is worth mentioning here that a product
may be redesigned any number of times, but the objective, or the
end user’s requirements must remain the same. For example, a
chair can be redesigned any number of times, but it still captures
the essence of chairness.

57. BENEFITS OF REDESIGN
A few benefits of product redesign is listed as follows:
1) Redesign helps to create new products with new
features, which in turn drives new business.
2) Product redesign in a successful way comes with great
prizes, like new possibilities, new customers, and new
opportunities.
3) Redesign helps the company to stay ahead in the
competitive market.
4) Redesign helps in exploring new markets.
5) Redesign creates an impression among the people for
being innovative.

58. DRAWBACKS OF REDESIGN
1. Although redesign is simple and tractable, the process is
iterative and complex in nature. Extensive use of computer
based technologies and skilled personnel are essential for
simplifying the process. Further, there should be an analysis
phase to pinpoint areas for improvement.
2. Haphazard and careless decisions during redesign lead to
worthless product development. Redesign is not a cure-all
for fixing a flawed business model or declining sales.
3. Redesign cannot be precisely budgeted. Since redesign
process require skilled and experienced personnel, dedicated
analytics, testing and marketing, companies need to be
financially stable to accept redesign tasks.
4. Redesign must not involve drastic changes in the product
which was once a user’s favorite. Redesign must satisfy old
customers, as well as attract new ones.
5. Redesign requires extensive time and resources, and as such
the company will not be able to concentrate effectively on
new product developments.

59. STEPS INVOLVED IN PRODUCT REDESIGN
Redesign process is often complex, fraught with challenges, and take resources
away from higher priorities such as designing and building new features.
Hence product redesign must be disciplined in nature. Discussed below are the
four clear steps for approaching product design.
1) Analyze existing product: Feedback from customers, distributors, supply
agents and the like are taken into account and the product is analyzed from
all perspectives. Since customers use the product most often, they are best
equipped to provide feedback regarding the drawbacks of the product and
how to improve the existing product.
2) Analyze competitive product : Identify competitors and analyze their
products in terms of features, performance, cost, and other attributes. This
helps the company to determine and weigh their attributes, assess their
strength and weakness, identify the shortfalls in the existing product, and
uncover their objectives and strategies in the market segment. Competitive
analysis gives a chance to surpass the drawbacks related to various attributes
and in turn gain an edge over the competition.

60. 3) Bring all geographies and function in one room: Once a product has been
identified for redesign, all geographic business units, different functions, and
organizational levels need to be brought into one room. It is the most effective
way to ensure the product portfolio benefits from all perspectives, including both
cultural and functional. Together the team members should challenge the
product’s required functions and attributes need to be change. The objective is
to tap ideas and information from various sources.
4) Select a concept for product redesign: By evaluating all the concepts for
produce redesign, a final choice is made based on the attributes that best fit the
requirements, specifications, and customer needs and wants. Early models or
other concepts can be retained and used for additional market research or to
obtain feedback from key customers.
5) Establish and refine target specifications: Once the new design features have
been developed, establish the specifications of a prospective new product by
taking into consideration the various technical constraints. Further, there is a
need to refine some issues so as to take into account the various technical,
manufacturing and economic necessities or limits. As shown in the following
chart, the inputs to the redesign module are the initial design and a set of design
specifications. At each cycle of the redesign iteration, a check is performed in
the redesign module to ascertain whether the design satisfies the specifications or
not. Once the specifications are satisfied, the iteration stops to yield the
improved or modified design, else the iteration continues.

62. THANK YOU