New Product Development, Consumer Adoption Process, Product Life Cycle, and marketing mix strategies.

2. NPD
 New product development (NPD) is the
process of bringing a new product to the
marketplace. Your business may need to
engage in this process due to changes in
consumer preferences, increasing
competition and advances in technology
or to capitalise on a new opportunity.
 Innovative businesses thrive by
understanding what their market wants,
making smart product improvements, and
developing new products that meet and
exceed their customers' expectations.

3. 'New Products' can be:
 Products that your business has
never made or sold before but
have been taken to market by
others
 Product innovations created and
brought to the market for the first
time. They may be completely
original products, or existing
products that you have modified

4. Cont…
 NPD is not limited to existing
businesses. New businesses, sole
traders or even freelancers can forge
a place in the market by researching,
developing and introducing new or
even one-off products.

5. New product development
strategy
 With a well-considered new product development (NPD)
strategy, you can avoid wasting time, money and
business resources. An NPD strategy will help you
organise your product planning and research, capture
your customers' views and expectations, and accurately
plan and resource your NPD project. Your strategy will
also help you avoid:
I. overestimating and misreading your target market
II. launching a poorly designed product, or a product that
doesn't meet the needs of your target customers
III. incorrectly pricing products
IV. spending resources you don't have on higher-than-
anticipated development costs
V. exposing your business to risks and threats from
unexpected competition.
There are several important steps you will need to
plan into your NPD strategy.

6. Define your product
 An accurate description of the
product you are planning will help
keep you and your team focused
and avoid NPD pitfalls such as
developing too many products at
once, or running out of resources
to develop the product.

7. Identify market needs
 Successful NPD requires a thorough knowledge of your
target market and its needs and wants. A targeted,
strategic and purposeful approach to NPD will ensure
your products fit your market. Ask yourself:
I. What is the target market for the product I am
proposing?
II. What does that market need?
III. What is the benefit of my proposed new product?
IV. What are the market's frustrations of existing products
of its type?
V. How will the product fit into the current market?
VI. What sets this product apart from its competition?
 Draw on your existing market research. You may need
to undertake additional research to test your new
product proposal with your customers. For example,
you could set up focus groups or a customer survey.

8. Establish time frames
 You need to allow adequate time to develop and
implement your new products. Your objectives for
developing new products will inform your time frames
and your deadlines for implementation. Be thoughtful
and realistic. Some objectives might overlap but others
will be mutually exclusive.
1. Your objective to race against your competition will
require efficiency from your team.
2. Your aim to achieve a specific launch date will be
influenced by demand for seasonal products and
calendar events.
3. Your aim to be responsive to your customers' needs
and demands will require time for research to ensure
you develop the right products at the right time.
4. Your objective to stick to business as usual and
maintain other schedules will affect the resources you
make available for NPD.

9. Identify key issues and
approaches
 There are many tasks involved in developing
a product that is appropriate for your
customers. The nature of your business and
your idea will determine how many of these
steps you need to take. You may be able to
skip or duplicate certain stages, or start
some of them simultaneously. Key tasks
include:
1. generating and screening ideas
2. developing and screening concepts
3. testing concepts
4. analysing market and business strategy
5. developing and market testing products

11. Generating and screening
ideas for new products
 Successful new product development
(NPD) starts with identifying good
product ideas and using reliable
criteria to decide which ideas to
pursue.
 You should take the following steps
before you allocate funds to new
product development.

12. Generating and screening ideas
for new products
Idea generation Brainstorm product issues
 Write a customer needs
list based on the
information you gather
from the sources
identified below. You
should try to identify
existing weaknesses in
your products, gaps in
your product range and
areas for product
improvement.
 Work with your existing team
members to brainstorm
product issues. Your sales and
service staff speak to your
customers daily, hearing
feedback about your products
and the customers' needs.
Capture the feedback, product
observations and ideas from
your team. Make sure you
recognise their ideas and
promote a shared culture of
innovation.

13. Generating and screening ideas
for new products
Use your research and
development (R&D) processes
Review your quality assurance
(QA) processes
 Use your business's
existing R&D processes.
Identify modifications you
could make to existing
products, or adaptations
for new products,
consistent with feedback
from your market and
customers
 Note any issues in your
products and identify potential
ideas for addressing gaps in
quality.

14. Generating and screening ideas
for new products
Use your research and Review
your customer complaint records Review your research
 Identify common
weaknesses in your
existing product range,
and look for areas where
improvement is most
needed. Learn
about managing
customer complaints.
 Review your customer
research and market
research, and plan further
market and customer surveys
if you identify research gaps.
What are your customers
telling you they're looking for?
What do they find frustrating
or limiting about your
products? How do they use
your products most?

15. Generating and screening ideas
for new products
Talk to your suppliers and other
business partners
Research and understand your
competition
 Talk to manufacturers,
retailers and sales reps
to capture their
knowledge of your
products and thoughts for
improving them.
 Try to understand your
competition. Review your
competitors' product
range and consider how
the market is responding
to them. Do any of their
products seem to be
meeting needs that yours
aren't?
Study catalogues and product
information
Make sure you have a
comprehensive understanding
of existing products available in
your market.

16. Idea screening
 With your list of potential new product
ideas, you now need to decide which
ideas to pursue and which to discard.
Consider your competition, your
existing products, their shortcomings,
and the needs of your market.
 Draw on the customer needs list you
have developed, and the areas for
product improvement you have
identified.

17. Develop a set of criteria to
evaluate your ideas against. Your
criteria might include:
 most prominently identified
customer needs
 product improvements
most needed
 the benefits to your target
market
 the technical feasibility of
the idea
 the level and scope of
research and development
required
 he marketing potential of
the idea
 the profitability of the idea.
What is its potential appeal
to the market? How would
you price it? What are the
costs in bringing it to
market - overall and per
unit?
 where the product fits in
the market. Is there a gap?
How close is it to
competitor products?
 the resources it will require
in development
 the fit with your business
profile and business
objectives.

18. SWOT analysis
 A SWOT analysis can help you to
identify the strengths and weaknesses
of each idea.

19. New product concept
development and screening
 Carefully plan the steps involved in
testing your new product development
(NPD) ideas. For every 7 new product
ideas developed, 1 becomes successful.
Defining your new product concept and
testing it with your market will help you
determine whether your new product
idea will be a success.
 The concept development and testing
stage of NPD can be time-intensive, but
it will help you avoid unnecessary costs
later by ensuring you pursue the best
new product concept in your market.

20. New product concept
development and screening
Create a product concept Do your sums carefully
 A product concept is a
detailed description of an
idea, which you describe
from the perspective of
your customer. Taking
your customers'
viewpoint when
describing your product
concept will help you test
and evaluate how
responsive your market
will be to your product.
 Make sure your idea can
be designed,
manufactured and
delivered within your
financial, resource and
time constraints.

21. New product concept
development and screening
Talk to the people who will buy it Refine your target market
 Take your idea to your
target audience to
determine what they
think and where any
gaps might lie. Market
researchers can help you
run focus groups and
surveys to determine
how customers will
respond to your product..
 Detail your customer
targets as accurately as
you can. Your focus
groups or conversations
with your target
audiences will help you
determine whether you're
targeting the right market
segments..

22. New product concept
development and screening
Examine intellectual property
(IP) issues Identify the features
 Find out whether another
business or individual has
already patented your idea
by searching for a patent.
 If your idea was the
combined result of several
members of your team,
consider how you will
recognise their
contributions to the
intellectual property when
you protect your idea.
 Based on the information
you have gathered to
date, list the features and
benefits of your proposed
product from highest
market importance to
least.Take your time
Define your product concept clearly,
test it with your audience and don't
make any assumptions. Many NPD
ventures fail because businesses rush
through concept development and
testing.

23. Business analysis of new
products
 A new product idea that survives the
screening stage of new product development
(NPD) requires a more sophisticated and
detailed business analysis. A business
analysis will help you determine the costs
involved in your proposed NPD, and forecast
the profits you may make from the product in
future financial years. The costs of
developing a product are substantial.
 Your business analysis will also help you
eliminate inappropriate ideas and avoid
unnecessary costs.
 Carry out the following steps to assess the
viability of your new product.

24. Business analysis of new
products
Estimate your product price
Identify your product's market
potential
 Review your market and
competitor research and
your feedback from
customers to determine
the selling price of your
product, and the profit
you are likely to make.
 Review your market
research and the sales
performance of existing
products in your range.
Use your recent sales
figures and industry
sales figures to help you
identify the current level
of market activity and
interest in products in the
same line as your new
product.

25. Business analysis of new
products
Forecast your sales volume Identify your break-even point
 Estimate the volume of
the product sales you
anticipate based on your
research into customer
needs, the size of your
existing customer base
and your market.
 Estimate the profitability
of your product, and
determine your break-
even point - the amount
of product you need to
sell to cover your fixed
costs (such as rent,
electricity and wages).

26. Business analysis of new
products
Determine your minimum sale
price Consider the long term
 Project your returns
based on your
anticipated discounted
product price to identify
your lowest sales figure
per item.
 Forecast the lifespan of
your product in the
market. How long will it
be relevant to your
market's consumers?
How long will it take you
to realise a decent return
on your investment?
What market share
percentage does it have
the potential to realise?

27. Business analysis of new
products
Scope your marketing strategy Also consider...
 Your marketing strategy will
help you determine how to
position your new product in
the marketplace. The
information you gather, next,
in your market testing will help
you identify which market
segments to target and how.
At this stage, however, you
can use the data you have
gathered in your business and
market research to start
shaping your marketing
strategy - identifying relevant
market and product
information as well as
approaches that will be
important in your product
marketing.
 Find out if there are grants
and business
support available to help
your new product
development.
 Use the online IP info kit to
help you understand India's
IP system and find ways to
protect your business's IP.
 Find out if your business
and industry
association can assist with
industry-wide sales figures.

28. New product prototypes and
market testing
 Prototype testing is one of the most
rewarding phases of new product
development (NPD). Developing a
prototype of your product allows you to
bring your product to life for the first time
and test it in its market. Your investment in
market testing your prototype will help you
prepare your product for market entry.
 It is important to be careful and considered
in this exciting stage of NPD. Take your
time and invest in the human resources and
expertise you need to perfect your new

29. New product prototypes and
market testing
Put someone in charge Consult the experts
 Assign a member of your
team (if not you) with
strong project management
skills to manage or
coordinate the product
development and delivery
process. Ask your product
development manager to
maintain a practical,
informative schedule and
project plan that details the
steps involved in
developing your prototype
and running your market
testing.
 Product development
specialists can help you
streamline your process
and avoid costly mistakes.
Consider commissioning
consultants who specialise
in product engineering and
design - for example,
graphic or industrial
designers, product
engineers, product quality
consultants, computer-
aided design (CAD)
specialists

30. New product prototypes and
market testing
Protect your intellectual
property (IP)
Commission a prototype of your
product
 Make sure
your patents are in place
and your IP is
protected before you
take your product out for
a test run.
 Building a prototype helps establish
whether your idea or invention will
function, provides information
necessary to building your new
product or system, and highlights
any flaws or defects in your design.
 A product mock-up will help you
determine how to
package, brand and market your
new product. It will also help you
test the look and feel of the product
in sample segments of your
market. Calling on technical
expertise to help you at this stage
is prudent, especially if you are not
experienced in product
development

31. New product prototypes and
market testing
Test the product in action Run focus groups
 Put your prototype into
use in the type of
situations it's required in.
Identify the
characteristics that are
most important to your
customers and test those
attributes, repeatedly.
 Enlist the help of a
market researcher to
facilitate a focus group
that will help you gauge
the response of your
sample target market.
Interview your customers
and take your prototype
to as many informed
people as possible.

32. New product prototypes and
market testing
Make improvements Test it in your industry
 You may need to improve
your product based on
feedback. Use this
opportunity to make
changes that will increase
your product's chances of
success. Retest the
product within more
specific conditions that help
you evaluate your changes
- for example, by
conducting a further focus
group with a market
segment that your product
changes will affect most.
 Attend industry events and
trade or consumer expos to
get feedback on your
prototype. Take the
opportunity to generate
market interest and capture
details of interested
customers who want to
hear about your product
launch or even place
advance orders. Consider
whether you need to
prepare an initial run at this
stage to test customer
acceptance more broadly.

33. New product prototypes and
market testing
Develop a marketing strategy Develop a marketing plan
 Your marketing strategy will
help you accurately
segment and target the
right market for your
product, set clear
marketing objectives, and
develop marketing
strategies and tactics for
your market segments.
Start by reviewing all the
information you have
gathered in your business
and market analysis and
market testing. Learn how
to develop a marketing
strategy.
 Your marketing plan will
help you organise and
implement the marketing
tactics for your new
product, plan your
sales and product
marketing activities, and
reach your sales targets.

34. Launching and
commercialising new products
 Introducing a new product into the market is a
significant business achievement. Launching
your new product is your final, important step
in the new product development (NPD)
process. Deciding when, how and where to
launch your product will determine its early
impact on the market.
 Your marketing strategy and marketing
plan will direct your product launch and help
you make the most of your business and
product exposure opportunities. Consider
including some or all of these approaches in
your new-product marketing:

35. Launching and commercialising
new products
Develop a direct marketing
campaign Create your advertising plan
 Direct marketing
methods such as direct
mail, email marketing
and social media
marketing can help you
get straight to the
customers in your target
market..
 Plan and book your
advertising well ahead.
Analyse where your
target market customers
get their product
information.
Book advertising in
industry print and online
publications and consider
product innovation
publications

36. Launching and commercialising
new products
Create communications
materials
Develop a public relations and
news media strategy
 To support your launch
you can create a product
brochure and point of
sale posters to draw
attention to the new
product.
 Use public relations
(PR) to your advantage.
Mainstream media often
pick up innovation
stories. Launch a print
and online news media
campaign and target
interested industry
journalists.

37. Launching and commercialising
new products
Develop a sales plan Develop a pricing strategy
 Develop a sales plan
tailored to your new
product. Sales
planning helps you
define strategies for
your ideal customers and
set realistic,
healthy sales targets.
 Use public relations
(PR) to Your pricing
strategy should identify
an entry-to-market price,
a premium price and a
minimum sale price.

38. Launching and commercialising
new products
Contact your distributors Develop a pricing strategy
 Develop a sales plan
tailored to your new
product. Sales
planning helps you
define strategies for
your ideal customers and
set realistic,
healthy sales targets.
 Use public relations
(PR) to Your pricing
strategy should identify
an entry-to-market price,
a premium price and a
minimum sale price.
Contact your distributors
Give your distributors plenty of forward notice of your new product
launch. Use your forecasts to calculate the product numbers you'll need
to meet your anticipated sales volume.