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.
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
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.
