1. Development
of
New Product

2. New product development (NDP)
 NDP is a process which designed to
develop, test and consider the
viability of products which are new to
the market in order to ensure the
Growth or survival of the
organisation.

3. New Product Importance
 Company . . .  Societal . . .
 Sales Revenue  Create jobs
 Replace “fading products”  Increase standard of
living
 Spread Risk
 Increase competition
 Innovate or Die

4. Categories of New Products
 Creates New Market with Radically New
Product or Product Line.
 Enters Existing But Not Previously
Targeted Market with New-Product or
Product Line.
 Stays in Existing and Previously Targeted
Market by Enhancing Existing Product
or Product Line.

5. The New-Product PLANNING
1. IDEA
GENERATION
PROCESS
2. IDEA 3. Concept 4. BUSINESS
SCREENING Development & ANALYSIS
Testing
5. PRODUCT
DEVELOPMENT
6. TEST
7. COMMERCIALIZATION
MARKETING

6. Step 1. Idea Generation:
An ongoing search for product ideas to be
consistent with target market needs and the
organization’s goals
Sources of Product
Ideas sources
Internal
Customers
Competitors
Distributors
Suppliers
Product idea
Principle: Set the climate for innovation

7. Step 2. Idea Screening
 Process to spot good ideas and drop poor ones.
 Criteria-
 Market Size,
 Product Price,
 Development Time & Costs,
 Manufacturing Costs &
 Rate of Return.

8. Step 3. Concept Development & Testing
1. Develop Product Ideas into
Alternative
Product Concepts
2. Concept Testing - Test the
Product Concepts with Groups
of Target Customers
3. Choose the Best One

9. Step 4. Business Analysis
Step 5. Product Development
Business Analysis
Review of Product Sales, Costs, and Profits Projections to See if
They Meet Company Objectives
If No, Eliminate
Product Concept
If Yes, Move to
Product Development

10. Step 6. Test Marketing
Standard
Test Market Controlled
Test Market
Full marketing campaign A few stores that have
in a small number of agreed to carry new
representative cities. products for a fee.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.

11. Step7.Commercialization Stage
 Offer the product with commitments of full scale
resources and effort
 Decisions:
 Timing -When? Seasonal influences?)
 Geographical strategy -Where? Weather?
 Target markets
 Marketing mix strategies (4p’s)

12. Causes of New Product Failures
 Overestimation of Market Size.
 Product Design Problems.
 Product Incorrectly Positioned, Priced or
Advertised.
 Costs of Product Development.
 Competitive Actions.

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