NEW PRODUCT&

Development Process

Presentation By:Eliya Shrestha12248

What is product?????

Concept of Productan article or substance that is manufactured

or refined for sale.a thing or person that is the result of an

action or process.

New Product:New product is the complete process of

bringing a new product to the market till its consumption and feedback from the end user of the business chain through the systematic procedure and parameter.

It may be a Consumable product, service or idea.

Different meaning of New products from different perspective.Firms perspective: it is a product to be new if the firm is

manufacturing it for the first time. Firms often consider copies of a competitor’s product as new.

Market Perspective: From the view point of a market, if the product has been introduced to the market for the first time, it is a new product.

Customer perspective: it suggests that newness of a product should be based on customers perception. If a customer group feels that a product is new, it should be treated as new.

Product perspective: From the product perspective a new product is viewed on its disruptive effects on the current consumption pattern.

InnovationsIt is original products that are introduced to

the human race for the first time.Many innovative products are being

introduced into the market every day.Innovative products entail high costs and

risks.Innovation involves considerable time as well

as money

ModificationMany organization avoid innovation due to

high cost and risk factors.And adopt new products modification

strategy as long as possible.Modified product can be termed as a new

product as it requires major change in the marketing mixes.

Product modification entails1. Quality Modification: it is changes relating to a

product’s dependability and durability. It involves alteration of the materials and production process used.

2. Functional modifications: are changes in the product’s effectiveness, convenience and safety. It involves redesigning the product.

3. Style modification: is targeted at enhancement of the sensory appeal of the product by altering sound, taste, texture, smell or visual characteristics.

New Product DevelopmentIt is the complete process of bringing a

new product to market. New product development is described in the

literature as the transformation of a market opportunity into a product available for sale.

it can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief).

A good understanding of customer needs and wants, the competitive environment and the nature of the market represent the top required factors for the success of a new product.

New product development process

Ideation

screening

Concept Development &

Testing

Business Analysis

Market & Beta Testing

Technical Implementation

Commercialization

Product pricing

Idea Generation Ideas for new products can be obtained from basic

research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats).

Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase

Idea ScreeningIt involves a preliminary elimination process

in which a large number of product ideas are screened in terms of the organization’s objectives, policies, technical feasibility, and financial viability

Total ideas are categories into three group. They are, promising ideas, marginal ideas and rejected ideas.

Development and TestingIt is based on the notion that the product idea

is the most critical element in a product and consumers can easily react to product concepts without seeing the physical product itself.

The concept tests are conducted on the belief that people usually are attracted by the idea behind the product before they become interested in the physical product.

Business AnalysisEstimate likely selling price based upon

competition and customer feedbackEstimate sales volume based upon size of

market.Estimate profitability and break-even point.

Beta Testing and Market TestingProduce a physical prototype or mock-up.Test the product (and its packaging) in typical usage

situations.Conduct focus group customer interviews or introduce at

trade showMake adjustments where necessary.Produce an initial run of the product and sell it in a test

market area to determine customer acceptance

Technical ImplementationNew program initiationFinalize Quality management systemResource estimation, Requirement

publicationPublish technical communications such

as data sheetsProgram review and monitoringResource plan publication

CommercializationLaunch the productProduce and place advertisements and

other promotions.Fill the distribution pipeline with product.Critical path analysis is most useful at this

stage.

New Product Pricing[

Impact of new product on the entire product portfolio

Value Analysis (internal & external)Competition and alternative competitive

technologiesDiffering value segments (price, value and

need)Product Costs (fixed & variable)Forecast of unit volumes, revenue, and profit

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The promising ideas are carried on for further testing and analysis while marginal ideas are stored for future use. The rejected ideas are dropped altogether.