new_product - group 5

8/8/2019 New_product - Group 5

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LOGO

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NEW PRODUCTSNEW PRODUCTS

PRESENTRD BY GROUP NO- 05

Abhijit Chakraborty

Himadri Sharma

Sanjeev Sharma


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In marketing, a product is anything that can be offered to a

market that might satisfy a want or need.

It may refer to a single item or unit

a group of equivalent products

a grouping of goods or services

Product can be also defined as bundles of tangible and

intangible attributes.

Tangible (Material, size, weight, design, packaging, etc.)

Intangible (Brand image, styling and other benefits)2

WHAT IS A PRODUCT ?


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It can be introduced mainly for two purposes

Offensive ( to gain sales or sales)

Defensive ( to match or block competitors )

While offering new products in market, two

things comes in mind

Which brand it is belonging

Who are the target customer

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NEW PRODUCTS


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TYPES OF NEW PRODUCT

oNew to the world products are products that create entirely newmarkets.

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oNew product lines are products that represent entries into existingmarkets that are new to the firm.


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o Line extensions are new products that allow the firm to extend its

served market by offering different benefits.

o

Cost reductions are versions of existing products that providecomparable performance at lower cost. E.g.- Tata nano


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o Improvements to existing products are usually designed as replacements for existing

product offerings. E.g.- Window7, LCD is replaced by LED with 3D screen.

o Repositioning are modest technical improvements that allow a product to offer

new applications and serve new needs. E.g.- Fiat cars

Old model New model


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It can be done through some process like continuous

quality improvement, redesigned, and updated styling.

Product modification can be of three types

a) Clearly better e.g.- an upgrade.

b) Different e.g.- ingredient change that is likely to

appeal more to some customer.

c) Inferior e.g.- substitution of a less expensive

ingredient.

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PRODUCT MODIFICATION


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Modification can also occur in offering.

Changing distribution channels

Lowering price

Change in advertising Service experience

Packaging (McD change in packaging from plastic to

biodegradable paper)


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ASSESSING THE IMPACT OF PRODUCT REDESIGN ON CUSTOMER

Current Customer Reaction Response after trial Impact on sale/profit

1) Loyal A. Try Prefer Gain

Like Neutral

Not like Loss

B. Not Try Loss

2) Occasional A. Try Prefer Gain

Like Neutral

Not like Loss

B. Not Try Loss

3) Non Customers A. Try Prefer Gain

Like Neutral

Not like Loss

B. Not Try Loss 9


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LINE EXTENSIONS

It can be defined as introducing additional product variant

that use the existing brand name.

It is a popular way to capitalize on the original brands

equity.

A line extension often adds a different flavor or ingredient

variety, a different form or size, or a different application for thebrand.

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Cokes line extension

Surf, Surf Excel, Surf Excel Blue.

EXAMPLES


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PROS

o Can appeal to multiple segment by giving slightlydifferent wants and preferences (e.g.- For car model like

ac or non ac etc, multiple fares and conditions for airline

seats) .

CONS

o It can confuse the customer.

PROS AND CONS OF LINE EXTENSION


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Adding Dro

Customer based:

New customer attracted Old customer lost

Old customer cannibalization Customer switching

Confusion and dilution of brand equity Signal of weakness

Operation based:

Loss of economies of scale Impaired efficiencyProblems in gaining additional distribution Maintaining distribution

Additional Servicing needs Servicing old versions

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CONSIDERATIONS IN ADDING OR DROPPING A VARIANT


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1)Idea Generation

2)Concept Development

3)Feasibility Screening4)Concept Testing

5)Product Development

6)Product Testing

7)Market Testing

8)Go No go Decision

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PRODUCT STAGES


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IDEA GENERATION

Idea for product modifications and extensions comes from

many sources, both proactive and reactive.

1) Customeranalysis

Usage/needs analyses and survey of attitudes and

attribute importance, including both unstructured ( e.g-

focus groups) and structured( e.g- conjoint analysis)

approaches.

2) Competitoranalysis

What competitors sell or working on.

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3) Activesearch

particularly of new product and process in other areas

with an eye toward incorporating them in the companyown product.

4) Categoryanalysis

Examining changing social trend and technologies.

5) Brainstorming


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Number of sources that lead to new products

1) Customers or ex- or noncustomers who rejectcurrent products

2) Employees, especially the sales force

3) Suppliers

4) Distribution Channels

5) Operations people6) Internal and External R&D


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CONCEPT DEVELOPMENT

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The organisation may have come across what they believe

to be a feasible idea, however, the idea needs to be taken to

the target audience.

What do they think about the idea?

Will it be practical and feasible?

Will it offer the benefit that the organisation hopes it will?

Have they overlooked certain issues?


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FEASIBILITY SCREENING

The object is to eliminate unsound concepts prior to devoting

resources to them.

The screeners should ask several questions:

Will the customer in the target market benefit from the product?

What is the size and growth forecasts of the market segment/target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based

on?

Is it technically feasible to manufacture the product?

Will the product be profitable when manufactured and delivered to the

customer at the target price?


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Concept testing present the consumer with a proposed

product and measure attitudes and intention at this early stage

of development

The main purpose of concept test are :

1) Choose the most promising from a set of alternatives.

2) Get the initial notion of the commercial prospects of a concept.

3) Find out who is most interested in the concept.

4) Indicate what direction further development work should take.

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CONCEPT TESTING


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The data collection procedures fall into three major

categories:

o SurveyGetting large samples for projection purposes.

Through survey basically gather four types of

reaction.

a) Attitude ( Is the product good/bad?)b) Uniqueness/differentiation (How unique is this

product?)

c) Relevance (How relevant is the product to you?)

d) Intention (Will you bye the product?)


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o Focus group

The strength of focus groups is their

diagnostic power in that they can be used

to get detailed discussions of various aspects

of the concept.

o Demonstrations

A popular way to present a concept is to gather a group of

consumers, present them with a story about the new product and record

their reactions.

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PRODUCT DEVELOPMENT

It converts the concept into a working product or a physical

form

It is done by developing the product architecture; design

function, value, and appearance of the product; create and

develop product specifications; and consider manufacturing

and operational costs and operational constraints or tradeoffs.

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PRODUCT TESTING

It involves placing a product for sale in one or more

selected areas and observing its actual performance under

the proposed marketing plan.

The purpose of product test is to

1) Uncover product shortcomings

2) Evaluate commercial prospects

3) Evaluate alternative formulations

4) Uncover the appeal of the product to various marketsegments.

5) Gain ideas for the other element of the marketing

program.

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There are three major types of product use test.

First phase:

These initial tests are diagnostic, how the product actually used

and are directed toward eliminating serious problem with the

product.

Second Type:

It includes a limited-time-horizon forced-trial situation where

customer are given the product to use and asked for their

reaction to it.

Third Type:

In this type test requires placement of the product in home ( or

business settings for industrial product) for an extended period.25


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The purpose of such test is to

Predict sales and profits from a major product launch.

Practice so that marketing, distribution, and production skills

are developed before entering full scale operations.

In marketing testing several decisions must be made.o Where to test

o What to do

o How long

o Cost26

MARKET TESTS


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GO NO GO DECISION

After doing lots of exercise on the new product

development one should able to understand/make decision

whether go or not go for the new product launch.

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3000rawideas

(.03%)

300submitted

Ideas(.3%)

125beginning

Projects(.8%)

9large

developments

11%

4major

developments

25%

1.7launches

60%

1commercial

success

Source : Stevensand Burley, RTM May-June199728

Success Rate Entirely New Products


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WHY DEVELOP NDP

o To add to product portfolio

o To create stars and cash cows for the future

o

To replace declining product

o To take advantage of new technology

o To defeat rivals

o

To maintain/increase market share

o To keep up with rivals

o To maintain competitive advantage

o To full gap in the market29


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REALLY NEW PRODUCTS

They create or expand a new category, by making cross-

category competition.

They are new to customers.

Which raise broad issues such as appropriate channels of

distribution and organizational responsibility.

Create a need for infrastructure and software.


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EXAMPLES

Packaged goods : Bottled tea, light beer, frozen vegetables

Services : Overnight air delivery, ATMs, Credit cards, etc.

Durables : Microwave ovens, room air conditioners,

Dishwashers

Industrial products : Semiconductors, printing presses.


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GETTING IDEAS FOR REALLY NEW PRODUCTS

Asking or listening to dissatisfied customers.

Asking non representative customers.

Using open-ended, qualitative procedures.

Involving customers especially for industrial products.


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EVALUATING REALLY NEW PRODUCTS

CONSTITUENCY

ASPECTS CUSTOMERS

WITHIN

COMPANY SUPPLIERS CHANNELS PUBLIC

Relative

Advantage

Compatibility

Risk

Complexity

Communicability

Trial ability


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NEW PRODUCT CAN BE USED

o Increase/defend market share by offering more choice orupdating older products

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Appeal to new segments

o Diversify into new markets

o Improve relationship with distributors

o Maintain the firms reputation a leading edge company

o Even out peaks and troughs in demand

o Make better use of the organization's resources34


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new_product - group 5

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