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Developing, Testing and launching

new product. Company can add new products by

- Acquisition - New products.

Company can buy other companies.

Company can acquire selected patents from others.

Company can buy license or franchise from others.

Develop new products in it¶s own laboratory.

Contract with independent researcher or firm.

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New product means.

- Original product.- Improved product.

- Modified product.

- New brands.

Six categories of new product- New to the world product.

- New product lines.

- Additions to existing product lines.

- Improvements in existing product lines.- Repositioning.

- cost reduction.

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What are the main risks in developing new

product?

What organizational structure are used in

managing new product development?

How can stages of new product developmentprocess be better managed?

 After product launch what factors affect the rate

of consumer adoption & new product diffusion?

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Factors affecting new product development.

Shortage of important new product ideas.

Fragmented market.

Social & governmental constraints.

Costliness of new product development process.

Capital shortage.

Faster development time.

Shorter product life cycle.

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Effective organizational arrangement.

Product managers.

New product managers.

New product committees.

New product department.

New product venture team.

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Stages in new product development.

I. Idea generation ±

a. Sources of new product ideas ±

- Customer needs & wants, lead users.

- Scientists, designers & other employees.

- Competitors.

- Sales representatives & middle-men.

- Top management.

- Other sources like inventors, universities,

advertising agencies, research firms.

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b. Idea generation techniques ±

- Attribute listing.

- Forced relationship.

- Morphological analysis.

- Need & problem identification.

- Brain storming.

- Syntactic.

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II. Idea screening ±

To reduce the number of idea to an attractive,

practicable.

Company should avoid two errors ±

- Drop error. - Go error.

Product idea rating devices.

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III. Concept development & testing ±

Product idea ± is a possible product that

company might offer to the market.

P

roduct concept ± is an elaboratedversion of idea expressed in meaningful

consumer terms.

Product image ± is a particular picture

that consumer acquire of an actual or potential product.

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Concept development ±

Who is to use this product?

What primary benefits should be built in the product?

What is primary occasion for this product?

Concept testing ±

 Are the benefits clear to you & believe able?

Communicability & Believe ability.

Do you see this product as solving a problem or filling a

need for you?

Need level.

Do other products currently meet this need & satisfy

you?

Gap level ± Need gap score.

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IV. Marketing strategy development ±

The first part describes the size,structure & behavior of the target market,

planned product positioning, the sales

market share & profit goals in first few

years. The second part outlines the product¶s

price, distribution & marketing budget for 

the first year.

The third part describes the long run

sales & profit goals & marketing mix

strategies over time.

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VI. Product development ±

Functional test ±

Product performs safely & effectively.

Consumer testing ±

In home product placement test.

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VII. Market testing ±

Consumer goods market testing -

Trial, first repeat, adoption, purchase

frequency.

Sales wave research.

Simulated test marketing. Control test marketing.

Test markets ±

How many test cities?

Which cities?

Length of test.

What information?

What action to take?

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Business goods market testing ± Product testing.

Market testing.

Product use test.

Trade shows.

Distribution display rooms.

Control test marketing.

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VIII. Commercialization ±

When ( timing )?

- First entry.

-P

arallel entry.- Late entry.

Where ( geographical strategies )?

To whom ( target market prospects )?

How ( introductory market strategies )?

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Consumer adoption process.

I. Concept in innovation, diffusion & adoption ±

Innovation ± refers to any goods, services or idea

that is perceived by someone as new.

Diffusion ± is a process as spread of new ideafrom it¶s source of invention or creation to it¶s

ultimate adopters.

 Adoption ± is the decision of an individual to

become a regular user of a product.

Stages ± Awareness ± interest ± evaluation ± trial

 ± adoption.

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II. Individual differences in innovativeness ±

People differ markedly in their readiness

to try new products.- Innovation ± early adopters ± early majority ±

late majority ± laggards.

Role of personal influence.

III. Influence of personal characteristics on

rate of adoption ±

Characteristics of innovation affects rate

of adoption.- Relative advantage. - Divisibility.

- Compatibility. - Communicability.

- Complexity.

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IV. Influence of organization buyer characteristics on the rate of adoption ±

Organization vary in their readiness to

adopt an innovation.