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8/14/2019 Mkt 207 Assignment
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Presidency UniversityCourse code: MKT 207Spring 2009
Course Instructor: MuzzakerulDate: 29. March. 2009
DEVELOPMENT OF A NEW PRODUCT:
C A R T R A C K E R S
Group Members:Quazi Nayeemul Huq – 081 222 025
Md. Shariful Islam - 081 011 025S. M. Sad Arifin- 081 137 025
Tony Roy – 081 000 025
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Development of a New Product
The following are the processes for the development of a product:
IDEA
GENERATION
IDEA
SCREENING
CONCEPT
DEVELOPMENT
AND
TESTING
MARKETING
STRATEGY
DEVELOPMENT
COMMERCIALIZATION TEST
MARKETING
PRODUCT
DEVELOPMENTBUSINESS
ANALYSIS
NEW PRODUCT
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What is a product?
A product is anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need.
What is a new product?
`A new product is influenced by the perceptions of marketers and
consumers. It usually refers to a product which is new to the company or any
product that is offered by a company which is relevantly different from the
other products available in the market. Example: Square Group introduced
Radhuni Masala Powder to the market whereas the company usually focused
mainly on Pharmaceuticals before.
What is the new product development process?
New product development is the development of original product,
product improvements, product modifications and introducing new products
in a market through the firm’s own Research & Development team.
The strategies that are followed in developing a new product are:
1. Idea Generation
2. Idea Screening
3. Concept Development & Testing
4. Marketing Strategy Development
5. Business Analysis
6. Product Development
7. Test Marketing
8. Commercialization
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IDEA GENERATION
The idea generation is the systematic search for new product idea. We have
generated some ideas for our new product. The ideas are as follows:
I) Car Tracking Device
II) Automatic Exam Paper Checking Machine
III) Exporting Dry Fish
IV) Producing Local Automobiles
V) Local Canned Pure Juices
VI) Navigation System in Cell Phones
VII) Wireless Internet in Shopping Malls and Universities
VIII) HIV Vaccination
IX) Tablet for not Smoking
X) Exporting Puffed Rice
XI) Exporting Jack Fruit
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IDEA SCREENING
Screening new-product ideas in order to spot good ideas and drop poor ones
as soon as possible. The screening stage is needed because it is the first stageat which alternative ideas are stored. Sometimes the new ideas are also
rejected. The Research and Development at first goes through the positive
and negative sides of all the ideas generated of developing a new product
and then takes the decision of choosing which product to develop. There are
three basic questions for screening new product ideas. The questions are:
1. Whether the product is needed by the consumer?
2. Whether the company is well equipped to develop the
product?
3. Whether the product will bring profit to the company?
The answer to these questions can be achieved by some marketing researchand discussion with the marketing department of the company, some senior
and experienced executives and also by running a survey to a certain number
of target customers.
We followed the same procedure and came to a decision that “Car
Tracking Device” should be our screened idea. This is because it is very
essential for our country Bangladesh where car stealing rate is increasing at
a very high rate. The device is used in many countries and statistics show
that by using the device stealing of cars fell by 80%. When our companysurveyed with 100 target customers, 90% of the people gave positive
feedback. The rest were not sure but did not give any negative answer.
Therefore, we went ahead with our screened idea that is “Car Tracking
Device”.
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CONCEPT DEVELOPMENT & TESTING
The third stage is Concept Development and Testing. At first we should
know what this segment is about.
CONCEPT DEVELOPMENT: A detailed version of the new-product idea
stated in meaningful consumer terms.
CONCEPT TESTING: Testing new-product concepts with a group of target
consumers to find out if the concepts have strong consumer appeal.
Let us first focus on the Concept Development of our Car Tracking Device.
We named the device as “Car Trackers”. Our product has a wide range of
features among which switching off a car in a matter of seconds in 10
seconds if found stolen by the owners mobile or online. Not only that, the
device also shows the location of where the car has been taken via internet.
Features:
Bonnet Lock
Battery Tampering Alerts
Remote Immobilization and Activation
24 hrs Nationwide Control Room Access
Over Speeding
Ignition On and Off
Location – Date – Time – Duration
Cell Track Harsh Braking
Remote Door-Lock Control
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“Car Trackers” will be available to customers at only Tk. 15000
and the device will be having a maintenance fee of Tk 1200 per
year.
Now, let us see the Concept Testing section. In this section, we will run asurvey to our target customers. The questionnaire is as follows:
1. Do you need Car Tracking Device for your car?
(a) Yes (b) no
The answer was yes from 90% customers.
2. Do you think it will be effective and efficient?
(a) Yes (b) No
Maximum said yes.
3. Is Tk. 15000 too high for the device?
It is reasonable since it will be used for protecting an expensive product.
4. Tk. 1200 per year for maintaining the device. Is it ok?
Most of our customers said that it is fine.
5. Do you think switching the car off through mobile and online is a very
good idea?
We got a positive response from everyone.
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6. Via Internet the cars location can be traced out. Do you think it will be
helpful?
Yes was the answer from maximum.
7. Will you install the product if it is launched in the market?
90% said definitely.
Therefore, from the survey we can say the product that we are about to
launch in the market is in demand and the product will be helping themvery much as 90% customers was looking forward to purchase the
product if available in the market.
MARKETING STRATEGY DEVELOPMENT
Designing an initial marketing strategy for a new-product based on
the product concept is known as Marketing Strategy Development.
Our target customer range is the upper and the middle class of our
society. They are the people who has an average income that is,
they can afford to purchase a car and for protecting the car from
getting stolen, they would buy the tracker since car is an expensive
item.
The company will aim to sell about 50,000 car trackers which will
gain Tk 250,000,000 of profit in the first year.
The device will be costing Tk 15000. The device will be available
in different car showrooms and car accessory shops. The
advertising process will cost Tk 100,000,000 for the first year. And
the production cost is Tk 400,000,000.
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In this way, the company to capture 75% of the market share. By
analyzing all positive and negative sides the company came to this
breakdown.
In the next step, Business Analysis will help us to find out more
about the success of launching this product in the market.
BUSINESS ANALYSIS
It is a review of the sales, costs, and profit projections for a new
product to find out whether these factors satisfy the company’s
objectives.
Business analysis is done based upon the results of the concept test
and considerable managerial judgment, estimate of sales, costs and
profit that will be made. Marketing analysis is done to produce
sensible figures. This will identify the target market, its size and
projected product acceptance over a number of years. It can be
done through an Income Statement. Our Income Statement is as
follows:
CAR TRACKERS
Income Statement
For the first year
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Description Debit (Tk) Credit(Tk)
Sales (50,000×Tk15000)
- Production Cost (50,000×Tk8000)- Advertising & Other Expense
- Net income
400,000,000
100,000,000
250,000,000
750,000,000
750,000,000
750,000,000
PRODUCT DEVELOPMENT
It is developing the product concept into a physical product in
order to ensure that the product idea can be turned into a workable product. The concept of the “Car Trackers” is passed through the
business test. After passing the test the product is finally
developed.
TEST MARKETING
The stage of new-product development in which the product and
marketing program are tested in more realistic market settings is
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called Test Marketing. In this stage the actual product is shown to
its customer to find out the demand of the product. It can be done
in the form by participating in a Motor Fair for our product. Our
product successfully passed this stage. We got a huge responsefrom the customers as 500 customers ordered in the first day.
COMMERCIALIZATION
Introducing a new-product into the market is called
Commercialization.
After passing the through all the stages, it is now time for our new
product to go into full scale production. It is a very expensive part
as over here the mass production of our product starts. We need to
be careful as we have to maintain the quality of the to survive in
the market.SUMMARY:
DEVELOPING A NEW PRODUCT
We can say that if we follow all the eight steps for developing a
new product, we will gain success. The eight steps are:
1. IDEA GENERATION: The systematic search for new-
product ideas.
2. IDEA SCREENING: Screening new-product ideas in order
to spot good ideas and drop poor ones as soon as possible.
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3. PRODUCT CONCEPT:A detailed version of the new-
product idea stated in meaningful consumer terms.
CONCEPT TESTING: Testing new-product concepts with a
group of target consumers to find out if the concepts havestrong consumer appeal.
4. MARKETING STRATEGY DEVELOPMENT: Designing
an initial marketing strategy for a new-product based on the
product concept.
5. BUSINESS ANALYSIS: A review of the sales, costs, and
profit projections for a new product to find out whether these
factors satisfy the company’s objectives.
6. PRODUCT DEVELOPMENT: Developing the product
concept into a physical product in order to ensure that the
product idea can be turned into a workable product.
7. TEST MARKETING: The stage of new-product
development in which the product and marketing program
are tested in more realistic market settings.
8. COMMERCIALIZATION: Introducing a new-product into
the market.
CONCLUSION
In the end, we can say that the eight steps will help a company to
develop a new product. It is the best way to find out what thecustomers actually require in the market. Success is guaranteed to
come if we all follow these steps.
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Thank you!!!!