New Product Development_final
Transcript of New Product Development_final
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New Product Development
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Innovation
Innovation refers to developmental changes in the
existing products or creating new products for
satisfying customers needs better.
These Developments may be in terms of
Modifications in product Through Technology or
throughMarket Changes
Types
Radical innovation and Incremental Innovation
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Incremental Innovation
Minor changes being made in product
design and usage.
This form of innovation takes place
continuously in any organization.
Has low risk and a high degree of
certainty.
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Incremental Innovation
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Radical Innovation
Using new technology to develop and
produce altogether different product
Examples are the television, personal
computer, VCR and such others.
These are high-risk innovations involving
long term R&D efforts.
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Types ofInnovation
Product innovations : i-Pod
Process innovation : TOYOTA and Tata
Strategy innovation : When you find a better way
of serving your customer.
Air Deccan : A couple of years ago it looked at low-cost airlines across the world, picked some of the
best practices, and then made itself.
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Why Innovation??
Survival
Changing Customers Preferences
Competition First Mover Advantage
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Factors Affecting Innovation
Management
Top Management Plays a key Role
Management Support : An Important Aspect
Structure
Bureaucratic : Innovation process gets delayed
Flat Structure : Faster Decisions regarding new
products
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Factors Affecting Innovation
Market orientation
An organization highly market oriented
encourages Innovation
Focus on Market Share, customer Loyalty
Success Rate
Previous innovations and acceptance
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Innovation and Competitiveness
To stay in a competitive market a firm has to constantly
innovate.
Innovation is the key to sustainability
Not only products but even strategies
Coca-Cola and Pepsi. While these companies fought
on market share, somebody else went ahead andlaunched Red Bull and Gatorade. Both were extremely
innovative products that quickly made huge markets for
themselves.
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Technology and Innovation
Jack Welch, Former CEO of GE
Technology is the driving force behindevery product innovation
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Technology and Innovation
Era of Technology
Improve Product Performance
Distribution : Online Buying ( AMAZON) Electric Cars
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Case Study
Have you ever seen thesquare yellow paper that
you use to makes noteson and pastes it to booksand newspapers, or even
on the refrigerator?
Isnt it interesting how you can
stick it somewhere then remove it
easily and stick it somewhere else
entirely?
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POST IT NOTES
Launched in 1974
Developed by an Employee at 3M
Unable to remember meeting timing, maintaining
files.
Researched and Developed a Not-So-Strong
Adhesive
When the employee presented his idea to 3Mmanagement he was able to research and
develop the new product with their support.
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Industrial Product
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New Products
1. New to the world products
2. New product lines
3. Addition to existing product lines
A supplier of industrial gases may introduce
a new, smaller cylinder to include in an existing product
line, aimed at serving customers who require smalleramounts of gas.
4. Repositioning
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Product Policy
1. Changes in customer needs and preferences
2. Changes in laws, rules and policies
3. Changes in technology: Jelly filled telecom
cables being replaced by fiber optic telecom
cables
4. Product Life Cycle