New Product Strategy

(Learning Outcomes)

10MBI0039

In the first session I understood the concept of new product and the various aspects of ideation, creativity, innovation and how to come up with a new product and introduce the same in the market. How uniqueness can play a vital role in the success of new product etc was discussed.

Second Session: A small assignment to create a new product out of a matchbox was assigned to us from which we learned how even with an existing product with new innovative ideas it can be introduced as a new product.

Third Session: Discussed about focus group and various other idea generation concepts. Understood the concept of focus groups, Brain storming and product differentiation and categorizing the products and ideas related to the product.

Fourth Session: A case study on Food World. Learning’s from the case, how to derive information from consumers through surveys for the purpose of strategizing new product development process in all aspects. Positioning strategy, Distribution and product strategy. How to target customers according to the product being developed or introduced and position the same in the market.

Fifth Session: Dell case study, developing a new laptop and deciding the best solution out of the options available. In this case there was a task of decision making out of three decision options provided, analysing the pro’s and con’s of each option provided and considering the potential out comes both financially and operationally and deciding one best solution given the situation was the learning’s out of this Dell case study.

Sixth session: New product Development, ideation , screening , concept testing, market strategy development, business analysis, product development, business analysis, Test marketing , Commercialization was discussed and understood.

Seventh Session: Learning’s

Stages in New product development:

Idea Generation Idea Screening Concept development and testing

Market strategy development Business Analysis Test marketing Commercialization

Idea generation: is a continuous systematic search for new product opportunities. It involves delineating sources of new ideas and methods for generating them.Ideas for new product can be obtained from basic research using SWOT analysis (opportunity Analysis), Market and consumer trends, Company’s R&D department, competitors, focus groups, employees, sales people.

Idea Screening: The object is to eliminate unsound concepts prior to devoting resources to them.

The screeners should ask several questions:

o Will the customer in the target market benefit from the product?o What is the size and growth forecasts of the market segment / target market?o What is the current or expected competitive pressure for the product idea?o What are the industry sales and market trends the product idea is based on?o Is it technically feasible to manufacture the product?o Will the product be profitable when manufactured and delivered to the

customer at the target price?

Concept testing: present the consumer with a proposed product and measure attitudes and intention at this early stage of development.

Concept testing of prototypes can help avoid costly mistakes.

Market Strategy Development

1. Describe market’s size, structure and behaviour, the planned product positioning, and the sales, market share and profit goals for first few years.

2. Outlines the planned price, distribution strategy, and marketing budget for the first year.

3. Describes the long-run sales and profit goals and marketing-mix strategy over time.

Business and Financial Analysis

Estimate likely selling price based upon competition and customer feedback.

Estimate sales volume based upon size of market.

Estimate profitability and breakeven point.

Test Marketing

Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan.

Commercialization

Commercialization involves implementing a total marketing plan and full production

Launch the product

Produce and place advertisement

Fill the distribution pipeline with product

Critical path analysis is most useful at this stage.

Eighth Session:

The goals of an overhauled new product process:

Goal 1- Exemplary Quality of Execution- Second to none.

Goal 2- Sharper focus, better project prioritization

Goal 3- A strong market orientation

Goal 4- Better up-front homework and sharp, Early and stable product definition

Goal-5 Fast paced parallel processing

Goal-6 A true cross functional team approach

Goal-7 Products with Ca- Differentiated products, unique benefits, superior value for custom

Goal-8 A fast paced and flexible process

The Structure of the stage gate process ideation:

Stage 1- Preliminary Investigation

Stage 2- Detailed Investigation (build the business case)

Stage 3- Development

Stage 4- Testing and validation

Stage 5- Full production and market channels.

The gates of the Process:

Gate 1- Initial screen

Gate 2- Second screen

Gate 3- Decision on Business case

Gate 4- Post Development Review

Gate 5- Pre commercialization business analysis, Post implementation review.

Third Generation Stage gate process six fundamental F’s

- Flexibility- Fuzzy (conditional gates)- Fluidity- Focus (project prioritization and portfolio management)- Facilitation- Forever green and improving

Role of Senior Management:

- You must embrace long term commitment to product development.- Develop vision, objectives and strategy- Install a systematic high quality new product process- Make all resources- Foster innovation

Drivers of Innovation:

- Technological advances- Changing customer needs- Shortening product cycles- Increased world competition.

Categories of newness:

- New to the world products- New product lines- Additions to existing product lines- Improvements and revisions to existing products.- Repositioning- Cost reductions.

Ninth Session:

Discussed T.I cycles case and learned about the 4 P’s i.e. Price, place, product and promotion and how important it is to identify solutions for various problems.

And learned how to handle a problem of expanding or sustaining a company’s performance in the long run and achieving a proposed target

Tenth Session:

Understood the importance of branding and how the name of a brand plays a vital role in the consumer purchase behaviour, learned about the various factors to be considered while naming a brand such as sound symbolism, use of semantics and the relevancy of the brand name to the concerned product attributes.

Discussed the Mahindra Scorpio Case, How Mahindra positioned its SUV vehicle “Scorpio” in the market , their promotional and other marketing activities, how they were able to tackle global competition in terms of brand image and branding.