Unit 2
Lecture 1
What is Product planning?
Explain new product development
process?
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Management Studies
Learning Objectives
• What is Product planning?
• Explain new product development process?
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Management Studies
Product Planning
Developing New Products:
•
Six categories of new products
1.
2.
3.
4.
New-to-the-world products
New product lines
Additions to existing product lines
Improvements and revisions of
existing products
5. Repositioning
6. Cost Reductions
Datta Meghe Institute of
Management Studies
Few Challenges in New-Product
Development
– Change in customers needs and tastes
– New Technologies
– Increased Competition
– Why do products fail?
•
•
•
•
•
Improper market research
Small market size
Product not well designed
Incorrect positioning
High developmental costs
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Management Studies
Organizing New-Product
Development:
– Product managers
– New-product managers
– High-level management committee
– New product department
– Venture teams
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Management Studies
Managing the New Product
Development Process:
• Step 1: Idea Generation
• Step 2: Idea Screening
– Drop Error and Go Error
– 3 Types of product failures: Absolute, Partial &
Relative
• Step 3: Concept Development & Testing
– Product Idea leads to Product Concept
– Use of Conjoint Analysis in Concept Testing
• Step 4: Marketing Strategy Development
– Developing the 4Ps Strategy
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Management Studies
Managing the New Product
Development Process (Cont.):
• Step 5: Business Analysis
– Estimating Total sales, Cost and Profit
• Step 6: Product Development
• Step 7: Market Testing
• Step 8: Commercialization
– When (Timing)
– Where (Geographic Strategy)
– To Whom (Target Customers)
– How (Market Strategy)
Datta Meghe Institute of
Management Studies
The 8-Step New Product Development
Process Summarized:
1. IDEA GENERATION
2. IDEA SCREENING
3. CONCEPT DEVELOPMENT & TESTING
4. MKTG. STRATEGY DEVELOPMENT
5.BUSINESS ANALYSIS
6. PRODUCT DEVELOPMENT
7. MARKET TESTING
8. COMMERCIALIZATION
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Management Studies
The Consumer-Adoption
Process
–Adopters of new products
move through five stages
• Awareness
• Interest
• Evaluation
• Trial
• Adoption
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Adopter Categorization on the Basis of
Relative Time of Adoption of Innovation
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Management Studies
Summary
•
Six categories of new products
•
•
New-to-the-world products
•
New product lines
•
Additions to existing product lines
•
Improvements and revisions of existing products
•
Repositioning
•
Cost Reductions
Why do products fail?
•
•
•
•
•
Improper market research
Small market size
Product not well designed
Incorrect positioning
High developmental costs
Datta Meghe Institute of
Management Studies
Assignment
• Explain what are the steps in New Product
Development
• SAQs and LAQs
• Define
– Product planning
– IDEA GENERATION
– CONCEPT DEVELOPMENT & TESTING
– MKTG. STRATEGY DEVELOPMENT
– BUSINESS ANALYSIS
Datta Meghe Institute of
Management Studies
Reference
• Marketing Management – Kotler, Keller, Koshy,
Jha
• Principles of Marketing – Kotler, Armstrong,
Agnihotri, Haque
Datta Meghe Institute of
Management Studies