Product Strategy : PRODUCT
New product development process
It is a seven-step process (Taylor, 1984) for
developing new products.
Product Criteria
Idea Generation
Idea Screening
Business Analysis
Prototype Development
Market Test
Full Commercialization
Product Criteria
It defines the kinds of products a firm will be selling
or won’t be selling.
Product criteria can be divided into “Must” and
“Wants”.
Menu of possible product criteria
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Corporate image fit
Product standardization
Product line compatibility
Stage in product life cycle
Unique benefits
Few substitutes
Affordable development cost
Fast development period
Production capability and capacity
Raw materials availability and
affordability
Minimal after sales service
requirements
Affordable capital requirements
Profitability in %
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
Low break -even point
Payback period
Market share potential
Sales volume potential
Sales trends for the last few years
Repetitive needs / purchases
No sales seasonality
Distribution compatibility
Existing Management / marketing
skills
No government restriction
No legal restrictions
Possible product for retail stores
1.
2.
3.
4.
5.
6.
Product Uniqueness
Good Value
Advertising Support
Profitability
Introductory discounts or allowances
Company reputation
Idea Generation
Ideas need not always come from crisis situations.
There must be systematic ways to regularly get new
product ideas.
A creative source of product idea is available by
simply talking to customer and the sales force often, most
especially about problems both groups are encountering
with existing products
Marketers can also get new product ideas by
analyzing and anticipating changes in industry, technology,
or environment.
From a marketing standpoint, new ideas can be
sourced by combining the answers to the questions
“who” (Target market), “what” (Value proposition), and
“how and where” (Business system).
Marketing techniques to get new product
ideas

Mission Statement – It answer the question “What
business are we in?”. It will dictate what type of
products or services they will offer.
A three-dimensional mission structure identifying
customer benefit, customer groups, and substitutes is
suggested to define possible mission statement
products.
Examples of new product ideas from mission statement
PRODUCT
BUSINESS
POSSIPLE NEW
PRODUCT
Auto Repair
Providing safety and
comfortable drives
Automotive spare parts,
seatbelts, car fire extinguisher
Water Purifiers
Consumer healthy lifestyle
Air purifiers, foot detox, mooil cookware, food,
supplements, exercise
Photocopier
Office productivity
Computers, facsimile
machines, paper shredders,
PABX System
Crayons
Inspiring creative selfexpression
Brushes, coloring books,
marking pens
Bus
Moving people and cargo
Taxi, jeep, trucking
Three-dimensional structure for a mission
statement

Focus Group Discussions (FGDs) – The FGDs are
conducted in a meeting room discuss the issues and the
propositions stimulates a wide range of responses and
interactions enabling marketer to understand the
customer better.
Usually, the FGDs panelist are existing customers or
potential customer of a product category.
 Competitive
products Segmentation – Products that
compete in a specific market can be grouped to define
segments based on the product identities rather than on
individual company insights.
For example: Consumer with headaches may define
diff. analgesic products like Bayer (Aspirin) and Biogesic
(Paracetamol); they may also include Efficasent oil or even
Tiger Balm ointment.
 Perceptual
Mapping – it is an alternative technique in
Competitive Product Segmentation, it concentrates only
on the determinant attributes (most important attributes)
of a product.