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NPD: New Product Development

New product development (NPD) is a process that involves generating ideas for new products, screening ideas to determine viability, developing product concepts, creating marketing strategies, conducting business analysis, developing the product, test marketing, and commercialization. The goal is to ensure growth and survival of an organization through new products that enter new markets, replace existing products, or offer new versions of existing products. Key stages include idea generation from various sources, screening ideas, concept development and testing with consumers, determining market potential through research, engineering and producing prototypes, test marketing in small markets, and commercializing successful products nationally.

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57 views16 pages

NPD: New Product Development

New product development (NPD) is a process that involves generating ideas for new products, screening ideas to determine viability, developing product concepts, creating marketing strategies, conducting business analysis, developing the product, test marketing, and commercialization. The goal is to ensure growth and survival of an organization through new products that enter new markets, replace existing products, or offer new versions of existing products. Key stages include idea generation from various sources, screening ideas, concept development and testing with consumers, determining market potential through research, engineering and producing prototypes, test marketing in small markets, and commercializing successful products nationally.

Uploaded by

PaulanthonyGeorge
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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NPD: NEW PRODUCT

DEVELOPMENT
NEW PRODUCT DEVELOPMENT
• NPD is a process which is designed to develop,
test and consider the viability of products
which are new to the market in order to
ensure the growth or survival of the
organization
Charting new product development
WHAT IS A NEW PRODUCT?
• A prod that opens up an entirely a new market
• A prod that adapts or replaces an existing
product
• An old prod introduced in a new market
• An old prod packaged & marketed in a diff
way
WHY DEVELOP NEW PROD.?
• to add to prod portfolio
• to replace declining prod
• to take advantage of new technology
• to maintain market share
• to maintain competitve advantage
STAGES IN NPD
• Idea Generation
• Idea Screening
• Concept development and testing
• Market strategy development
• Business analysis
• Prod development
• Test marketing
• Commercialization
IDEAS GENERATION
• R&D dept
• Prod dept
• Sales dept
• Employees
• Customers
• External sources
• Market research
SCREENING IDEAS
• screening of prod to spot good ideas and drop
poor ones
• Ideas are checked for technical feasibility,
financial viability, and marketability
• the business analyses the prod to evaluate its
demand , marketability and profit potential
NPD AND RISK
PRODUCT CONCEPT
• Product concept: a detailed version of the new
prod idea stated in meaningful consumer
terms
• turning ideas into tangible prod that
consumers perceive as being valuable
• Concept testing: testing new prod concepts
with a group of consumers to find out if the
concepts have a stronger appeal
MARKETING STRATEGY DEVP
• designing an initial marketing strategy for a
new prod based on the prod concept
• formal market research is carried out to assess
the prod market potential
BUSINESS ANALYSIS
• a review of the sales , costs and profit
projections for a new prod to find out whether
these factors satisfy the firm s objectives
• estimates potential sales , profit , return on
investments from new ideas
• projecting probable costs and sales ; will
profits reach the firm targets
PROD DEVP
• R&D turns the idea into a prod
• Engg. and prod issues are resolved
• concerned with design , materials , prodn, processes ,
quality and safety
• developing the prod concept into a physical prod that
the prod idea can be turned into a workable prod
• translating the idea into a reality throgh prototypes or
simulations
• involves the devp of prototype
TEST MARKETING
• launching a prod in a small geographical area
• a field exp in realistic market setting
• releasing the prod into a small but representative mkt
where consumer reaction can be assessed and the
marketing mix checked and adjusuted
• Aims:
to forecast likely results of a national launch
to test the operational effectiveness of the mktg plan
to identify possible prob
to assess consumer reaction
PROBLEMS OF TEST MARKETING
• the test market might not be a true indicator
• environment might change b/w the result and
the national launch
• competition may disrupt the test marketing
• test marketing alerts competitors
Commercialization
• Introducing a new prod into the market
• Timing is critical for success
• There will be heavy promotional expenditure
at the launch
• The prod has to be well targeted and
promoted

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