International Product Development Strategy: Few Example

INTERNATIONAL PRODUCT DEVELOPMENT STRATEGY: FEW EXAMPLES
LOVELY PROFESSIONAL UNIVERSITY, DEPARTMENT OF MANAGEMENT SEMINAR ON CONTEMPORARY ISSUES IN INTERNATIONAL BUSINESS On
International Product Development Strategy: Few Examples

Submitted to Lovely Professional University
In partial fulfilment of the requirements for the award of degree of Master of Business Administration IB Year-2013 Submitted to Dr. Mahesh Chandra Joshi Submitted by: Pankaj Mishra A-03
DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY JALANDHAR NEW DELHI GT ROAD PHAGWARA PUNJAB
INDEX
Serial No.
1. 2. 3. 4. 5. 6. 7.
Topic Name
Introduction Objectives Review Of Literature Several Subset Of PDS Basic Steps of PDS Few Example McDonalds in india Introduction Strategy Business model Volkswagen in india Introduction Strategy Conclusion References
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INTRODUCTION
In business and engineering, new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share.
What is the Product Development Strategy?
Product Development Strategy means those theDeveloping new products or modifying existing products so they appear new, and offering those products to current or new markets. There is nothing simple about the process. It requires keen attention to competitors and customer needs now and in the future, the ability to finance prototypes and manufacturing processes, and a creative marketing and communications plan. Given the rapid changes in consumer tastes technology arid competition companies must develop a steady stream of new products and services A firm can obtain-new products m two ways. One is through acquisition by buying a whole company a patent or a license to produce someone elses product .The other as through new-product development m the companys own research -anddevelopment department By new products we mean original products product improvements product modifications and new brands that the firm develops through its own research-and-development efforts.
When an organization introduces a product into a market they must ask themselves a number of questions. 1. Who is the product aimed at? 2. What benefit will they expect? 3. How do they plan to position the product within the market? 4. What differential advantage will the product offer over their competitors?
Objectives of Product Development strategies:

Provide a product which supports both Dicom as well as related Non-Dicom data and is open for expansion to new image modalities and non image formats Reduce time spent tracking, collating and preparing clinical image data for use in biomarker development Allow improved decision making by providing timely access to clinical image data including viewing of the data Provide tools for standardizing the handling of imaging and data Enable secondary analysis of clinical images which will lead to improved clinical trial and product outcomes Provide a collaborative environment for internal and external collaborators Implement a solution that is compliant with regulatory requirements and which conforms to international data standards Integration of core data with other systems Use state-of-the-art technologies providing the required flexibility and cost savings to the customer.
Review of Literature
Product strategies
When an organization introduces a product into a market they must ask themselves a number of questions. Who is the product aimed at? What benefit will they expect? How do they plan to position the product within the market? What differential advantage will the product offer over their competitors?
Tailor.P, 7/00, We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer
Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building with a product
For a analysis the book of Principles of Marketing by P.Kotler.
Kotler suggested that a product should be viewed in three levels.

Level 1: Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more then just a camera they are purchasing memories.
Level 2Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.
Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the
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additional benefit of peace of mind over the five years should their purchase develop a fault.
Several subsets of product development strategy.

1. Product Development Diversification Strategy This strategy is employed when a company's existing market is saturated, and revenues and profits are stagnant or falling. There is little or no opportunity for growth. A product development diversification strategy takes a company outside its existing business and a new product is developed for a new market. An example of this strategy is a company that has sold insurance products and decides to develop a financial education program aimed at college students. The new product is not revolutionary as there are other companies producing similar products, but it is new to the company producing it.
2. Product Modification Strategy Product modification strategies are generally aimed at existing markets, although a side benefit may be the capturing of new users for the new product. An example of this strategy is toothpaste. Toothpastes that promote whitening ability or anti-cavity attributes are built on existing plain toothpastes that only promise clean teeth.
3. Revolutionary Product Development Revolutionary products are those for which there was no real prior need. Computers and cell phones are good examples. Before these products appeared on the market, consumers did not know they needed them. But, the germ of an idea on how to better communicate resulted in products that have changed the world and have drastically changed the competitive landscape.
4. Benchmarking the Process Whatever strategy is employed, the new product development process must be carefully thought through. It also requires a series of benchmarks along the way. These evaluate whether the process should be continued as new product development is usually expensive and time consuming. For example, if a company is in the process of developing a new product and a competitor beats that company to market with a similar new product, the company must make a "go/no go" decision about its own product development options.
5. Consumers Front And Center Whatever product development strategy a company selects, consumers need to be front and center and involved in the process from start to finish. Set aside enough budget for consumer evaluation of the new product at the concept, prototype and the final product stage. Make sure you not only include those consumers who represent your primary market, but also those to whom your company might appeal to secondarily.
Basic steps of the product development strategy:
1. Idea Generation Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats). Market and consumer trends, company's R&Ddepartment, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features. Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea. Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).
2. Idea Screening The object is to eliminate unsound concepts prior to devoting resources to them. The screeners should ask several questions: Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment / target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price?
3. Concept Development and Testing Develop the marketing and engineering details Investigate intellectual property issues and search patent databases Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate?
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What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering and rapid prototyping What will it cost to produce it? Testing the Concept by asking a number of prospective customers what they think of the idea - usually via Choice Modelling.
4. Business Analysis Estimate likely selling price based upon competition and customer feedback Estimate sales volume based upon size of market and such tools as the FourtWoodlock equation Estimate profitability and break-even point
5. Test Marketing Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance
6. Technical Implementation New program initiation Finalize Quality management system Resource estimation Requirement publication Publish technical communications such as data sheets Engineering operations planning Department scheduling Supplier collaboration Logistics plan
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Resource plan publication Program review and monitoring Contingencies - what-if planning
7. Commercialization (often considered post-NPD) Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is most useful at this stage
8. New Product Pricing Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value and need) Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit
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FEW EXAMPLES
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McDonalds in India
The McDonalds Story - Genesis
The story of McDonalds started in 1954, when its founder Raymond Kroc saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. Kroc proved himself as a pioneer who revolutionized the American restaurant industry. Today McDonalds is the worlds largest fast food chain serving 47 million customers daily. McDonalds is now one of the most valuable brands globally, worth more than $25 billion. The Golden Arches and its mascot Ronald McDonald have gained universal recognition. Though the company has roots in the US, McDonalds today has become an accepted citizen of the world.
McDonalds entered India in 1996. McDonalds India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. McDonald's Corporation (NYSE: MCD) is the
world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing
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consumer tastes, the company has expanded its menu to includesalads, fish, wraps, smoothies and fruit.
McDonalds Strategy:
McDonalds studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering.
It dropped ham, beef and mutton burgers from the menu.
India is the only country where McDonalds serve vegetarian menu.
Even the sauces and cheese used in India are mostly vegetarian.
McDonalds came up with chicken, lamb and fish burgers to suite the Indian palate for non-vegetarian.
McVeggie burger and McAlooTikki for vegetarian.
Target segments are vegetarian people and children, youth and the young urban family.
Strategy aim at making McDonalds a fun place to eat.
In addition, facilities like Wi-Fi are also provided to attract students to the outlets like the one at Vile Parle in Mumbai
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Business Model:
Franchise Model Only 15% of the total number of restaurants are owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality, Service, Cleanliness and Value propositions offered by the company to its customers.
Product Consistency By developing a sophisticated supplier networked operation and distribution system, the company has been able to achieve consistent product taste and quality across geographies.
Act like a retailer and think like a brand McDonalds focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation.
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Volkswagen In India
Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private Limited that assembles, manufactures and distributes Volkswagen vehicles in India. It was established in 2007. Volkswagen (VW) is a German automobile manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Volkswagen is the original and top-selling marque of the Volkswagen Group, the biggest German automaker and the second biggest automaker in the world.
Volkswagen has three cars in the top 10 list of best-selling cars of all time compiled by the website 24/7 Wall St: the Volkswagen Golf, the Volkswagen Beetle, and the Volkswagen Passat. With these three cars, Volkswagen has the most cars of any automobile manufacturer in the list that are still being manufactured. Volkswagen ranks first in spending the most money of any automaker on research and development.
Volkswagen strategies in India
As a first step, the Volkswagen brand launched the globally successful Passat
Product range extends from low-consumption small cars to luxury class vehicles and trucks.
Volkswagen Group India, the Indian subsidiary is a part of Volkswagen AG.
It has its headquarters in Pune, Maharashtra (India).
Volkswagen Group is represented by three brands in India: Volkswagen, Audi and Skoda.
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Volkswagen is the highest volume brand of VW Group.
Volkswagen presents itself in a variety of segments as a premium manufacturer of high-volume models.
Aggressive price tags and high-decibel advertisements.
It will be positioned at the upper-end of the country's mid-sized sedan segment.
Volkswagen India has adopted a top-down strategy to arrive at competitive pricing.
Strive for success in terms of profitability, customer satisfaction and quality, accessing new markets and increasing production output, and attractiveness as an employer.
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Conclusion
The strategy behind the developing and implementing of product is not an easy thing most of organization struggling in this part of business. As I mention in my practical study Procter & gamble says this process the initiative. The whole process is not based on well idea which can took from research department internal or external sources of organization. Idea screening is also very important it is essential to pick the positive values of idea and refine the negative one. Marketing strategy and business analysis is also significant potion. Without dealing market situation and competitor movement it is very dangerous to work some new product development. Product development is not an easy stage its contain different kind of planning like resources planning, strategic planning. The resources of any organization play a vital role in product developing big organization normally rely on there internal resources which are much benefited for them. If we conceder all the part of test marketing it is the key of conclusion the organization understand who much they are good in research or they have good idea of market. Commercialization is also imperative. High class commercialization can create a huge impact and arrange fine plate foam for the product.
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References
Tailor.P, 7/00,Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer Kotler Philip, Principles of Marketing devised a very interesting concept of benefit building with a product. Website : http://learnmarketing.net/product.htm http://www.businessplans.org/Market.html http://www.proddev.com/pdf/Succeeding_at_New_Products_the_PG_ Way.pdf http://www.pg.com
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INTERNATIONAL PRODUCT DEVELOPMENT STRATEGY: FEW EXAMPLES