USING THE NEW PRODUCT DEVELOPMENT PROCESS, CRITIQUE THE

NEW PRODUCT DEVELOPMENT OF YOUR ORGANISATION.

1.0 Introduction

The marketplace is dynamic and organizations need to continuously audit their product
portfolios, modernize some product line-items, cancelling (divesting) others and creating
new products in line with changes in consumer needs and wants. The processes through
which organizations audit their product, modernize or drop some line-items and create
new products (services) should be continuous. A seamless process is important because
customers should never feel that an organization’s current offerings are out of date or no
longer appeal to them. So the development of new products, launching and managing
them through their product life cycles is important.

My organization’s (District Development Fund) drive is to establish rural road networks,

provide clean water through drilling of boreholes, and aid the agricultural process
through building of dams and provision of tillage services to the emerging farmers and
the rural community and reselling fuel. This is expounded by its mission statement which
is, to provide and maintain sustainable rural development infrastructure,
resettlement, tillage, transport and other services so as to uplift the living standards
of the rural people. Hence I am going to critically look at the organizations’ offerings
through the use of the new product development process.

1.1 New Product Development Process

1.2 Definition

Preparation for full-scale manufacturing/provision of a product or service not previously

offered by that marketer, including these activities: conceptualization; concept testing and
approval; research and development; prototype testing; economic and market research;
and decision making with regard to positioning, pricing, packaging, distribution, and
promotion. A new product or service may be a minor or great variation on an existing
brand, a true product innovation, or an imitation of a product already on the market. New
product development is necessary to maintain market share because demand for most
brands or products tends to decline over time. New product development is also a
necessary response to new technology and changing market conditions. New product
development may be handled by a dedicated department within the company or may be
part of each brand manager's responsibilities.
Stages in new product development. Adapted from Kotler et al (2002:500)

Corporate strategy
Marketing
and other
functional strategies

New product Concept

Idea Idea
development development
generation screening
strategy and testing

Commercialisation Marketing
strategy

Test Product Business

marketing development analysis

1.2.1 New Product Development Strategy

For new product development to be successful an organization needs to have a new

product development strategy which has clear targets, a viable means of achieving the
targets, and a proper method of measuring outputs. The new product strategy should be
traceable back to the strategic plan and the strategic marketing plan and well integrated
with other functional plans of the organization. The strategy should be well-resourced in
terms of human, material and financial resources and coordinated through a cross-
functional new product development team with the leader of the team reporting directly
to the managing director and chief executive officer.

1.2.2 Idea Generation

Idea generation is the systematic search of new product ideas that is both internally and
externally from employees, customers, competitors, distributors and suppliers.
Generating ideas consists of two parts, creating an idea and developing it for commercial
sale. There are many good techniques for idea creation, including brainstorming, random
association and even daydreaming. You may want to generate a long list of ideas and
then whittle them down to a very few that appear to have commercial appeal.

Critique points
However to a greater extent my organization has not actually made use of the talent in the
organization to create new ideas for new products in the company. As this stage suggest,
the company needs systematically search for the ideas both internally and externally ,a
closer look at the firm would reveal that none of this has been taking place. Staff
members are not given room to put forward their ideas. Employees are not regard as
formidable sources of new ideas.

1.2.3 Idea Screening

Everybody likes their own ideas, but that doesn't mean others will. When you are
evaluating ideas for their potential, it's important to get objective opinions. For help with
technical issues, many companies take their ideas to testing laboratories, engineering
consultants, product development firms, and university and college technical testing
services. When it comes to evaluating an idea's commercial potential, many entrepreneurs
use the Preliminary Innovation Evaluation System (PIES) technique. This is a formal
methodology for assessing the commercial potential of inventions and innovations. In
screening new product ideas organizations should be careful about drop-error and go-
error (Kotler, 2000:336). A drop-error occurs when organization rejects an otherwise
good idea. It is easy to find faulty with other people’s idea or actually to look down upon
certain people and therefore dismiss everything they suggest. A go-error occurs when an
organization allows a poor idea to move into development and commercialization.

Critique points
In my organization it seems that even if one comes up with an idea he/she is usually shot
down and the reasons cited in most cases are that the organization does not have
resources, hence in most cases they commit the drop-error. The is also a problem of ideas
not being be fully implemented or explored hence sometimes good ideas in terms of
improved service provision go to waste.

1.2.4 Concept Development and Testing

This stage involves developing product ideas into alternative product concepts. Kotler et
al (2002:506) distinguishes between a product idea, a product concept, and a product
image. A new product idea is simply a suggestion for a probable product the company
could offer to a specified market. A product concept is a detailed version of an idea
expressed in meaningful consumer terms. A product image is the way consumers see a
potential or actual product. Concept development is the act of turning a new product idea
into testable product concept. Concept testing involves taking the product concept to the
relevant target market and getting their opinions. Product concepts can be presented
symbolically or physically to a representative sample target customers. Marketing
literature says concept testing is more reliable if the concept to be tested resembles the
final product or experience. A prototype might have to be made to meet this requirement.

Critique points
As regards my organization this stage is often not fulfilled, that is concepts might be
presented to the target market but implementation of the contributions will not be carried
out due to lack funds. Budget streaming is major curse that would cause such, hence this
would lead the organization to produce half baked services. For example in tillage service
,the clientele might require boom spraying as part of the tillage service but due to
financial constraint the organization might fail to do so .

1.2.5 Marketing Strategy

How will the product/service idea be launched within the market? A proposed marketing
strategy will be written laying out the marketing mix strategy of the product, the
segmentation, targeting and positioning strategy sales and profits that are expected. There
are several ways of writing and presenting marketing strategy in the marketing literature
but all have three broad sections with each section having a number of subsections. The
first section of the marketing strategy should describes current situation of the
organization (i.e. major external environmental influences, current competitive behavior
in the marketplace, competences of the organization), the target market, the planned
product positioning, the sales forecasts, market shares and profit goals for the first few
years.

Critique Points
However the organization has failed to develop a marketing strategy due to the fact that it
is a quasi-government organisation, and in government, marketing is one of the business
aspects which is not considered as important. The organization does not have a
comprehensive marketing strategy for its services, it often relies on word of mouth to
market its services.

1.2.6 Business Analysis

The company has a great idea, the marketing strategy seems feasible, but will the product
be financially worth while in the long run? The business analysis stage looks more deeply
into the cash flow the product could generate, what the cost will be, how much market
shares the product may achieve and the expected life of the product. This can be
expressed as follows;
• Estimate likely selling price based upon competition and customer feedback.
• Estimate sales volume based upon size of market and such tools as the Fourt-
Woodlock equation.
• Estimate profitability and breakeven point.

Critique points
For this stage the organization has managed to come up with a comprehensive business
analysis especially for its fuel selling project in Chalala, Kariba.However for some of its
products such as borehole drilling the business analysis has left a lot to be desired as the
prices including other extra cost which the client would asked to foot have sort of
retarded its gain of the market share. As its mission statement clearly states , the
organization’s drive is to service the rural populace hence the organization will be
impeded from charging competitive rates as most of its clientele are at the low end of the
income bracket.

1.2.7 Product Development

Up to this stage the product would have existed only as a written explanation (concept) so
the next stage is to translate the product concept into a ‘physical’ product. The product
development stage requires a large amount of money in investment especially in physical
products. For example in the case of physical product engineers will develop a prototype,
model or trial product. The prototype is then sent for comprehensive functional tests
under laboratory and field conditions. So the prototype should have the necessarily
physical and psychological features that match customers’ expectations and needs

1.2.8 Test Marketing

Test marketing means testing the product within a specific area. The product will be
launched within a particular region so the marketing mix strategy can be monitored and if
needed, be modified before national launch.

Critique Points
There is no test marketing which occurs in the organization, therefore the products just go
through to the commercialization stage without much modifications done to them.

1.2.9 Commercialization

The decision to commercialization (or not to) should be informed by the previous stage,
market testing. Commercialization is the most expensive stage because the organization
would need funds to invest in the necessary value chain activities in order to meet
demand and all the demands of a product that has just been launched or in the
introduction stage of the product life cycle. It usually follows the following pattern;
• Launching the product
• Producing and placing advertisements and other promotions
• Filling the distribution pipeline with product
• Critical path analysis is most useful at this stage
1.3 Conclusion

Hence one would be justified to say that there is less or none product development which
is carried out by the organization. As one would note I have left out the critique points
section for commercialization stage, this due to the fact that our organization has not been
commercialized hence its operating as a non-profit organization. Therefore it needs to
start rationalizing its operations in order to capitalize on the changes in the industry.
REFERENCES

Marketing Management Notes, N Muzondo

Equation, January 2007

Desa Working Paper No.11, Susanne D Mueller

New Product Development, Wikipedia