The creation of Products with new or different Characteristics that Offer new or additional Benefits to the Customer.

Product Development may involve Modification of an existing product or its Presentation, or formulation of an entirely new product that satisfies a newly defined customer Want .

 Overestimating

market size. Poor marketing research. Design problems. Excessive development costs. Incorrectly positioned, priced, or Advertised. Competitive reaction.

 Original

products. Acquisition. Product improvements. Product modifications. New brands through the firms own R&D efforts.

Proper mkt research and development work it is essential because there are quite high chances of ant new product fail in the mkt. Company should properly evaluate potential mkt .This can be accomplished by proper designing and research.

Durability of the product. Purchasing power of the customers. Can the org. ensure stable supply of the product. Is the product easy to handle during transportation. Is the demand likely to increase due to improve in quality.

Does

the new developed product has the edge over the existing competitive product. Is the product convenient to stock. Are the customer satisfied with the new product.

 Simplification:-It

can be done mainly at two places for product or worker. It basically means eliminating undesirable material . Specialization:- it means expertise in a particular area. As the company expands there are more n more inputs turning into output this often results in high operating cost and decline of profits. This can be solved by minimizing the operations which can only be possible by specialized skills and techniques of producation.

 Standardization-

It means fixation of some appropriate size , quality , manufacturing process , weight and other characteristics according to the utility. E.g. manufacture of T.V sets of standard size of screen by using standard components and technology. MERITS: It reduces cost of production by eliminating wastage. Larger and mire economical size of production.

Use of specialized tools and equipments Encourage manufacturer to produce new styles. Reduces working capital requirement. Demerits For small scale enterprises standardization may not be advantageous. Too much standardization may had an adverse effect on the worker as they set bored of doing same thing again and again.

Idea Generation and Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

 Systematic

Search for New Product

Ideas
Internal

sources

Customers Competitors Distributors Suppliers

Process to spot good ideas and drop poor ones Criteria Market Size Product Price Development Time & Costs Manufacturing Costs Rate of Return

1. Develop Product Ideas into Alternative Product Concepts

2. Concept Testing - Test the Product Concepts with Groups of Target Customers

3. Choose the Best One

Part One - Overall:

Target Market Planned Product Positioning Sales & Profit Goals Market Share
Part Two - Short-Term:

Products Planned Price Distribution Marketing Budget

Part Three - Long-Term:

Sales & Profit Goals Marketing Mix Strategy

Business Analysis

Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives

If No, Eliminate Product Concept

If Yes, Move to Product Development

Standard Test Market

Full marketing campaign in a small number of representative cities.

Controlled Test Market

A few stores that have agreed to carry new products for a fee.

Simulated Test Market

Test in a simulated shopping environment to a sample of consumers.

 It

is necessary for growth of enterprises. It ensures the sales and profit maximization of the firm. All products decline with time (life cycle) The market is dynamic. Technical innovation is permanent etc.

 Social

and government constraints. Shortage of ideas in certain areas. Fragmented market. Cost of developments Capital shortage. Faster required development time. Shorter product life cycle.