THE NEW PRODUCT DEVELOPMENT

PROCESS
There are three distinct categories of new
product:
Definition of a New Product
are truly unique products. They satisfy a real
need that has not been satisfied at the time
they are introduced.
Innovative
Products
are significantly different from existing
products in form, function, and benefits.
Replacement
Products
are new to the company but not entirely new
to the market.
These products imitates competitive products
with identical features; best described as
"me, too" products.
Imitative
Products
New Product Development
Process
A new product is developed
through a series of eight stages.
The formal development of new
products provided benefits such as
higher success rates in terms of
sales and profits, increased
customer satisfaction, and
achievement of better quality and
low-priced products.
- Involves a continuing
search for product ideas
that are in line with the
need of the target market
and the objectives of the
organization.
1. IDEA GENERATION
- Is the stage in which
alternative ideas are
sorted.
- This involves analyzing
new ideas to determine
which need further study
and which are to be
rejected.
2. IDEA SCREENING
- Is the development of screened
ideas into product concepts.
- A Product Concept is a concrete
version of the product idea
detailing all of the product's
characteristics, color, style, design,
cost, size, use, etc.
- Concept Testing- involves testing
the product concept with a group
of consumers to determine their
reaction.
3. CONCEPT DEVELOPMENT AND
TESTING
- Involves developing a
marketing strategy in
introducing product to the
market.
- It consists of 3 parts:
a. The first part describes the
target market, positioning of
the product, the market share
and the target sales and
profits for the first few years.
4. MARKETING STRATEGY
DEVELOPMENT
b. The second part
describes the pricing,
distribution, and
marketing budget for the
first year of production.
c. The third part describes
the long-term potential of
the goods of the company
in terms of sales, profits,
and marketing mix
strategy.
- Requires both
creativity and analysis.
- Emphasizes
performance criteria
and chances for success
in the marketplace.
5. BUSINESS ANALYSIS

- Follows favorable result of
the business analysis, that is,
a prototype or a trial model
of the product is developed.
- For tangible Products, a
small quantity of the
prototype is manufactured
according to designated
specifications.
6. PRODUCT DEVELOPMENT
- Is an experimental procedure
in which the company tests a
new product under realistic
market conditions in order to
obtain measure of its potential
sales when it is distributed
nationally.
- In this stage, the design of the
product and the planned
production may be modified
based on the results of the
market tests.
7. TEST MARKETING
- Is the implementation of
full-scale production and
distribution.
- This entails great financial
risks because it involves
huge amounts of physical
as well as human
resources.
8. COMMERCIALIZATION
The Product Life Cycle
The Product Life Cycle is a
graphic presentation of a
product's sales history from its
birth, or market beginning, to its
death, or the withdrawal from
the market.

Product Life Cycle Stages
At this stage, the product is
launched full-scale into the
market. It is the period of
attempting to gain market
acceptance for the product.
1.
INTRODUCTION
If the product earns market
acceptance, it should at
some point enter a period of
comparatively rapid growth.
2. GROWTH
Product Life Cycle Stages
As the product approaches the
end of its growth period, sales
begins to decline.
Profit level off and then fall in the
maturity stage.

3.
MATURITY
The decline stage is characterized
by falling sales and falling profits.
Most competitors have withdrawn
from the market.

4. DECLINE