NEW PRODUCT DEVELOPMENT

 Innovative Product : a real break-through product

or innovative product is entirely original and new
to the market.
 Discontinuous Innovations – It is a fairly revolutionary
innovation which introduces entirely new or very
substantially different from the existing products.
 Dynamically Continuous Innovation – do not
substantially alter the ways of satisfying a need, but
they introduce products with significantly improved
features or enhanced applications and benefits to
satisfy the needs.
 Continuous Innovations – refers to incremental
improvements to existing products, such as
improvements in quality, addition of new features etc.
Other players can cope up with the change by imitating
the innovation and hence the need for continuous
innovation to survive the competition.
 Adaptations : Most successful products are the
adaptations of existing products that have already
blazed themselves a consumer trail.
 Requires enterprise and innovativeness.
 Advantages are good chances of success, predictive sales pattern
and low R & D expenditure.
 Disadvantages are chances of quick competition and small piece
of large pie.
 Line Extensions : It is leveraging an existing brand’s
strength and popularity to introduce new product.
 Advantage is a quick and efficient strategy for entering the market.
 It should however ensured that the line extensions vitalize the
brand and not milk the brand.
 Line extensions by introducing inferior products can have adverse
effects on the core brand.
• New Use : A new product can be a new use or a
new market for an existing product. It is indeed an
opportunity which is very extensively researched.
• Copy : Another category of new product is that it is
new to the company but not to the market.
 There are many products without patent or other legal
hurdles which can be copied and marketed.
 For labour intensive products, manufacturers in
developing countries are losing the their competitiveness.
 Great advantage is that there exists a clear market.
 Next Generation Products : Companies must keep
moving and changing, and improving, lest your
market share be gobbled up by someone bigger,
leaner, stronger, or more agile competitor.
1. Idea Generation – first step in new product
development is to generate as many new
ideas as possible.
2. Evaluation & Selection – Second step is to
evaluate these ideas and select which is/are
worth pursuing further.
3. Concept Testing – Conceptualising the idea
into a product and testing its suitability and
customer acceptance.
4. Business Analysis – Commercial feasibility
involves estimating production and marketing
costs, sales potential and profit.
5. Product Development – If the business reveals the
product as profitable proposition, next stage is
development of product in its physical form. This
stage comprises technical aspects of product
development.
6. Market Testing – Conduct market testing of the
product before it is commercialised to measure the
consumer reaction to the product.
7. Commercialisation – Market testing results help in
deciding to go ahead with launching new product.
 When to launch the product
 Where, i.e. in which market (s) to launch the product
 Whom to target the product first
 How to market the product
• New product development is usually a complex
Development
process involving people of different skills,
knowledge and capabilities form different areas.

1. New Product Committee – These normally comprise of top

management from various departments like R&D,
production, marketing, engineering & finance
2. Task Force – This is also constituted by people from different
departments but it only deals with one product
development project.
3. New Product Department – Innovation oriented companies
where new product development is continuous activities,
usually establish this department.
4. Venture Teams – Usually found in large organisations, it is
the most autonomous of all the alternatives.
5. Product/Brand Manager – Firms without any
organisational set up may assign the product
development task to product/brand manager.
1. Better Mousetrap: These are products which have some
uniqueness or superiority but failed to generate enough
demand.
2. Me-too Product meeting a Competition Brick wall
– Products which are mere imitations of competitors,
products may find it difficult to succeed.
3. Competitive One-upmanship – Failures of this type result
from deficiencies in the marketing management.
4. Environmental Ignorance – Product failures may also
emanate from ignorance of environment leading to wrong
decisions.
5. Technological Dog Products – These are products which
fail to rise up to the customer expectations.
6. The Price Crunch – New products also fail because of
mismatch between the price of the product and value of the
product perceived by customer.
• Product revitalisation and elimination are essential
aspects of product management.
 When a product becomes weak, as indicated by its profit
margin, sales volume or market share, it calls for
revitalisation or elimination.
• Following corrective actions may be necessary for
revitalisation before elimination.
1. Cost reductions
2. Product modifications
3. Price changes
4. Promotion modifications
5. Channel changes
 Product elimination sometimes depends on whether a
new product is available for replacement and on the
product’s importance to the company.