New Product Development Flashcards
New Product Development
Can be expensive, risky and time-consuming (when built in-house).
New products essential to corporate success.
Risky venture.
Failure must be tolerated.
Could be different packaging or completely different product.
New Product Development: Why?
Changing customer taste, technological advances, competitive pressure.
Managing Brands and Products
Product mix or portfolio decisions.
Individual product decisions.
Product attribute decisions.
Branding decisions.
The Product Lifecycle
Some products terminated and replaced with others.
Marketing concept and strategy revised as products go through stages.
Some have a quick lifecycle, some last forever.
New Product Development: Risk Level
Product replacements.
Addition to existing lines.
New lines.
New to the world products.
Ranked lowest to highest risk.
Product Replacements: Why?
Keep up with changing tastes.
Prevent obsolescence of existing products.
Protect and maintain market share.
Cannibalise own products before other firms do so.
Addition to Existing Lines: Why?
Greater depth for the company.
Increased customer choice set.
Address heterogenous demands of the market.
Widen market coverage.
New Product Lines: Why?
Greater product breadth.
Enter new markets.
Better serve specific segments of a wider market.
Capitalise on existing products - complementary, e.g. Apple iPhone and iMac.
New to the World Products: Why?
Create entirely new markets.
Transform and reconfigure existing markets.
Patent IP rights through technological breakthroughs.
Idea Generation: Internal
Through:
R & D Department.
Focus groups.
Employees.
Idea Generation: External
Through:
Examining competitors.
Supplier suggestions.
Customer feedback, e.g. Fractal Design website.
Consumer/customer panels.
Idea Screening: Evaluation
Commercial value of the idea.
Attractiveness of the market.
Fit been product and company objectives.
Capability to produce and market the product.
Idea Screening: Questions to Ask
Unique benefit compared to existing product portfolio?
Unique benefit compared to competitor products?
Superior benefit to customers?
Size and growth potential of the segment.
Will it be profitable?
Idea Screening: Benefits
Eliminate ideas that aren’t commercially viable.
Avoid the risk of prouct failure.
Seperate feasible from not yet feasible.
Eliminate ideas not in line with the company strategy.
Concept Testing
Tested to avoid breaching existing patents and IP. Potential customers asked and judged in artificial market.
