New Product Planning and Development
Category : Banking
New Product and Development
When a company finds itself in a situation where it may be advised to develop a new product, when the sales of the existing product is declining over the past few years. The fixed costs involved in developing a new product for a market are very high and failure in operating this service successfully can result in losses for the company. New product development is not an easy job. It is an extremely difficult and time consuming process. The role of marketing research in new product development is not as simple and straightforward as it may happen.
Scope of Product Planning and Development
· Label of the Product
· Service of the Product
· Repairing Services
· Change in the Product mix
· Nature of the Product
· Cost Planning
· Cost Management
· Price of the Product
· Color of the Product
· Name of the Product
· Quality and Quantity
The following steps would help a company to successfully develop a new product;
(i) Idea Generation: The Objective is to maximize the number of ideas firm, industrial consultancy, research laboratories and the middleman are considered as an authentic source of ideas since they are generally unbiased. Methods of idea generation are as follows?
(a) Problem Analysis: Customers are approached to identify the problems. They are using a product so that necessary modification can be made.
(b) Attribute Listing: All the Managers attribute of an existing product how these attributes can be improved so that product improves.
(c) Forced Relationship; It involves considering and comparing the products in relation to each other so that a product can be improved by absorbing or incorporating the features of the product.
(d) Brainstorming: It is the oldest and widely used method to encourage creative thinking. It involves the use of a group when people interact in a free environment and it gives birth to a large number of ideas.
New Product Development Process:
(ii) Idea Screening: All the ideas that are generated are carefully analyses and only the most suitable ideas are screened out eliminating the rest. During the screening process the company should be particularly careful about "Drop Error" and "Go Error". A drop error occurs when good idea is rejected and a Go error occurs when a poor idea is accepted which eventually leads to product failure.
(iii) Testing the Concept: An idea that has been approved by the management may or may not be liked by the customers. Therefore, the idea or the concept should be tested to know the reactions of the target customers who would finally use the goods. Often, companies adopt market research techniques and conduct surveys to know the opinion of the target customers about the new goods.
(iv) Business Analysis: Ideas which survive beyond the screening stages are once again evaluated to determine their contribution to the company and the probable costs that are involved. Finally the ideas are ranked in terms of their profit potential after analyzing their rate of Return.
(v) Product Development: The selected idea is translated into a commercially viable and technically feasible product. During product development certain factors like safety, cost of maintenance, reliability, expected customers, etc are taken into consideration.
(vi) Product launch: It is the last stage when the Product is finally launched in the market and its life cycle begins. Commercialization increases a company financial commitment by several order of magnitude. This I because a huge amount of promotional investment becomes necessary for creating awareness among the customers.
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