New products development consists of the certain of new ideas, their evaluation in terms of sales potentials and profitability, production facilities, resource available, designs and production testing and marketing of the products.
Over View Of New Products Development Process
New products development consists
of the certain of new ideas, their evaluation in terms of sales potentials and
profitability, production facilities, resource available, designs and
production testing and marketing of the products.
The main task of the product
planners is to identify specific customer needs and expectations and align
company’s capabilities with the changing market demands. In each of these
stages, the management must decide :(a) whether to move on to the next stage,
(b) to abandon the product, or (c) to seek additional information.
Routes Of New Products Development
Transfer of Technology
New Products have often been
launched, based on new technology, either acquired from the parent company or
with foreign collaboration. Launch of the personal computer or photocopying
machine is a move in this direction.
Sometimes companies have entered
into new lines of business and catered to altogether new markets for the first
ITC’s decision to enter into hotels, paperboards, edible oil, and tissue
paper is a diversification strategy. Likewise, Shaw Wallace diversified to real
estate business. Bata has successfully launched many sportswear, fashion jeans
In general, diversification
strategy tries to reduce the dependence of a company on a limited line of
products. At times, companies find the new business more profitable than their
Additions to Existing Product Lines
New product lines and brand
extensions have sometimes supplemented a company’s existing business.
Videocon’s entry in to washing machines and music systems form color
televisions is a case in point. Similarly, as a business group, Godrej’s strategy
to expand its product range from consumer non-durables like toiletries to
durable such as refrigerators, cupboards and even office equipments is a
classic example of product line extension.
Improvements / Revisions in Existing Products
New products that offer superior
performance and replace existing products are another way of entering the
New products that provide similar
performance at lower cost e.g., Nirma detergent, Tata – 407 LCV.
Sometimes old products have been
relaunched with minor improvements and targeted at completely new markets or
Significance Of New Product Development
Whatever may be nature of
operation of a concern, product planning and development is necessary for its
survival and growth in the long run. Every product has a life cycle and t
become obsolete after the completion of its life cycle. Therefore, it is
essential to develop new products and alter or improve the existing ones to
meet the requirements of customers. One of the most common products – planning
problems relates to the addition of new products to the existing product line.
Addition of new products involves
generation of new product ideas, appraisal of various possibilities, economic
analysis, product development, product testing, test marketing and developing
markets. Another important problem of product planning is modification or
elimination of existing products.
The need for continuous of the
product is great because society’s needs are always changing and improved
products must be introduced to fulfill them. All products have certain
deficiencies, as they are the result of great many compromises. The perfect
product has yet to be made. Research makes possible the reduction of these deficiencies
and brings about improved products.
New Product Development Process
The developers must be conscious
of the probabilistic nature of their endeavors. New product development
endeavors are complex, strongly dependent on diversified human resources and
significantly affected by factors and events beyond the developers control.
Thus, the belief that the implementation of a mechanical methodology can assure
success is an illusion and at times a delusion.
Sources Of New Product Ideas
Customers are sometimes able to
discuss their requirements and offer ideas that will meet those problems.
Systematic comparison or bench
marking with the competition may offer good source of new product ideas.
Suggestions from distributors and
their problems in handling present products often thrown up new ideas.
Brainstorming, focused interviews
and technological forecasting enable one to find out the latent capabilities of
The external world, especially
the use of their technology, offers a good source of ideas for implementation
in the home market.
Research and development:
Create new product ideas through
R&D.From initial generation of ideas to full commercialization and well
into the mature age of a product, the developers should strive to control what
is in their power to control a do to monitor what is beyond their control. No
single facet of new product development can assure success. Few facets are so deter
mental that they are cannot be at least alleviated. Because of the
probabilistic nature of new product development, planning and assessments must
consider long-term repercussions.
Tags : MARKETING MANAGEMENT - New Products Development Strategies
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