Product Design and Development
Lecture#2
New Product
Benedikta Siboro, M.Sc
Lecturer
Del Institute of Technology
What is product?
A product is something sold by an enterprise to its customers.
A process that provides benefits to a market.
The item offered for sale : physical or in virtual or cyber form.
A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers
and is received in exchange for money or some other unit of value.
Total Product
Product Life Cycle
Types New Product
New Product a. Innovative : new to the world and new to the company ,
provide completely different alternatives to existing product
Eg : Vaccine for Corona Virus, Product based on Nano
Innovative Replacement Imitative Technology
b. Replacement : although these products are new to customers
or to company, but essentially improvements or redesign of
existing product
Eg : digital phone replaced the analogues
c. Imitative : product new to company but not to market
Reason Generate New Product
To suit the changes customers needs
To adopt new technologies advances and avoid obsolesce
To match the competition
Product Life Cycle concept
To bring down the cost
Stages of New Product Development
Idea Generation
Idea Screening
Concept Development and Testing
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialisation (launch)
Idea Generation
Idea generation is continuous, systematic search for new product opportunities.
Idea form using creativity generating techniques and generated through firms Internal and External Sources
Internal External
Customer &
R&D Employee online Competitor Supplier Distributor
opinion
Idea Generation (2)
Methods of generating new idea :
a. Search : publication, research, internet, exhibition convention
b. Marketing research
c. Technical research
d. Internal research at firms and external laboratory
Idea Screening
Filtering the ideas to pick out good ones & drooping the poor ones.
Involves a preliminary elimination process in which a large number of product ideas are screened in terms of the
organization’s objectives, policies, technical feasibility, and financial viability
Category idea conclusion : promising, marginal, rejected
Facing problem on screening idea : Drop Error & Go Error.
Concept Development and Testing
The Product Idea is converted into product concept
Product idea : Possible product that company may offer to the market
Product concept : A detail version of idea stated in meaningful consumer terms
Product concept should be consider :
a. Who will use
b. What primary benefit
c. When will it be consumed
Concept Testing : presenting the product concept to target consumers, physically or symbolically and getting the reactions
Marketing and Strategy Development
Consider for below items :
a. Understanding customer
b. Analyse the market
c. Analyse the competition
d. Research distribution channels
e. Define marketing mix
f. Analyse the financials
g. Review and revise
Business Analysis
Will decide whether the project is beneficial or not
Estimates based on: selling price, sales volume (size of market), profitability and break even point
Product Development
Produce a
Conduct focus Make
physical Test the product
group customer adjustment
prototype
Market Testing
Product is ready to be branded with a name, logo and packaging and go into a preliminary market testing
Involves placing a product for sale in one or more selected areas and observing its actual performance under the
proposed marketing plan
Methods:
a. Sales wave research
b. Simulated test marketing
c. Controlled testing marketing
d. Test markets.
Commercialization
Production of new product on a commercial basis is rapidly built up and implementing a total marketing plan
For formally launching a new product, the following decisions to be taken :
a. Timing (when to launch)
b. Geographic strategy (where to launch)
c. Target-market prospects ( to whom)
d. Introductory market strategy ( how to launch)
