NEW PRODUCT DEVELOPMENT

INTRODUCTION:
For development a new product planning is the first step taken by an enterprise. Product development is the next step to the product planning. Product development is the process of finding out the possibility of producing a new product. It provides all the information about the decision as whether it would be feasible or not to produce product and whether it would be profitable or not to the enterprise. Once a company carefully segmented the market, selects its target customer, identified their needs and what they want, and determined its market positioning. All above is compulsory for developing new product. R&D and marketers play a key role in the new product process.

DEFINITION:

- Different author define product development differently.

According to William j. Stanton, Product development encompasses the technical activities of product research, engineering and design. According to limpson and Darling, Product development involves the adding; dropping, and modification of item specification in the product line for a given period of time, usually one year.
By development or acquisition a company can add new product. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a license from another companies.

CATEGORIES OF NEW PRODUCT:1. New-to-the worlds products: - New products that create an entirely new
market.

2. New products lines: -New products that allow a company to enter an established
market for the first time.

3. Additions to existing product lines: -New products that supplement established

product lines (package size, flavors, and so on).

4. Improvements and revisions of existing products: -New products that

provide improved performance or greater perceived value replace existing products. 5. Repositioning: -Existing products that are targeted to new markets or market segments. 6. Cost reductions: -New products that provide similar performance at lower cost.

Cost reduction Product 7%

Breakthrough product 10% New product

Repositioning 11%

Product modification 26%

Product line addition Extensions 26% New to organization 30% Change within existing Product lines

10% New of the world 20% New product lines 26% Addition to existing Product line line 26% Revisions of improvements 11% Repositioning 7% Cost reduction

It has adopted that several principles to guide its new product development
1. 2. 3. 4. Work with potential customers Let employees choose projects Give employees dabble time Know when to let go

FACTORS WHICH ARE HINDER TO NEW PRODUCT DEVELOPMENT

1. Shortage of important ideas in certain areas There may be

few ways left to improve some basic products (such as steel & detergents )

2. 3. 4. 5. 6.

Fragmented markets Social and governmental constraints New products have to satisfy consumer safety and environmental concern. Cost of development Companies have suffered high R&D, manufacturing, and marketing cost. Capital shortage Faster required development time Company must learn how to compress development time by using new techniques, strategic partners, early concept tests, and advanced marketing planning. Shorter product life cycles When a product is successful, rivals are quick to copy it. SONY used to enjoy a three year lead on its new products. Now MATSUSHITA will copy the product within six months, leaving hardly enough time for Sony to recoup its investment.

7.

Stages in new product development process

1-New product development companys objective:We launch a new product & develop it .And the objective of company suppose we take the example of mobile phone, then what we have the features of product that how the product will sell in the market.

2- Idea GenerationThe second step in the new product development process is search for idea. Some marketing experts believe that the greatest opportunities& highest leverage with new product are found by uncovering the best possible technological innovation.

Interacting wraith others:Ideas for new product can come form many sources such as customers, scientists, competitors, employees, channel members & top management.

3- Idea screening
A company should motivate its employees to submit new ideas to an idea manager whose name & phone number are widely circulated. The purpose of screening is to drop poor ideas as early as possible. The rationale is that product development costs rise substantially with each successive development stage.

4- Concept development & testing

When a new product idea posses the initial screening is it is subjected to concept testing. The product image meanwhile is concerned with determining the way the product should be perceived by the customer & included in this is some notion of how the product will be marketed to that customers.

5- Marketing strategyThe new product manger will develop preliminary strategy plan for introducing the new product into the market. The plan consists of three parts, the first part describes the target markets size & the sales, market share. The second part outline the planned price, distribution strategy & marketing Model. The third part of the marketing strategy plan describes the lay run sales7 profit goals. We can define in the marketing stages product, price, place& promotion.

6-Business AnalysisAfter management develops the product concept marketing & strategy it can evaluate the proposal business attractiveness. Management needs to prepare sales, cost & profit projections to determine whether they satisfy companys objectives.

7- Product development
The idea on paper is converted into product. Product development is the introduction of new markets in the present market laboratory tests, technical evaluations etc, are made strictly on pilot models.

8-Market testing
Test marketing is the stage at which the product & marketing programs are introduced into more realistic market settings. To determine median channels, forecast sales volume

9- CommercializationIn this following factors are to be considered as;I) II) III) IV) V) VI) Acceptance by customers & intermediaries. Production capabilities. Price. Time period. Promotional mix. Cost of commercialization.