New Product Development By Om Prakash Verma

What is Product?

Product:- A good, service, person, place,

events or organizations offered to consumers to satisfy his need or want.

Why should Develop the New Product ?

New Product are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New Product doesn't mean that absolutely new to the world. It may be modification, or offered in the new market, or differentiate from existing products.

New product Development process Stage-1: Idea generation: New Product idea can be
generated either from the internal sources or external sources. The Internal sources include employee of the organization and data collected from the market. The external source includes customer, competitors and supply chain member. For example, Ingersoll rand welcomes new idea from the general public.

Stage 2: Idea Screening:

Organization may have various idea but it should find out of these ideas can be translated into concepts. In an interview of Times of India Mr. Ratan Tata, Chairman TATA group discussed how his idea saw many changes from the basic version. He told that he wanted to develop car with scooter engine, plastic doors etc But when he unveiled the car so many change were there in the product. this shows that initial idea will be changed on the basis of market requirments.

Stage 3: Concept Development:

Concepts used for Tata Nano Car are Concept 1: Low-end, rural car, probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of auto-rickshaw. Concept 2: a car made by engineering plastic and new materials, and using new technology like aerospace adhesives instead of welding. Concept 3: Indigenous, in-house car which meets all the environment standards.

Stage 4: Concept Testing:

At this stage concept was tested with the group of target customers.

Stage 5: Marketing strategy Development:

The marketing strategy development involve three parts. The part focuses on target market, sales, market and profit goals. TATA,s initial business plan consisted sales of 2 Lakh cars per annum. The second part involves product price distribution and marketing budget strategies. TATA.s fixes Rs 1 Lakh as the car price, and finding self employed person who works like agent to distribute the cars. The final part contains marketing mix strategy and profit goals.

Stage 6: Business Analysis:

It is the analysis of sales, costs and profit estimated for a new product to find out whether these align with company mission and objectives.

Stage 7: Product Development:

TATA Nano car development 1. Tried to outsource the product from all over world. 2.Development prototype with 20bhp. 3.Designing the small engine. 4.Thermodynamic simulations and final engine 5.Development of MPFI with help of Bosch. 6.Cost reduction and negotiating with vendors.

Stage 8: Test Marketing:

1.The product is introduced into the realistic market. 2. The 4p,s of marketing are tested. 3.The cost of test marketing varies with the type of product.

Stage 9: Commercialization:

In this stage product is completely placed in the market and aggressive communication is carried out to support it.

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