New Product Planning

New Product Planning

This is the strategic stage The firm assesses

It current product portfolio Opportunities and threats

The firm then determines the type of product which would best fit in with the corporate strategy

New Product Development Process

Idea Generation Idea Screening

Concept development and testing Market strategy development

Business development Test marketing

Commercialization

1..Idea Generation

Purpose – to identify as many new product ideas as possible

Sources

1.               Customers

2.               Company Research and Development

3.               Sales representatives / employees

4.               Competitors

1.                Idea generation is continuous, systematic search for new product opportunities. It involves delineating sources of new ideas and methods for generating them.

Opportunity Identification

Internal sources

_Company employees at all levels

External sources

_ Customers

_ Competitors

_ Distributors

_ Suppliers

_ Outsourcing

Product Screening

1.                In product screening poor, unsuitable or otherwise unattractive ideas are weeded out form further actions

Concept testing

1.                Concept testing present the consumer with a proposed product and measure attitudes and intention at this early stage of development

Business & financial Analysis

Business and financial analysis for the remainning product concepts is much more detailed than product screening

Assesses the potential profitability of the product concept Estimate sales

Estimate costs

2.Product Development

The product concept described on paper is turned into a physical product called a prototype.

Prototype is tested with sample groups from the target market.

Product development converts a product idea into a physical form and identifies a basic marketing strategy

Test Marketing

Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan

Product is tested under realistic purchase conditions.

Purpose – see how targeted consumers respond to product and other marketing mix elements

Product is introduced in one or more test cities

Commercialization

Commercialization involves implementing a total marketing plan and full production Product is placed on the market.

Involves setting up:

manufacturing facilities Channels of distribution Promotion for the product

Will often use a regional roll out