NEW PRODUCT DEVELOPMENT 1 NEW PRODUCT DEVELOPMENT 1. Idea Generation - the systematic search for new-product ideas.

Sources of new-product ideas # internal sources # customers # competitors # distributors and suppliers

2. Idea screening - screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible.

3. Concept development and testing product idea - an idea for possible product that the company can see itself offering to the market

Product concept - a detailed version of the new product idea stated in meaningful consumer terms.

Product image - the way consumers perceive an actual or potential product.

Example: product idea: to produce a fuel-cell-powered electric car product concept: concept 1: A medium-cost sporty compact appealing to young people.

Concept 2: An inexpensive subcompact green car appealing to environmentally conscious people who wants practical transportation and low pollution

Concept testing - testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

4. Marketing strategy development -Designing an initial marketing strategy for a new product based on the product concept. (it includes target market, positioning,sales, market share,profit goals,price, distribution,marketing budget,long run sales,profit goals, marketing mix strategy)

5. Business analysis - a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.

6. Product development - - developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product.

7. Test marketing - the product and marketing program are tested in more realistic market settings.

8. Commercialization - introducing a new product into the market

Speeding up new-product Speeding up new-product development Sequential product development - one company department works to complete its stage of the process before passing the new product along to the next department and stage.

Simultaneous(team based) product development - Various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.

PRODUCT LIFE CYCLE - the course of a product’s sales and profits over its lifetime. 1. Product development - sales are zero and the company’s investment costs mount.

2. Introduction - profits are nonexistent in this stage because of the heavy expenses of product introduction. 3. Growth - a period of rapid market acceptance and increasing profits.

4. Maturity - slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competitors.

5. Decline -sales fall off and profits drop.