NEW PRODUCT

DEVFLOPMENT

-MRINAL
GAUTAM
3rd sem

What are new products?

Any new entity to change to the
product visible to the customer or
consumer, is a new product.

What are new products?

New to the world products
New product lines
Addition to the existing product
lines
Improvement of existing
products
Repositioning
Cost reduction

 Product development is a
process of designing,
building, operating, and
maintaining a good or
service

JUST HAVE ALOOK.

At 3M products less than 5 years old
account for 25% of the sales.
In 1981, 700 US companies indicated
that new products would account for
one third of all profits in the 1980s,
an increase from one-fifth in 1970s.

NEW PRODUCT ALSO FAIL

`
Texas instruments lost $600 million before

withdrawing from home computer business]

RCA lost $500 million on its videodisc players
Fedex lost $340 million on its Zap Mail
For lost $250 on its Edsel
Dupont lost an estimated $100 million on a
synthetic leather called corfam, and
British French concorde will never recover its
investment.
And what about the case of smokeless cigarette

SO ODDS ARE AGAINST

YOU.
35-90 all products FAIL and they do
not include all the products killed
along way
1% improvement since 90 so new
ideas may not be much better
For every 11 new ideas, 3 make it to
dev phase, and only 1 is a
commercial success.
Bottom line is most new product
team fail

Top Reasons for Failure

New product fails because
Detailed Market study
74%
Test Marketing
58%
Product Launch
54%
Financial / Biz Analysis
52%

THE NEW PRODUCT DEVELOPMENT PROCESS

Idea generation
Idea screening
Concept Development and
testing
Marketing Strategy
development
Business Analysis
Product development
Market Testing
Commercialization

IDEA GENERATION
New idea are critical to NDP
An idea can form anywhere
Ideas usually 3-4% of idea s survive this stage
Only about 1 in 3000 idea become commercially successful
A 5- Point checklist at siemens to evaluate ideascustomer , Market , Competencies , Time- scale and
Strength & Weaknesses
77% of innovations come from user
For engineering plastics, 90% of innovations came from
manufactures
In wire termination equipment 6% innovation come from
suppliers who could sell the equipment to manufacturers
R&D Sourced ideas succeeded 39% of the time , marketing
sourced idea succeeded 51% of the time ,
In contrast , suppliers sourced ideas succeeded only 31 %
of the time
Customer sourced ideas succeeded 39% of the time

Idea generation
Techniques
Attribute listing
Forced relationship Listing of objective
and then incorporate them in the
product
Morphological Analysis Seeing most
important dimensions of the problem
and their relationship with others
Problem Analysis Stars with consumers
Brain Storming
Synaptic- Get all perspectives and look
into different viewpoints

Idea Screening

Ive got
a great
idea.

Its not
the
way
We do
things

It wont
work
there.

We
have
tried it
before.

This
isnt
the
right
time.

We
It will
have
Lets discuss
cost
done
it in our next
too
alright
meeting
much
Without
it.
Let ideas blossom; or they will wither!

It cant
be
done.

IDEA SCREENING

Go Error Vs. Drop Error

CONCEPT DEVELOPMENT AND

TESTING
A product Idea is a possible product
the company might offer to the
market.
A product concept is a elaborate
version of the idea expressed in
meaningful consumer terms.
Attractive ideas need to be refined
into testable product concepts.

STRATEGY
DEVELOPMENT
The plan consists of 3 parts:
-Target market size, structure and
behaviour.
-Planned product positioning.
-Sales, market share and profit
goals.
Powerful strategies are essential for winning
battles in the marketplace.

BUSINESS ANALYSIS
Strategies must also be evaluated for
its business attractiveness.

Business attractiveness is critical for

strategies to succeed.

PRODUCT DEVELOPMENT
See if the product can be translated
into a commercially feasible
proposition.

A Product must be commercially

feasible proposition

MARKET TESTING
Find out if the customers delighted to
have your products?

Customers must be happy buying

their products.

COMMERCIALIZATION
The litmus test for all marketers!

Ask yourselfAre you successful in the

marketplace?.

RESPNSE TO INNOVATION

ISSUES IN NPD
Speed and Flexibility.
Incremental vs. Radical innovation.
Exceptional performance in NPD.

SPEED AND FLEXIBILITY

6
Type A phase

FACTORS IN THE NPD

PROCESS

Built-in instability
Self Organizing Project Teams
Overlapping development phases
Multi-learning
Subtle control
Organizational transfer of learning