Professional Documents
Culture Documents
DEVELOPMENT
MANAGING
THE PRODUCT
NEW PRODUCT
DEVELOPMENT
PRODUCT
MANAGING
THE PRODUCT
LIFE CYCLE
Introduction
Major objectives
(i) To ensure that the product-mix is in line with the overall
company and marketing objectives
(ii) To evolve guidelines for reviewing the performance of
the existing products by using such factors as, sales,
profits, competition and customer acceptance
B2B Product
The augmented product includes intangible
benefits such as technical assistance,
availability of spare parts, maintenance and
repair services, warranties, training, timely
delivery, and attractive commercial
payment terms.
Augmented
properties
Enhanced
properties
Basic
Properties
Basic properties are included in the generic
product, with fundamental benefits sought
by the customer
Cummins India Ltd. Has a successful product strategy because it has understood
the customers perception and offered both tangible and intangible benefits to
the target industrial customers far superior than the customers.
Customer
needs
Technology
Government
policy/laws
Product lifecycle
(i)
(ii) Products that are new to the Company but not new to the market
(iii) Revision or improvements to the existing products in the
existing markets
Product not
significantly
different
Product do not
deliver expected
performance
Weak
development
process
Product
superiority &
uniqueness
Market
knowledge
Technical &
production
capabilities
IDEAS GENERATION
IDEA SCREENING
CONCEPT TESTING
BUSINESS ANALYSIS
PRODUCT DEVELOPMENT
MARKET TESTING
COMMERCIALISATION
IDEAS GENERATION
Source
--- Sales persons
--- Customers
--- Distributors
--- Suppliers
--- Design engineers
--- Managers
Brainstorming
Attribute listing
IDEA SCREENING
To select those ideas which
are likely to succeed
Stage I
Checking the
product ideas
to ascertain if
:
(A) The relative importance of these factors
by giving weight ages out of a total
weight of 1
Stage II
Rating of
new ideas
on
CONCEPT TESTING
The new product is tested in prospective
customers organization
The CONCEPTS CAN BE PRESENTED BY
DEVELOPING MODELS THROUGH
TECHNIQUES CALLED
STERIOLITHOGRAPHY
VIRTUAL REALITY
BUSINESS ANALYSIS
The purpose of business analysis is to develop
an estimated projection of sales, cost and
profitability in the proposed new product over
the next 5-7 years
The analysis covers aspects like ;
(a) Required investment in plant, equipment, working capital and
market development
(b) Market potential sales forecast customer and competitive
analysis
(c) Costs of product development, manufacturing and marketing
the product
(d) Likely price levels, profitability and return on investment
PRODUCT DEVELOPMENT
Process in which engineers and technicians
create the desired product
The R & D department develops one or more
prototypes of the product concept
The development of the prototype will confirm
or negate its ability to produce the product
within the cost estimate and performance
parameters previously established
In today's competitive environment the success
of the new product depends on how fast it is
developed
All this is done to ensure that the new products
are developed and launched in the market
before competitors
MARKET TESTING
Different methods of product testing are
Trade shows
Dealers show
room
Test marketing
COMMERCIALISATION
A product is commercialised or launched when
it is introduced to a target market
It involves various activities developed in an
action plan as part of the marketing plan
Activities include :
Training of sales force
Product catalogues
Price lists
Introductory advertisements
Adequate stocks at warehouses/distributors shops
MARKET
SURVEY
DEVELOP
FEATURES
CUSTOMER
ATTRIBUTES
FEEDBACK
DESIGN
ENGINEERING
ATTRIBUTES
FINAL
PRODUCT
TEST
MARKETING
LAUNCHING
PRODUCT LAUNCH
SALES
EXCELLENT
MARKET
TEST
SALES
FAIR
LAUNCH
PRODUCT
ORGANISE NEW
MARKET
TEST
SALES FAIR
SALES POOR
MODIFY
PRODUCT
SALES
POOR
SALES
EXCELLENT
MODIFY
PRODUCT
DROP THE
PRODUCT
MARKET
TEST
MARKET
TEST
INTRODUCTION
GROWTH MATURITY/
DECLINE
SATURATION
SALE &
PROFIT
SALE
PROFIT
TIME
INTRODUCTORY STAGE
Situation
There may not be ready market for the product
Sales are low
Products undergoes teething troubles
Profit seems a remote possibility
Strategy
--- Crucial decision is on pricing strategy to be adopted
(i) Market skimming or
(ii) market penetration
--- spend a lot on physical distribution and promotion to create an
awareness and acceptance of the product
GROWTH STAGE
Situation
sales shoot up. we are happy with profit generated by the product
competitors will enter with new product features
Cannot dictate price to the customer/channel
Strategy
--- Alteration of marketing strategies
--- Competition oriented pricing
--- Product improvement necessary.
--- Maintain same level promotional expenditure
--- Marketing and distribution efficiency
MATURITY STAGE
Situation
SLOW DOWN IN THE GROWTH RATE OF SALES
DEALERS MAY DICTATE TERMS
PRICE COMPETITION BECOMES INTENSE
Strategy
DECLINE CAN BE ARRESTED BY BY IMPROVEMENTS IN PRODUCT AND
PROMOTION
DECLINE STAGE
Situation
DECLINE MAY BE SLOW OR RAPID
MAY BE DUE TO BETTER SUBSTITUTES,BETTER COMPETITION,
TECHNOLOGICAL ADVANCES
Strategy
CONSIDER ELIMINATION OF SUCH MARGINAL OR UNPROFITABLE PRODUCTS
1)
2)
3)
4)
5)
6)