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PRODUCT

DEVELOPMENT
AND INNOVATION
PRODUCT DEVELOPMENT
“Product”
-a product is good, service or idea consisting of a bundle of tangible and
intangible attributes that satisfies consumers and is received in exchange for
money or some other unit of value.
Product Planning/Development
-refers to the systematic decision making related to all aspects of the
development and management of a firm products
Product Planning/Development

In order for a new product idea to succeed, it MUST be or have:


-Desirable attributes for their target market
-Be unique
-If the new product isn’t, it is doomed to fail
New Product Development
New product development is a process of bringing a new product to the
market. You may want to develop new products due to:
• changing customer needs or preferences
• increased competition
• advances in technology
• new opportunities
Stages of Product Development
1. Idea Generation
2. Idea Screening
3. Concept Development
4. Market Strategy
5. Feasibility Analysis
6. Product Design
7. Test Marketing
8. Market Entry
Stages of Product Development

1. Idea Generation
-An invention or innovation as a result of a gap in the
current market
-An idea to produce a product or service not currently
available
Stages of Product Development

2. Idea Screening
-Not all ideas are good ones
- Marketers need to test consumer reaction to their idea before
they continue
Stages of Product Development

3. Concept Development
-This stage will allow you to see if the product works and to
allow your target market to use it and provide feedback for
improvements.
Stages of Product Development
4. Market Strategy
Determine your target market and how to use the 4 P’s to optimally sell
them your product
*Product
*Place
*Price
*Promotion
Stages of Product Development

5. Feasibility Analysis/ Study


Often done at the same time as a product design and market
strategy stages

“Can we make and sell this product and make money


doing it?”
Stages of Product Development

6. Product Design
-What the product will look like
-The design will depend on what it does and what the target
market want
Stages of Product Development

7. Test Marketing
-Test acceptance of the product
-Usually occurs by offering the product to a random sample of
your target market
Stages of Product Development

8. Market Entry
- The “Product Life Cycle” begins and it’s life will be determined
by the consumer market, competition and further product advances.
INNOVATION
-is the life blood of all organization
-enables companies to adapt, survive and create
- appears its origin in Latin “Innovare”
Innovation Characteristics
- Process from idea generation to commercialization
- The adoption of change
- Radical change in traditional ways vs. incremental change
- New device or something new to society
SPHERES OF INNOVATION
1. Incremental Innovation
-is the continuous improvement of current approaches
2. Radical Innovation
-results in a clearly differentiated product or service
3. System Innovation
-moves away from individual product or services
TYPES OF INNOVATION
A. by character
• -Tachnological innovations
Products
Processes
• Technology
• administration
Social innovations: leasing, insurance
four types of innovations are distinguished and measured in EU (defined in Oslo manual)
- product innovations,
- - process innovations,
- - marketing innovations and
- - organisational innovations.
Types of Innovations
b) by motivation
means generated - technology push – innovation based on invention, arise
from technical capability of the company, the company role is to find the
market or create the need
needs generated demand pull – innovation based on solving existing
customer problem, response to documented need or demand.
5 Innovation Strategies
1. Progressive Technical Solution
-Products are build on the basis of the latest scientific and
technical knowledge
2. Balanced Strategy
-Balance between latest scientific and technical trends application
and marketing activities focused on finding unmet customer needs
and wants and new product launch
5 Innovation Strategies

3. Verified Technical Approaches


- focused on easy and verified technical solutions
4. Conservative Low Budget Strategy
-Copy the leader, new products are in line with company skills, they are small
improvements of old ones, for well-known market
5. Diversified High Budgets
-New products development is isolated, without coordination, costly, without
internal synergies