New product development (NPD)

NPD is a process which designed to develop, test and consider the viability of products which are new to the market in order to ensure the Growth or survival of the organisation.

What is a new product ?

A product that opens an entirely new market A product that adapts or replaces an existing product A product that significantly broadens the market for an existing product An old product packaged in a different way An old product marketed in a different way

Why develop NPD

To add to product portfolio To replace declining product To take advantage of new technology To defeat rivals To maintain/increase market share To keep up with rivals To maintain competitive advantage To full gap in the market

New product can be used

Increase/defend market share by offering more choice or updating older products Appeal to new segments Diversify into new markets Improve relationship with distributors Maintain the firms reputation a leading edge company Make better use of the organization's resources

Types of new product

New product innovative products New product lines to allow the firm to enter an existing market Addition to product line to supplement the firms existing product line Improvements and revisions of existing product Repositioned products existing products targets at new market

Examples of new products

New to the world high definition TV, ipod, flat screen TV New products lines Mars ice creams Addition to the products line weetabix launched fruitibix Product improvement & replacement new car model

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

Stages in NPD

Idea Generation Idea Screening Concept development and testing Market strategy development Business development Test marketing Commercialization

Idea Generation

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

Product Screening

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

Concept testing

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

Product Development

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

Commercialization

Commercialization involves implementing a total marketing plan and full production