New Product

Development
By Om Prakash
Verma
What is Product?
Product:- A good, service,
person, place, events or
organizations offered to
consumers to satisfy his need
or want.
 Why should Develop the
New Product ?

New Product are essential for existing firms to keep

the momentum and for new firms they provide the
differentiation.
New Product doesn't mean that absolutely new to the
world. It may be modification, or offered in the new
market, or differentiate from existing products.
 New product
Development process
Stage-1: Idea generation: New
Product idea can be generated either from
the internal sources or external sources.
The Internal sources include employee of
the organization and data collected from
the market. The external source includes
customer, competitors and supply chain
member. For example, Ingersoll rand
welcomes new idea from the general
public.
Stage 2: Idea Screening:

Organization may have various idea but it

should find out of these ideas can be
translated into concepts. In an interview of
Times of India Mr. Ratan Tata, Chairman TATA
group discussed how his idea saw many
changes from the basic version. He told that
he wanted to develop car with scooter engine,
plastic doors etc… But when he unveiled the
car so many change were there in the
product. this shows that initial idea will be
changed on the basis of market requirments.
 Stage 3: Concept
Development:
Concepts used for Tata Nano Car are
Concept 1: Low-end, rural car, probably without
doors or windows and with plastic curtains
that rolled down, a four-wheel version of auto-
rickshaw.
Concept 2: a car made by engineering plastic
and new materials, and using new technology
like aerospace adhesives instead of welding.
Concept 3: Indigenous, in-house car which
meets all the environment standards.
 Stage 4:Concept
Testing:
At this stage concept was
tested with the group of
target customers.
 Stage 5: Marketing
strategy Development:
The marketing strategy development involve three parts. The
part focuses on target market, sales, market and profit goals.
TATA,s initial business plan consisted sales of 2 Lakh cars per
annum. The second part involves product price distribution
and marketing budget strategies. TATA.s fixes Rs 1 Lakh as
the car price, and finding self employed person who works
like agent to distribute the cars. The final part contains
marketing mix strategy and profit goals.
 Stage 6: Business
Analysis:
It is the analysis of sales,
costs and profit estimated
for a new product to find
out whether these align
with company mission and
objectives.
 Stage 7: Product
Development:
TATA Nano car development
1. Tried to outsource the product from all over world.
2.Development prototype with 20bhp.
3.Designing the small engine.
4.Thermodynamic simulations and final engine
5.Development of MPFI with help of Bosch.
6.Cost reduction and negotiating with vendors.
 Stage 8: Test
Marketing:
1.The product is introduced into
the realistic market.
2. The 4p,s of marketing are
tested.
3.The cost of test marketing
varies with the type of product.
 Stage 9:
Commercialization:
In this stage product is
completely placed in the
market and aggressive
communication is carried out
to support it.
THANK YOU