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Presentation
New Product
Development
By Nariman & Beenish
New product
development
New product development (NPD) is the term
used to describe the complete process of
bringing a new product or service to market.
It is a process which is designed to develop, test
and consider the viability of products that are
new to the market in order to ensure the growth
or survival of the organization.
Product:
A product is anything that can be offered to a
market that might satisfy a want or need.
What is a new
A
product?
product that open ups an entirely new market
A product that adapts or replaces an existing product
A product that significantly broadens the market for
an existing market
An old product introduced in a new market
An old product packaged in a different way
An old product marketed in a different way
Types of New
Products
There are different types of new products:
Ipods
credit cards
Online Banking
Examples(cont)
new product lines:
Mars ice-creams
additions to
product lines:
weetabix launched
weetabix gold and
oatibix
Examples(cont)
product
improvments
&
replacements:
new car model,
PCs and laptops
etc
Examples(cont)
typewritter replaced by computer
and laptops
Examples(cont)
Replacement
s: floppy
replaced by CD
and DVD
Examples(cont)
Improve an
Existing
Product
Why develop new
products?
To add to product portfolio
To create stars and cash cows for the future
To replace declining products
To take advantage of new technology
To maintain/increase market share
To defeat rivals
To keep up with rivals
To maintain competitive advantage
To fill a gap in the market
Why develop new
products?cont…
To bring in new customers
To appeal to new segments
Diversify into new markets
To maintain firm’s reputation as the leading
edge company
Even out peaks and troughs in demand
Make better use of organization’s resources
Significant
Innovations
1840s, Telegraph.
1870s, Telephone.
1894 First spark transmitter (radio) by Guglielmo Marconi.
1886, Coca Cola was invented by John Pemberton
1886, First Yellow Pages.
1989, Construction of the Eiffel Tower.
1891, Vaccination against diphtheria and tetanus.
1899, First paperclip by Johan Vaaler.
1908, First mass production of cars
1901, First espresso machine by Luigi Bezzera.
1906, Vaccination against tuberculosis.
1930, First commercial television.
1950, First Bic Cristal Ballpoint Pen
Significant
Innovations cont…
1950´s, McDonald's revolution: Quality, Service,
Cleanliness and Value
1951, First Credit Card
1953, The first high-speed printer was developed
by Remington-Rand.
1971, Introduction of soft contact lenses.
2000, Google (searching engine with more
effective algorithms than Yahoo)
2002, Wireless connection to internet (WiFi).
2004, RFID (Radio Frequency Identification). It
gives real time visibility to entire supply chain.
New Product
Strategy
A new product strategy is a statement
identifying the role a new product is
expected to play in achieving
corporate and marketing goals.
A firm assesses
Its current product portfolio
Opportunities and threats
New Product
Strategy cont..
The firm then determines the type of
product which would best fit in with the
corporate strategy.
An effective new product development
strategy must go beyond efforts to
achieve core market growth. The
strategy must consider all possibilities
and generate growth and revenue along
several potential avenues of innovation.
Avenues of innovation
When it comes to formulating a new product
development strategy, there are four
potential avenues of innovation:
core market growth:which consists of
making improvements to products and
services that already exist in order to help
customers get a job done better
adjacent or related market
growth:which is improving existing products
and services to help customers get related
or ancillary jobs done (for example, by
adding a tongue cleaner to a tooth brush)
Avenues of innovation
cont…
(3) new market creation: which involves creating
a new product or service for customers who are
trying to get a job done but cannot because no
solutions or onlyad hoc solutions exist.
(4) disruption:
which is defined as the creation of a technology that
enables a new set of customers to perform a job
that only specialists could previously perform. Crest
Whitestripes, for example, made it possible for
people to whiten their teeth on their own eliminating
the specialist—the dentist
Allocation of
resources:
A well balanced new product
development strategy often
allocates resources as follows:
65% core market growth
15% adjacent or related market
growth
15% new market creation
5% disruption
Strategy
concluded….
To implement such a new product
development strategy means that a company
must hire and train people to be responsible
for areas of growth outside the core market.