new product development

Examples of new product development in the following topics:

• Ansoff Opportunity Matrix

  • Product development (existing markets, new products): McDonald's operates in the fast-food industry, but it frequently markets new types of burgers.
  • Market development - This growth strategy uses existing products to capture new markets.
  • Product development - This growth strategy uses new products in the existing market.
  • While market penetration may come with the lowest risk, at some point the company will reach market saturation with the current product and will have to switch to a new strategy, such as market development or product development.
  • Companies typically see new product development as the first stage in the overall strategic process of product life cycle management used to maintain or grow market share.

• Strategy

  • A well thought out new product development strategy (NPDS) helps a company avoid wasting time and resources by helping to organize planning and research, understanding customer expectations, and accurately resourcing the project.
  • Flexible product development is the ability to make changes in the product being developed or in how it is developed, even relatively late in development, without being too disruptive.
  • Flexibility is important because the development of a new product naturally involves change from what came before it.
  • Change can be expected in what the customer wants and how the customer might use the product, in how competitors might respond, and in the new technologies being applied in the product or in its manufacturing process.
  • The more innovative a new product is, the more likely it is that the development team will have to make changes during development.

• Development

  • Development involves setting product specifications as well as testing the product with intended customer groups to gauge their reaction.
  • The first is the applied laboratory research required to develop exact product specifications.
  • While the laboratory technicians are working on the prototype, the marketing department is responsible for testing the new product with its intended consumers and developing the other elements of the marketing mix.
  • The second aspect of market development involves consumer testing of the product idea.
  • Describe the steps involved in the technical and marketing development stages of new product development

• The Product Life Cycle

  • Product development and product life cycles go hand-in-hand.
  • It is important that businesses continually develop new products to replace those that are declining.
  • For example, consider the product development and life cycle of a video game.
  • Often the games take 2 to 4 years to develop.
  • A company must succeed at both developing new products and managing them in the face of changing tastes, technologies and competition.

• Screening

  • During screening, the company evaluates whether to devote further resources to the development of a product at various stage gates.
  • It is important for businesses to continually devise new products, as products do not last forever.
  • The screening step is a critical part of the new product development process.
  • There are two common techniques for screening new product ideas.
  • Both involve the comparison of a potential product idea against the criteria for acceptable new products.

• Product Orientation

  • This approach stresses the research and development of products and the continuous evolution during their life cycles , in order to maintain the attention of potential customers.
  • Under the product orientation, management focuses on developing high quality products which can be sold at the right price, but with insufficient attention to what it is that customers really need and want.
  • Adopting the product orientation can be advantageous to a company, due to the fact that the cost of determining consumer preferences and the development of new products and services are minimized or eliminated because consumers are in some way captive.
  • Product orientation assumes a developing or closed economy where few, if any, choices are available.
  • Companies adopting a product orientation of marketing focus on product quality and therefore emphasize research and development.

• The Need for New Products

  • In dynamic markets companies must constantly introduce new products and services to keep up with changing consumer wants and needs.
  • Continuous decisions must be made about whether new products should be added (and whether old products should be removed).
  • Organizations invest a lot of money to create new products that perform effectively.
  • The ultimate success of new products depends on consumers accepting them.
  • 'Innovation' is used here to describe an idea or product that is new to the company.

• Organizational Requirements for Product Development and Management

  • Product development combined with product marketing make up the product management function within an organization.
  • Product development – the process of bringing new products to the marketplace – combined with product marketing, make up the product management function that oversees the launch of a company's new products.
  • A product manager investigates, selects, and develops one or more tangible products for an organization.
  • Often, product management professionals serve as the middlemen between product development and engineering and marketing and sales teams.
  • They often translate business objectives set for a product by marketing or sales into engineering requirements for product development.

• When to Modify Products

  • Large companies, in particular food producers, will slightly alter a product to attract new attention to it.
  • Stakeholders typically contribute input during product development, demanding something different from the product designer and design process.
  • Product development can take as many as five to six attempts before achieving success in the marketplace.
  • Innovation provides much of the competitive impetus for the development of new products, with new technology often requiring a new design interpretation.
  • While some products are completely new innovations, others are simply minor modifications to existing products.

• Stages in the Product Life Cycle

  • After all research and development has be done it is time to launch the product and begin its lifecycle.
  • Nonetheless, sales may remain low because it takes time for the market to accept the new product.
  • In the growth stage of the product life cycle, the market has accepted the product and sales begin to increase.
  • The company that introduced the new product may begin to find it difficult to compete in the market.
  • Firms progress through stages of development, indicated by their changing profits over time.