New Product Development

and Product Life-

Cycle Strategies

Submitted By :-Sonu Choudhary

Ms.samreen maam

Submitted By:-

New Product Development

A New Product Development is the entire set of activities required to bring a new concept to a state of

market readiness.

New Product Development Process

Idea Generation and ScreeningConcept Development and TestingMarketing StrategyBusiness AnalysisProduct DevelopmentTest MarketingCommercialization

Step 1. Idea Generation

Systematic Search for New Product Ideas

Internal sources

Customers

Competitors

Distributors

Suppliers

Step 2. Idea Screening

Process to spot good ideas and drop poor ones. Criteria• Market Size• Product Price• Development Time & Costs• Manufacturing Costs• Rate of Return

Step 3.Concept Development & Testing

1. Develop Product Ideas into Alternative

Product Concepts.

2. Concept Testing - Test theProduct Concepts with Groups

of Target Customers.

3. Choose the Best One

Step 4. Marketing Strategy Development

Marketing Strategy Statement Formulation

Part One - Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share

Part One - Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share

Part Two - Short-Term:Product’s Planned Price

DistributionMarketing Budget

Part Two - Short-Term:Product’s Planned Price

DistributionMarketing Budget

Part Three - Long-Term:Sales & Profit Goals

Marketing Mix Strategy

Part Three - Long-Term:Sales & Profit Goals

Marketing Mix Strategy

Step 5. Business Analysis Step 6. Product Development

Business Analysis

Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives

Business Analysis

Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives

If No, Eliminate Product Concept

If Yes, Move to Product Development

Step 7. Test Marketing

StandardTest Market

Full marketing campaignin a small number of representative cities.

StandardTest Market

Full marketing campaignin a small number of representative cities.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

Controlled Test Market

A few stores that have agreed to carry newproducts for a fee.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

SimulatedTest Market

Test in a simulated shopping environment

to a sample of consumers.

Product Life Cycle

The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

Time

Profits

Sales

IntroductoryIntroductoryStageStage

GrowthGrowthStageStage

MaturityMaturityStageStage

DeclineDeclineStageStage

0

Product Life Cycle

Dollars

Introductory Stage

High failure rates Limited distribution High marketing and

production costs Negative profits Promotion focuses on

awareness and information

Intensive personal selling to channels

Full-Scale Launch of New Products

Full-Scale Launch of New Products

Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Promotion emphasizes brand ads Goal is wider distribution Prices normally fall Development costs are recovered

Offered in more sizes,

flavors, options

Offered in more sizes,

flavors, options

Growth stage

Declining sales growth Saturated markets Extending product line Stylistic product changes Heavy promotions to dealers and

consumers Marginal competitors drop out Prices and profits fall Niche marketers emerge

Many consumer products are in Maturity Stage

Many consumer products are in Maturity Stage

Maturity Stage

Long-run drop in sales Large inventories of

unsold items Elimination of all nonessential

marketing expenses

Rate of decline depends on change in tastes or

adoption of substitute products

Rate of decline depends on change in tastes or

adoption of substitute products

Decline Stage

How stages of the product life cycle relate to firm’s marketing objectives & marketing mix actions

INTRODUCTION GROWTH MATURITY DECLINE

ProductStrategy

DistributionStrategy

PromotionStrategy

PricingStrategy

Limited modelsFrequent changes

More modelsFrequent changes.

Large number of models.

Eliminate unprofitable

models

LimitedWholesale/

retail distributors

Expanded dealers. Long-term relations

Extensive.Margins drop.Shelf space

Phase out unprofitable

outlets

Awareness. Stimulate

demand.Sampling

Aggressive ads.Stimulatedemand

Advertise. Promote heavily

Phase outpromotion

Higher/recoupdevelopment

costs

Fall as result ofcompetition &

efficient produc-tion.

Prices fall (usually).

Prices stabilize at low level.

Thank You