New Product Process
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Transcript of New Product Process
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New Product Process
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What is a Product?
A good, service, or idea consisting of abundle of tangible and intangible
attributes that satisfies consumers whichthey receive in exchange for money orsome other unit of value.
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Product Assortment
Product line
Product item Product mix (assortment)
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Classifying Products
Consumer Goods
Convenience
Shopping Specialty
Unsought
Business Goods
Production
Support
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Slide 10-10
FIGURE 10-1 Classification of consumergoods
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What do these products have in
common? Bic Perfume
Fab 1 Shot
Wheaties Dunk-A-Balls
Dr. Care Toothpaste
Avert Virucidal Tissues Fingoes
La Choys Fresh and Lite Frozen Entrees
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Why Did this Product Fail?
La Choy launched a line of frozen egg rolls.Not measly little appetizer egg rolls, but
big meaty egg rolls that a consumer wouldeat as a main course. These egg rollswere a part of the Fresh and Lite line oflow fat frozen Chinese entrees. La Choy
had a well known brand name; ethniccuisine was soaring in popularity; so werefrozen meals. Why did this product fail?
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Many new products fail each year.
Failures range from 33 percent to 90percent depending on the industry.
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What is the New Product Process?The stages a firm goes through to identify business
opportunities and convert them to a salable good orservice.
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Stage 2: Idea Generation
Purpose to identify as many new productideas as possible
Sources
1. Customers
2. Company Research and Development
3. Sales representatives / employees
4. Competitors
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Stage 3: Screening
Internal Approach The firm establishes a set ofcriteria that the idea must pass in order to beconsidered further.
External Approach Calls for testing the productconcept with appropriate group of targetconsumers.
Relies on written descriptions of the productand/or sketches.
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Stage 4: Business Analysis
Assesses the potential profitability of theproduct concept
Estimate sales
Estimate costs
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Stage 5: Product Development
The product concept described on paper isturned into a physical product called a
prototype. Prototype is tested with sample groups
from the target market.
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Stage 6: Market Testing
Product is tested under realistic purchaseconditions.
Purpose see how targeted consumersrespond to product and other marketingmix elements
Product is introduced in one or more testcities
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Stage 7: Commercialization
Product is placed on the market.
Involves setting up:
manufacturing facilities
Channels of distribution
Promotion for the product
Will often use a regional roll out
