Product Development Whitepaper

8/14/2019 Product Development Whitepaper

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Product Development

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Contents1 Introduction .......................................................................................................................................... 3

2 What is Product Development .............................................................................................................. 3

3 Stages of Product Development or Product Development Process ..................................................... 3

3.1 Concept: ........................................................................................................................................ 3

3.2 Investigation: ................................................................................................................................ 4

3.3 Development ................................................................................................................................. 4

3.4 Shipping: ....................................................................................................................................... 4

3.5 Support: ........................................................................................................................................ 4

4 Stake Holders of Product ...................................................................................................................... 4

5 Marketing the Strategies ...................................................................................................................... 5

5.1 The Marketing Mix 4 P's Model .................................................................................................... 5

5.2 Product Life Cycle Model .............................................................................................................. 6

5.2.1 Product Development ........................................................................................................... 6

5.2.2 Product Introduction ............................................................................................................. 7

5.2.3 Growth Phase ........................................................................................................................ 7

5.2.4 Maturity Phase ...................................................................................................................... 8

5.2.5 Decline Phase ........................................................................................................................ 8

5.3 Strategies of Product life Cycle ..................................................................................................... 9

5.4 Explain the Crossing the Chasm .................................................................................................. 10

6 Product Life Cycle Requirement Management ................................................................................... 12

7 Reference ............................................................................................................................................ 12


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1 IntroductionAll products and services have certain life cycles. The life cycle refers to the period from the

products first lunch into the market until its final withdrawal and it is up in phases. Increase in the

profit is the major goal of a company that introduces a product into a market its position in the

market compared to competitors, and the products success or failure.

2 What is Product DevelopmentProduct development is the process of designing, creating, and marketing an idea or product. The

product can either be one that is new to the marketplace or one that is new to your particular

company, or, an existing product that has been improved. In many instances a product will be

labeled new and improved when substantial changes have been made.

3 Stages of Product Development or Product Development ProcessProduct development process is import steps. Many people what they do for developing a product

they simply build the product then go to customer for demo which is not fruitful and waste of time

also because if your idea is not good no customer is going to accept it. Until your concept is not

approved by customer, you should not think of development of new product.

We cannot make a product simply by an idea. One of the main things which all of us should take in

to account is Business from the product which we make. How our product will get business, how

market is react to our product, what is the value added to customer who can tempt to buy our

product. These are some question which we need to answer before going to product development

phase.

Product development Stages:

3.1 Concept:Brainstorming and developing a concept is the first step in product development. Once an idea

is generated, it is important to determine whether there is a market for the product, what the

target market is, and whether the idea will be profitable, as well as whether it is feasible from

an engineering and financial standpoint. Once the product is determined to be feasible, the

Concept orIdea

Investigation Development Shipment Support


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idea or concept is tested on a small sample of customers within the target market to see what

their reactions are. This is called prototyping. After prototyping marketing guys visit the

customer, present our product as demo version and get the feedback. The customers who are

all show interest on this product is called Potential Customers.

One thing we have to take care is that until unless demo is not accepted by any of customerproduct should not go into other phases. It means customer not interested in the Concept of

our product itself.

3.2 Investigation:Once the Concept is approved investigation start how to do the product, how to make robust,

what are the tools we need to use. How much resource required, what is estimation Etc.,

3.3 DevelopmentOnce your developed concept [Prototype] is accepted by customer, it is worth in investing the

product. Development involves the Engineering process Designing, architecting, and testing the

product etc., Ex: Software Development Process

3.4 Shipping:Once product is developed, it is ready for shipment.

3.5 Support:In this stage product goes into the maintenance mode.

Another important thing is Time to Market, a very important thing which product maker should

aware. If product which you are going to develop is well ahead of the time that means the

feature, the support which you providing cannot be understood many people which beyondsome point then nobody accept.

Example: Now a days MPEG is very much used. If guy start making a product which runs the

MPEG standard where MPEG itself not known by many people or not established in the market

then that product is going to scrap.

4 Stake Holders of ProductMost functional areas of the company get involved at some time or another, including

Researchers

Marketing

Product Manager

Engineering

Supply management

Manufacturing

Finance, and so on.

As the people in these functions use enterprise systems to help them do their jobs, all of these

systems are involved in Product Development example


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Customer relationship management (CRM),Enterprise resource planning (ERP),

Product life-cycle management (PLM),

supply chain management (SCM),

supplier relationship management (SRM)

5 Marketing the Strategies5.1 The Marketing Mix 4 P's Model

This model is used every phase of the Product Life Cycle product to be alive.

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Product -- Is the product what consumers want? Consider brand name appeal, packaging, quality,

styling, and warrantees.

Price -- Is the pricing strategy working? Consider competitive products, suggested retail price,

wholesale pricing, cash discounts for volume sales, and other factors that impact on per-unit profit.

Place -- Where is the product being bought by consumers? Consider "Brick and mortar" and

Internet retailers.

Promotion -- How well is marketing working? Consider advertising, public relations, sales force,

and sales promotions.


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5.2 Product Life Cycle ModelThis describes the natural process by which a new product is introduced, is gradually accepted, sells

well for a while and is then gradually superseded before, potentially, being phased out.

Product Lifes cycle period usually consists of five major steps or Phases

Product Development

Introduction

Growth

Maturity

Decline

5.2.1 Product DevelopmentThis phase starts when company finds and develops a new product idea. This involves translating

various pieces of information and incorporating them into a new product. During this phase sales

are zero and revenues are zero. It is the time to spending money which has absolutely no returns.


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5.2.2 Product IntroductionIn this phase sales will be low until customers become aware of product its benefits.

Introduction phase of a product includes the product launch with its requirements to getting it

launch in such a way that it has maximum impact on Sales. This period can be described as a

Money Sinkholecompared to the maturity phase of a product.

Promotion and Advertizing: Promotion is aimed to Brand Awareness. Large expenditure on

promotion and advertizing is common, and quick but costly service requirements are introduced. A

company must be prepared to spend a lot of money and get only a small proportion of that back.

Distribution: In this phase distribution arrangements are introduced. Having the product in every

counter is very important and is regarded as an impossible challenge. Some companies avoid this

stress by hiring external contractors or outsourcing the entire distribution arrangement. This has

the benefit of testing and important marketing tool such as outsourcing.

Price: Pricing is very important in this phase. For a new product always customer is ready to paylittle high price. So it minimizes the money sinkhole. Generally high, assuming a skim pricing

strategy for a profit margin as early adopters [Please refer below] buy the product and the firm

recoup development costly quickly.

During this phase company takes lot of actions.

Marketing Strategy

Customer requirements on design, pricing and packaging

5.2.3 Growth PhaseThe growth phase offers the satisfaction of seeing the product take off in the market place. This isthe appropriate timing to focus on increasing the market share. If the product has been introduced

first into the market, then it is in a position to gain market share relatively easily. This period is the

time to develop efficiencies and improve product availability and services. Cost efficiency and time

to market and pricing and discount policy are major factors in gaining customer confidence.

Managing the growth stage is essential. A company must not make any mistake by over

committing. This will result into losing customers not finding the product on the self.

Product: New product features and packaging options, improvement of product quality

Price: Maintained at a high level if demand is high, or reduced to capture the additional customers

Distribution: Distribution becomes more intensive. Trade discounts are minimal if reseller shows a

strong interest in the product.

Promotion: Increase the advertisement to make brand reference.


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5.2.4 Maturity PhaseWhen the market becomes saturated with variations of basic product, and all competitors are

represented in terms of an alternative product, maturity phase arrives. In this phase growth is

market share growth is at the expense of someone elses business, rather than growth of market

itself. This period is the period of the highest returns from the product.

A company that has achieved its market share goal enjoys the most profitable period, while a

company that falls behind its market share goal, must reconsider its marketing positioning into the

marketplace. Promotion and advertising relocates from the scope of getting new customers, to the

scope of product differentiation in terms of quality and reliability

Product: Modifications are made features and features are added in order to differentiate the

product from competing products that may have been introduced

Price: Possible price reductions in response to competition while avoiding a price war

Distribution: New distribution channels and incentives to resellers in order to avoid losing shelfspace.

Promotion: Emphasis on differentiation and building of brand loyalty. Incentives to get competitors

customers to switch.

5.2.5 Decline PhaseThe decision of withdrawing the product from the market is important and complex decision.

Usually company makes the price of the product high so that increases the profit margin and

gradually discourage few loyal remaining customers from buying it.

Sometimes it is difficult for a company to conceptualize the decline signals of a product. Usually aproduct decline is accompanied with a decline of market sales. Its recognition is sometimes hard to

be realized, since marketing departments are usually too optimistic due to big product success

coming from the maturity phase. This is the time to start withdrawing variations of the product

from the market that are weak in their market position. This must be done carefully since it is not

often apparent which product variation brings in the revenues. The prices must be kept competitive

and promotion should be pulled back at a level that will make the product presence visible and at

the same time retain the loyal customer.

Product: The number of products in the product line may be reduced. Rejuvenate surviving

products to make them look again new.

Price: Prices are lowered to liquidate inventory of discontinued product.

Distribution: Distribution becomes more selective. Channels that no longer are profitable are

phased out.

Promotion: Expenditures are lower and aimed at reinforcing brand image for continued products.


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5.3 Strategies of Product life Cycle


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5.4 Explain the Crossing the ChasmThis is the book written by Geoffrey Moore. It is a bible for marketing guys. Every business is

based on the tradition technology Adoption Life Cycle., a smooth bell curve of high tech

customers, progressing from Innovators, Early Adopters, Early Majority, Late Majority, and finally

Laggards.

In turn, this model becomes the foundation for a high-tech marketing model which says the way

to develop a market is to work the curve from left to right, progressively winning each group of

users, using each "captured" group as a reference for the next.

Early Adopter:

Rare breed of visionaries

These members are having insight to match an emerging technology to strategic

Opportunity.

The core goal is business goal not technology goal

Visionaries drive the high tech industry because they see the potential for an order of

magnitude return on investment and willingly take high risk to pursue this goal.

Visionaries are very easy to sell but very hard to convince because they are buying a

dream.

They want to start out with a pilot project, which makes sense because they are 'going

where no man has gone before' and you are going with them.


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Early Majority:

They are pragmatics.

they care about the company they are buying from, the quality of the product they

are buying, the infrastructure of supporting products and system interfaces, and the

reliability of the service they are going to get

It is very difficult to break into a new industry selling to pragmatists. References and

relationships are very importantPragmatists won't buy from you until you are

established, yet you can't get established until they buy from you

Once a startup has earned its spurs with the pragmatist buyers within a given vertical

market, they tend to be very loyal to it, and even go out of their way to help it succeed.

"Pragmatists are not anxious to reference visionaries in their buying decisions. Hence the

chasm. Four fundamental characteristics of visionaries that alienate pragmatists:

o Lack of respect for colleagues' experiences.o Taking greater interest in technology than in their industry.o Failing to recognize the importance of existing product infrastructure.o Overall disruptiveness.

The chasm is because it difficult convince between the Early Adopter to Early Majority. It is a big

chasm. Because early majority people never ever convinced with simple question and answers.

Late Majority: Skeptical People, will use new ideas or products only when the majority is using it.

Laggards: Traditional people, caring for the old days, are critical towards new ideas and will only accept

if the new idea has become main stream or even tradition.


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6 Product Life Cycle Requirement Management

7 ReferenceCrossing the Chasm by Geoffrey Moore

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