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new product development definition
development of original products, product improvements, product modifications, new brands through firm's own R&D efforts
new product development strategy
can be obtained via acquisition or development
new products suffer from high failure rates
how to obtain new product ideas?
acquired companies, patents, licenses
original products, product improvements, product modifications, new brands
causes of new product failures
as many as 80% of new consumer packaged products failed
overestimation of market size, product design problems, incorrectly positioned, priced or advertised, product may have been pushed despite poor marketing research findings, costs of product development, competitive actions
how to improve new product success?
unique superior product, well-defined product concept
understand customers, markets and competitors
develop products that deliver super value to customers
major stages in new product development
idea generation -> idea screening -> concept development and testing -> marketing strategy -> business analysis -> product development -> test marketing -> commercialization
step 1: idea generation
systematic search for new product ideas obtained internally
also from customers, competitors, distributors, suppliers
crowdsourcing
product development costs increase dramatically in later stages
ideas are evaluated against criteria, most eliminated
market size, product price, development time & costs, manufacturing costs, rate of return
evaluated further against set of general company criteria
step 3: concept development
develop new product ideas into alternative detailed product concepts
test new product concepts with target customers
choose one that has strongest appeal to target customers
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