Product Realization

1. New Product Development
Prepared by :Fatima Zaitoun
Submitted to : Dr .Abdallah Al- Dwari

2. Content
◦ Definition NPD
◦ Why develop new product?
◦ Innovation management and NPD
◦ NPD as a strategy for growth
◦ New-Product Development Process
◦ Classification of new Products

3. New Product Development (NPD)
Definition:
◦ Is the complete process of bringing a new product, product
improvement, product modification or new brands to market

4. (NPD)- cont
Why develop new product?
◦ To replace declining product
◦ To take advantage of new technology
◦ To defeat rivals
◦ To maintain/increase market share
◦ To keep up with rivals
◦ To maintain competitive advantage
◦ To fill the gap in the market

5. Innovation management and NPD
◦ The new products are the outputs of the innovation process,
where the new product development process is a sub-
process of innovation.

6. Innovation management and NPD-cont
◦ Analyzing the development of new products by a variety of perspective:
the
development
of new
products
The development
of new product
Production
management
Marketing
Economics
Design and
engineering

7. Innovation management and NPD-cont
◦ “The variety of views presented on the subject is not
a weakness. Indeed, It should be viewed as a
strength”

8. Innovation management and NPD-cont
New products and prosperity:
Examples:
◦ Microsoft in rapidly growing home computer industry,
◦ Apple, Samsung in the early development of the same industry
“An important point that the success in one year does not
ensure success in the next”.

9. NPD as a strategy for growth
Ansoff Matrix
◦ The Ansoff Matrix is a strategic planning tool that links an organization’s
marketing strategy with its general strategic direction.

10. Ansoff Matrix
Current
Markets
Current product
New
Market
New product

11. Ansoff Matrix -cont
Market Penetration:
◦ Grow in the existing markets selling existing products.
◦ Low Risk
◦ But How?
◦ Be competitive, low cost or Innovation
◦ Understanding customers
◦ E.g. Boots Pharmacy

12. Ansoff Matrix -cont
Market Development
◦ Explore new markets with existing products.
◦ Moderate Risk
◦ But How?
◦ Explore new geographical locations e.g. Asia/Africa
◦ Explore new distribution channels. e.g. online retailers.
◦ E.g. Boots have more than 2500 ramification inside/outside England .

13. Ansoff Matrix -cont
Product development
◦ Development new product for existing markets.
◦ But How?
◦ Brand extension.
◦ E.g. Boot works in other than medication such as; perfumes, makeup, juices .

14. Ansoff Matrix -cont
Diversification
◦ Departure from existing market and product line
◦ High risk
◦ But how?
◦ Willingness to invest.
◦ E.g. if Boot decides to open hospital in Jordan (risk!!)

15. New-Product Development Process

16. New-Product Development Process
1-Idea Generation:
Is a systematic search for new product ideas
◦ Internal sources refer to the company’s own formal research and development,
management and staff
◦ External sources refer to sources outside the company such as customer,
competitors,
Distributors, suppliers, outside design firms

17. NPD(Process)-cont
2-Idea screening:
◦ Identify good ideas and drop poor ideas
◦ Screening Framework:
◦ -is it real?
◦ -can we win?
◦ -is it worth doing?
◦ The company should be able to answer yes to the questions before developing the
new product idea further.

18. NPD( Process )-cont
3-Concept Development and Testing
◦ Product idea is an idea for a possible product that the company can see itself offering
to the market
◦ Product concept is a detailed version of the idea stated in meaningful consumer
terms
◦ Product image is the way consumers perceive an actual or potential product

19. NPD( Process )-cont
3- Concept Development and Testing(con)
◦ Concept testing refers to testing new-product concepts with groups of target
consumers

20. NPD( Process )-cont
Marketing Strategy Development
4- Business analysis: involves a review of the sales, costs, and profit projection
to find out Whether they satisfy the company’s objectives
if they do, the product can move to the product development
stage

21. NPD( Process )-cont
Marketing Strategy Development
5-Product development involves the creation and testing of one or more physical
versions by engineering departments (prototype)
◦ Requires an increase in investment
◦ Ex. Gillette uses employee-volunteers to test new shaving product

22. NPD( Process )-cont
Marketing Strategy Development
6-Test Marketing is the stage at which the product and marketing program are
introduced into more realistic marketing settings
◦ provides the marketer with experience in testing the product and entire marketing program
before full introduction

23. NPD( Process )-cont
Marketing Strategy Development
when firms test
market
• new product with
large investment
• Uncertainty about
product or
marketing program
when firms may
not test market
• Simple line
extension
• Copy of competitor
product
• Low costs
• Management
confidence

24. NPD( Process )-cont
Marketing Strategy Development
7-Commercialization is the introduction of the new product in the market
◦ When to launch “Timing”
◦ Where to lunch “location” ; Single location, national/international market
◦

25. Managing new product Development
Successful new product development should be :
◦ Customer centered
◦ Team centered

26. Classification of new Products
1-New-to-the-world products
◦ They are the first of their kind and create a new market; iPod, flat screen TV
2-New product lines (new to the firm)
Although not new to the marketplace, these products are
new to the particular company as Boots’ Products

27. Classification of new Products
3-Additions to existing lines
◦ This category is a subset of new product lines above
4-Improvement and revisions to existing products
◦ These new products are replacements of existing products in a firm’s product line
As Samsung improvements on its products

28. Classification of new Products
5-Repositionings
◦ These new products are essentially the discovery of new applications for existing
products as Aspirin