THE STRATEGIC ELEMENTS OF PRODUCT DEVELOPMENT

PRODUCT
(Kotler, 2008), a product is anything that is offered to a market for attention, acquisition, use or consumption, and that might satisfy a need or want. It includes physical objects, services, persons, places, organization, and ideas.

Classification of Products

• ACCORDING TO DURABILITY AND TANGIBILITY a. Durable goods-consumer goods that are used over an extended period of time. b. Non-durable goods-consumer goods that are quickly consumed, worn-out or out dated. c. Services - are activities, tasks, benefits or satisfactions that are offered for a price

CHARACTERISTICS OF SERVICES

• Intangible Inseparable from the service providers Cannot be standardized Buyers play important roles in the creation and distribution of services Wide variations in service standards

Untitled Slide

When you here new products you think about technology, smart phones smart watch etc. But most new products are far simpler - low carb sodas, new movies, new flavors of yoghurt.

Over a hundred billion dollars are spent yearly on the technical development phase of new products. Many managers realize that radical innovation is critical to future growth and even the survival of the firm.

GLOBALIZATION AND NEW PRODUCT DEVELOPMENT

• Like all aspects of modern business, product development has become more challenging due to increased _______

GLOBAL INNOVATION CULTURE

• Global innovation culture means that a firm is open to global markets to global markets, mindful of differences in customer needs and preferences, and respectful of different national cultural business environments.
• ______ have the most effective global new product programs

Underlying principle of product development: it’s all about _______

HOW PRODUCT DEVELOPMENT IS DIFFERENT

• All members of a new products team make an important contribution to product development, so we must be aware of, and try to avoid, narrow functional viewpoints.
• Marketers have to learn to work with scientist, engineers, lawyers, production managers and so on

NOT ALL NEW PRODUCTS ARE PLANNED

• A Raytheon engineer on experimental radar noticed that a chocolate bar in his pocket melted. This firm develop the first _______
• A chemist licked his finger to turn the page of a book and got a sweet taste, remembering that he had spilled some experimental fluid, he checked it out and produced _______

NEW PRODUCT AND SUCCESS

• New-to-the-world product - these products are inventions that create a whole new market. Ex ipad ipod etc.
• Also called ________
• New-to-the-firm or new product lines. Products that take a firm into a category new to it. The products are not new to the world, but are new to the _______

WHAT IS A NEW PRODUCT

• Addition to existing product lines. These are flanker brands, or line extensions, designed to flesh out the product line as offered to the firms current markets.

WHAT IS A NEW PRODUCT

• Improvements and revisions to existing products. Current products made better.
• Repositionings. Products that are retargeted for a new use or application.

WHAT IS A NEW PRODUCT

• Costs reduction. New products that simply replace existing products in the line, providing customer similar performance but at a lower costs

DOES THE FIELD OF NEW PRODUCTS OFFER CAREERS?

• Yes it does
• The specific jobs in this field are three.
• First is ______ on a team, sometimes full time more often part time. Ex of this is a marketing researcher.

DOES THE FIELD OF NEW PRODUCTS OFFER CAREERS?

• Second is _____ this role is leader of a team of people representing the functions that will be required
• Third is _______ responsible for helping project managers devlop and use good new product processes

CAREER TIPS FOR NEW PRODUCT

• Be functional, not functionally parochial. Have experience in more than one function (marketing, manufacturing etc)
• Be a risk taker
• Think like a general manager.

CAREER TIPS FOR NEW PRODUCT

• Be a combination of optimist and a realist, aggressor and team player, leader and follower
• Be comfortable in chaos and confusion

THE STRATEGIC ELEMENTS OF PRODUCT DEVELOPMENT

• It provides a framework to guide management through product development and help them focus on what is most important.
• All three of the strategic elements must be in place, and each is coordinated with, and supports, all the others.
• New product process, product innovation charter, well managed product portfolio.

3 STRATEGIC ELEMENTS

• _______ is the procedure that takes the new product idea through concept evaluation, product development, launch, and post launch.
• _______ ensures that the new product team develops products that are in line with firm objectives and strategies and that address marketplace opportunities

3 STRATEGIC ELEMENTS

• _____ helps the firm asses which new products would be the best additions to the existing product line, given both financial and strategic objectives.

Untitled Slide

GO OR NO GO

• If some key information is still missing or unavailable, a third option is available which we call an _____
• This means that the project will move forward, but the missing information must be gathered and the project could still be halted at a later phase

An evaluation task that includes conditional go decision is sometimes called a ______. For example, a new packed food product might do reasonably well at a concept test, but management might feel they don’t really have a read on the market until some product use testing is conducted.

PRODUCT DEVELOPMENT IN ACTION

• To see the ongoing efforts of the best product developers in the business, check product development & management association www.pdma.org
• PDMA sponsors an Outstanding Corporate Innovator award.