INSTITUTE –University School of

Business
DEPARTMENT -Management
M.B.A
MARKETING MANGEMENT- 23BAT-607
Dr. Bindu Aggarwal
Associate Professor
Chandigarh University

UNIT-2 New Product

Development Process DISCOVER . LEARN . EMPOWER

1
 Course Outcome
https://
CO Title Level
Number skillshop.exceedlms.com
• Space for visual (size 24)

CO1 Understand

Provide information to student by

explaining the key principles and
concepts of marketing.

CO2 Apply
Will be covered in this
Students will be able to Construct an
effective marketing strategy, including lecture
a marketing mix for a product/service.

CO3 Analyze

Plan an integrated marketing

communications campaign that uses a
range of mass communications media
that are well suited to reach the target
market. 2
Causes of New Product Failures

• Overestimation of Market Size

• Product Design Problems
• Product Incorrectly Positioned, Priced or Advertised
• Costs of Product Development
• Competitive Actions

• To create successful new products, the company must:

• understand it’s customers, markets and competitors
• develop products that deliver superior value to customers.
New Product Development
Process

• Idea Generation and Screening

• Concept Development and Testing
• Marketing Strategy
• Business Analysis
• Product Development
• Test Marketing
• Commercialization
New
New Product
Product Development
Development Process
Process
Step
Step 1.
1. Idea
Idea Generation
Generation

Systematic Search for New Product

Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers
New
New Product
Product Development
Development Process
Process
Step
Step 2.
2. Idea
Idea Screening
Screening

• Process to spot good ideas and drop poor ones

• Criteria
• Market Size
• Product Price
• Development Time & Costs
• Manufacturing Costs
• Rate of Return
New
New Product
Product Development
Development Process
Process
Step
Step 3.
3. Concept
Concept Development
Development &
& Testing
Testing

1.
1. Develop
DevelopProduct
ProductIdeas
Ideasinto
into
Alternative
Alternative
Product
ProductConcepts
Concepts

2.
2. Concept
ConceptTesting
Testing--Test
Testthe
the
Product
ProductConcepts
Conceptswith
withGroups
Groups
of Target Customers
of Target Customers

3.
3. Choose
Choosethe
theBest
BestOne
One
New
New Product
Product Development
Development Process
Process
Step
Step 4.
4. Marketing
Marketing Strategy
Strategy Development
Development
Marketing Strategy Statement Formulation

Part
PartOne
One--Overall:
Overall:
Target
Target Market
Market
Planned
Planned Product
Product Positioning
Positioning
Sales
Sales &
& Profit
Profit Goals
Goals
Market
Market Share
Share

Part
PartTwo
Two--Short-Term:
Short-Term:
Product’s
Product’s Planned
Planned Price
Price
Distribution
Distribution
Marketing
Marketing Budget
Budget

Part
PartThree
Three--Long-Term:
Long-Term:
Sales
Sales &
& Profit
Profit Goals
Goals
Marketing
Marketing Mix
Mix Strategy
Strategy
New
New Product
Product Development
Development Process
Process
Step
Step 5.
5. Business
BusinessAnalysis
Analysis
Step
Step 6.
6. Product
Product Development
Development
Business
BusinessAnalysis
Analysis

Review
Review of
of Product
Product Sales,
Sales, Costs,
Costs,
and
and Profits
Profits Projections
Projections to
to See
See ifif
They
They Meet
Meet Company
Company Objectives
Objectives

IfIf No,
No, Eliminate
Eliminate
Product
Product Concept
Concept

IfIfYes,
Yes, Move
Move to
to
Product
Product Development
Development
New
New Product
Product Development
Development Process
Process
Step
Step 7.
7. Test
Test Marketing
Marketing

Standard
Standard Controlled
Controlled
Test
Test Market
Market Test
Test Market
Market
Full
Fullmarketing
marketingcampaign
campaign AAfew
in fewstores
storesthat
thathave
have
in a small numberof
a small number of agreed to carry new
agreed to carry new
representative
representativecities.
cities. products
productsfor
foraafee.
fee.

Simulated
Simulated
Test
Test Market
Market
Test
Testin
inaasimulated
simulated
shopping
shoppingenvironment
environment
to
to a sampleof
a sample of
consumers.
consumers.
 Product Life Cycle

Sales and
Profits ($)

Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Losses/
Investments ($)
Introduction Stage of the PLC

Sales
Sales Low
Lowsales
sales

Costs
Costs High
Highcost
costper
percustomer
customer

Profits
Profits Negative
Negative
Create
Createproduct
productawareness
awareness
Marketing
Marketing Objectives
Objectives and trial
and trial

Product
Product Offer
Offeraabasic
basicproduct
product

Price
Price Use
Usecost-plus
cost-plus

Distribution
Distribution Build
Buildselective
selectivedistribution
distribution
Build
Buildproduct
productawareness
awarenessamong
amongearly
Advertising
Advertising adopters and dealers
early
adopters and dealers
Growth
Growth Stage
Stage of
of the
the PLC
PLC

Sales
Sales Rapidly
Rapidlyrising
risingsales
sales

Costs
Costs Average
Averagecost
costper
percustomer
customer

Profits
Profits Rising
Risingprofits
profits

Marketing
Marketing Objectives
Objectives Maximize
Maximizemarket
marketshare
share

Product
Product Offer
Offerproduct
productextensions,
extensions,service,
service,warranty
warranty

Price
Price Price
Priceto
topenetrate
penetratemarket
market

Distribution
Distribution Build
Buildintensive
intensivedistribution
distribution

Advertising
Advertising Build
Buildawareness
awarenessand
andinterest
interestin
market
inthe
themass
mass
market
Maturity
Maturity Stage
Stage of
of the
the PLC
PLC

Sales
Sales Peak
Peaksales
sales

Costs
Costs Low
Lowcost
costper
percustomer
customer

Profits
Profits High
Highprofits
profits

Marketing Maximize
Maximizeprofit
profitwhile
whiledefending
defending
Marketing Objectives
Objectives market
marketshare
share
Product
Product Diversify
Diversifybrand
brandand
andmodels
models

Price
Price Price
Priceto
tomatch
matchor
orbest
bestcompetitors
competitors

Distribution
Distribution Build
Buildmore
moreintensive
intensivedistribution
distribution

Advertising
Advertising Stress
Stressbrand
branddifferences
differencesand
andbenefits
benefits
Decline
Decline Stage
Stage of
of the
the PLC
PLC

Sales
Sales Declining
Decliningsales
sales

Costs
Costs Low
Lowcost
costper
percustomer
customer

Profits
Profits Declining
Decliningprofits
profits

Marketing
Marketing Objectives
Objectives Reduce
Reduceexpenditure
expenditureand
andmilk
milkthe
thebrand
brand

Product
Product Phase
Phaseout
outweak
weakitems
items

Price
Price Cut
Cutprice
price

Distribution
Distribution Go
Goselective:
selective:phase
phaseout
outunprofitable
unprofitableoutlets
outlets

Advertising
Advertising Reduce
Reducetotolevel
levelneeded
neededtotoretain
retain
hard-core loyal customers
hard-core loyal customers
 Blackboard
Assessment Pattern

Components HT-1 HT-2 Assignment Surprise Test Business Quiz GD Forum Attendance Scaled
Marks

Max. Marks 10 10 6 4 4 4 2 40

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THANK YOU

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