• 1. Module 7 New Product Development and Product Life-Cycle Strategies Dinesh Kumar LBSIM- New Delhi • 2. New Product Development Strategy and Process It can be defined as strategy which aims at bringing a new product or service to market. Which involves the following steps. Idea Generation & Screening Concept Development & Testing Business Analysis Beta Testing Technical Implementation Commercialization New Product Pricing • 3. Brief Explanation to Steps of Product Development Strategy Idea Generation & Screening continuous systematic search for new product opportunities Concept Development and Testing – Testing the product on the parameter of utility, features, reaction of potential customer based on sample questions and the production cost Business Analysis Estimating selling price, sales volume and profitability Beta Testing Producing a physical prototype, test it and make the changes, try selling in the test market area to determine the customer acceptance Technical Implementation Finalizing the Quality Mgt System, resource estimation, Department Scheduling, Supplier Collaboration, plan for Contingencies – what if planning. Commercialization Launching the product, produce and plan advertisement and other promotional activities, Critical path analysis is most useful at this stage • 4. Disruptive Innovation Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. • 6. Disruptive Innovation Theory Explained There is a simple, important principle at the core of the disruptive innovation theory: companies innovate faster than customers' lives change . Because of this, most organizations end up producing products that are too good, too expensive, and too inconvenient for many customers . By only pursuing these “sustaining innovations," companies unwittingly open the door to entrants that can offer simpler, more convenient and lower-cost products to those customers who have no need to keep up with the accelerated pace of innovative change. Micromax Mobile is one of the example of Disruptive Innovation • 7. Product Life Cycle Dinesh Kumar Saurabh Verma Pankaj Goyal Harsh Pahuja • 8. Why a product life cycle? A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle (PLC) When we say that a product has a life cycle we assert four things: Products have a limited life. Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. Profits rise and fall at different stages of the product life cycle. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life – cycle stages . • 9. Product Life-Cycle Strategies The Product Life Cycle (PLC) has Five Stages Product Development, Introduction, Growth, Maturity, Decline Not all products follow this cycle: Fads Styles Fashions • 10. Product Life Cycle …… is the course of a product’s sales and profits over time. ……… deals with the life of a product in the market with respect to business or commercial costs and sales measures. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. • 11. Product Life Cycle Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Sales and Profits Sales and Profits Over the Product’s Lifetime • 12. Three special categories of PLC
• 13. A Style is a basic and distinctive mode of expression appearing in a field of human endeavor. Styles appear in homes, clothing, art etc. A Fashion is a currently accepted or popular style in a given field. Fashion pass through four stages: Distinctiveness, emulation, mass fashion, decline. Fads are fashions that...
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