(Department of Management)
Semester : 3
Section : B
Subject : Marketing Management
Topic : Question 32. Define a new product and new product development process.
Companies that excel at developing and managing new products reap big rewards. New products are the lifeblood of the company. A new product is a product: • That opens an entirely new market.
• That adapts and replaces an existing product.
• That significantly broadens the market for an existing product. • An old product introduced in a new market.
• An old product packaged in a different way.
• An old product marketed in a different way.
A firm can obtain new products in two ways. One is through acquisition - by buying a whole company, a patent, or a license to produce someone else’s product. The other is through the firm’s own new-product development efforts – original products, product improvements, product modifications and new brands that the firm develops through its research and development efforts.
New Product Development (NPD) is a process which is designed to develop, test and consider the viability of products which are new to the market in order to ensure the growth or survival of the organization. It is a means of infusing creativity and managing risk. The eight major steps in this process are: 1. Idea generation
2. Idea screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Test marketing
1. Idea Generation: NPD starts with idea generation – the systematic search for new product ideas. A company typically generates hundreds of ideas, even thousands, in order to find a few good ones. For example, IBM held an “Innovation Jam” which generated 46,000 ideas, of which IBM planned to develop only 10. Major sources of new – product ideas include internal sources and external sources....