New Product Development

Topics: Marketing, Strategic management, Brand Pages: 33 (10490 words) Published: January 12, 2011
INTRODUCTION

For any company, to maintain an already established brand name is as equally a challenging task as the creation of the brand. In today’s challenging market environment, any business is expected to continuously focus on organizational learning and continuous improvement and introduction of products and services to stay alive in the market.

Continuous learning helps organizations to identify gap between the current business and areas which could be tapped with the help of existing knowledge of the market which is close to our existing area of focus. This fits to services businesses as well as products businesses. Where there is a solution to a problem, there is the prospect for a business.

One of the many ways of continuous improvement of the business is product/service diversification. It is the key to any organization to be successful in its market. Sometime it acts as a key to survive and some time it acts a necessity for gaining competitive advantage over other companies in the market. Often this is possible through Innovation.

This article discusses on Luxottica S.p.A (Luxottica)’s effort in diversifying its successful and premium brand Ray Ban from its sun glasses business to eye care and solutions. Also it analyses current market position of Luxottica and more specifically Ray Ban, and discusses its current strategy in introducing products and services, efforts on innovation and the feasibilities and business prospects of the latest product idea ‘Ray Blendz’ developed by the company’s Research and Development (R&D) team.

I have used various research methodologies which focus mainly on the following: 1. Should the ‘Ray Blenz’ be developed as a separate brand i.e, as one among Ray Ban’s core products or just a technology which would be incorporated with its existing products? 2. How much the new product would add value to existing product portfolio? 3. Its effect on Ray Ban’s brand.

4. Future prospects of the business associated to ‘Ray Blenz’? I have conducted a study with an objective of addressing following attributes of any business with the help of the given company Luxottica: 1. Deepen understanding of learning and development strategies and practices for new product development 2. Map the development approaches against the company’s competitors, by developing a benchmarking tool; and 3. Address gaps in the organizational objectives and new product strategies which spans from idea generation to delivering service to the delivered product.

COMPANY OVERVIEW
Ray-Ban is a manufacturer of high-end sunglasses, founded in 1937 by Bausch & Lomb. In 1999, Bausch & Lomb sold the brand to the Italian Luxottica Group for a reported $1.2billion. With net sales of Euro 5.1 billion, employee strength of 60,000 and a firm position in the global optical products market, Luxottica owns top brands of the world like Ray Ban and many others. The company was founded in 1961 by Leonardo Del Vecchio and The brand is very popular in UK as a fashion and eye care accessory. The group has operations in 130 countries across five continents. It is headquartered in Milan, Italy and employs about 60,975 people. The group recorded revenues of E5, 201.6 million (approximately $7,653.3 million) during the financial year (FY) ended December 2008, an increase of 4.7% over FY2007. The operating profit of the group was E749.8 million (approximately $1,103.2 million) during FY2008, a decrease of 10% compared to FY2007. The net profit was E379.7 million (approximately $558.7 million) in FY2008, a decrease of 22.9% compared to FY2007.

BUSINESS DESCRIPTION
The Luxottica Group (Luxottica) mainly deals in prescription frames and sunglasses in the premium and luxury categories. The group's products are distributed in 130 countries, under its house brands including, Ray-Ban, Oakley, Vogue, Persol, Oliver Peoples, Arnette and Revo, and under license brands including Bvlgari, Burberry,...

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