plc spartens

8/14/2019 Plc Spartens

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New Product Development

andProduct Life-Cycle Strategies


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In business and engineering, new productdevelopment (NPD) is the term used todescribe the complete process of bringing anew product or service to market. There aretwo parallel paths involved in the NPD process:

one involves the idea generation,product design, and detail engineering; theother involves market research andmarketing analysis. Companies typically see

new product development as the first stage ingenerating and commercializing new productswithin the overall strategic process ofproduct life cycle management used tomaintain or grow their market share.

New product development
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/Product_life_cycle_managementhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Business


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The product life cycle goes through many phases, involves many professional

disciplines, and requires many skills, tools and processes.

Product life cycle (PLC) has to do with the life of a product in the market with

respect to business/commercial costs and sales measures; whereas product life

cycle management (PLM) has more to do with managing descriptions andproperties of a product through its development and useful life, mainly from a

business/engineering point of

view.

Product lifecycle


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To say that a product has a life cycle is to assert four

things:

1) That products have a limited life.

2) product sales pass through distinct stages, each posing different

challenges, opportunities, and problems to

the seller

3) profits rise and fall at different stages of product life cycle

4) products require different marketing, financial, manufacturing,

purchasing, and human resource strategies in each life cycle stage.


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strategies

Marketing strategy is a process thatcan allow an organization to concentrateits limited resources on the greatest

opportunities to increase sales andachieve a sustainablecompetitive advantage. A marketing

strategy should be centered around thekey concept that customer satisfaction isthe main goal.
http://en.wikipedia.org/wiki/Competitive_advantagehttp://en.wikipedia.org/wiki/Customer_satisfactionhttp://en.wikipedia.org/wiki/Customer_satisfactionhttp://en.wikipedia.org/wiki/Competitive_advantage


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New-Product Development

Strategies

New-Product Development

Strategies

OriginalProductsOriginalProducts

Product

Improvements

Product

Improvements

Product

Modifications

Product

Modifications

NewBrandsNew

Brands

AcquiredCompaniesAcquired

Companies

Acquired

Patents

Acquired

Patents

Acquired

Licenses

Acquired

Licenses

Strategies for Obtaining New Product Ideas


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Causes of New Product FailuresCauses of New Product Failures

Overestimation of Market Size

Product Design Problems

Product Incorrectly Positioned, Priced orAdvertised

Costs of Product Development Competitive Actions

To create successful new products, the

company must: understand its customers, markets and

competitors

develop products that deliver superior value to

customers.


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Process


Process

IdeaGeneration

IdeaScreening

ConceptDevelopment

and Testing

MarketingStrategy

BusinessAnalysis

Product

Development

TestMarketing

Commercialization


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CUSTOMERS

CUST

OMERS

COMPETITOR

S

COMPE

TITOR

S

DISTR

IBUTORS

DISTR

IBUTORS

SUPPLIERS

SUPP

LIERS

New Product Development ProcessStep 1. Idea Generation

New Product Development ProcessStep 1. Idea Generation

Idea Generation is the SystematicSearch for New Product IdeasObtained Internally and From:


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Process to spot good ideas and drop poorones as soon as possible.

Many companies have systems for ratingand screening ideas which estimate:

Market Size

Product Price

Development Time & Costs

Manufacturing Costs Rate of Return

Then, the idea is evaluated against a set ofgeneral company criteria.

New Product Development ProcessStep 2. Idea Screening

New Product Development ProcessStep 2. Idea Screening


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New Product Development ProcessStep 3. Concept Development & Testing

New Product Development ProcessStep 3. Concept Development & Testing

1. Develop Product Ideas intoAlternative

Product Concepts

1. Develop Product Ideas intoAlternative

Product Concepts

2. Concept Testing - Test theProduct Concepts with Groups

of Target Customers

2. Concept Testing - Test theProduct Concepts with Groups

of Target Customers

3. Choose the Best One3. Choose the Best One


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New Product Development ProcessStep 4. Marketing Strategy Development

New Product Development ProcessStep 4. Marketing Strategy Development

Part Two Describes Short-Term:Products Planned Price

DistributionMarketing Budget

Part Two Describes Short-Term:Products Planned Price

DistributionMarketing Budget

Part Three Describes Long-Term:Sales & Profit GoalsMarketing Mix Strategy

Part Three Describes Long-Term:Sales & Profit GoalsMarketing Mix Strategy

Marketing Strategy Statement Formulation

Part One Describes Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share

Part One Describes Overall:Target Market

Planned Product PositioningSales & Profit Goals

Market Share


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New Product Development ProcessStep 5. Business Analysis

Step 6. Product Development

New Product Development ProcessStep 5. Business Analysis

Step 6. Product Development

Business Analysis

Review of Product Sales, Costs,and Profits Projections to See if

They Meet Company Objectives

Business Analysis

Review of Product Sales, Costs,

and Profits Projections to See if

They Meet Company Objectives

If Yes, Move to

Product Development

If Yes, Move to

Product Development

If No, EliminateProduct ConceptIf No, EliminateProduct Concept


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New Product Development ProcessStep 7. Test Marketing

New Product Development ProcessStep 7. Test Marketing

StandardTest Market

Full marketing campaign

in a small number ofrepresentative cities.

StandardTest Market

Full marketing campaign

in a small number ofrepresentative cities.

SimulatedTest Market

Test in a simulatedshopping environment

to a sample ofconsumers.

SimulatedTest Market

Test in a simulatedshopping environment

to a sample ofconsumers.

ControlledTest Market

A few stores that have

agreed to carry newproducts for a fee.

ControlledTest Market

A few stores that have

agreed to carry newproducts for a fee.


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New Product Development ProcessStep 8. Commercialization

New Product Development ProcessStep 8. Commercialization

When?When? Where?Where?To

Whom?To

Whom? How?How?

Commercialization is theIntroduction of the New Product

into the Marketplace.


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Speeding Up DevelopmentSpeeding Up Development

Step 1Step 1

Step 2Step 2

Step 3Step 3

Step 4Step 4

Step

1

Step

2

Step 3

Step 4

Sequential Simultaneous


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Product Life CycleProduct Life Cycle

Time

ProductDevelop-ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

Sales and Profits Over the Products Life From

Introduction to Decline

I t d ti St f th PLC


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Introduction Stage of the PLCIntroduction Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low salesLow sales

High cost per customerHigh cost per customer

NegativeNegative

Create product awarenessand trial

Create product awarenessand trial

Offer a basic productOffer a basic product

Use cost-plusUse cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness amongearly adopters and dealers

Build product awareness among

early adopters and dealers

G h S f h PLC


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Growth Stage of the PLCGrowth Stage of the PLC

Summary of Characteristics, Objectives, &

Strategies

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Rapidly rising salesRapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions,

service, warranty

Offer product extensions,

service, warrantyPrice to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness and interest inthe mass market

Build awareness and interest in

the mass market

M t it St f th PLC


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Maturity Stage of the PLCMaturity Stage of the PLC


Strategies

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defendingmarket share

Maximize profit while defendingmarket share

Diversify brand and modelsDiversify brand and models

Price to match or bestcompetitors

Price to match or bestcompetitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences andbenefits

Stress brand differences and

benefits

D li St f th PLC


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Decline Stage of the PLCDecline Stage of the PLC


Strategies

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk thebrand

Reduce expenditure and milk thebrand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Go selective: phase outunprofitable outlets

Go selective: phase outunprofitable outlets

AdvertisingAdvertising Reduce to level needed to retainhard-core loyal customers

Reduce to level needed to retain

hard-core loyal customers

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