NPD Product Life Cycle Powerpoint

8/13/2019 NPD Product Life Cycle Powerpoint

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•Product means any marketable thing with

some utility in it, produced either by a labour

or through series of automated processes.

•Development is an act of making or

achieving a continuous progress in

something by someone. Progress transit

from an earlier policy (traditional approach)

to an advanced policy (modern approach).

What is Product Development? Meaning



Product development is a specializedactivity. It is done to improve the

existing product or to introduce a new product in the market. It is also done

to improve the earlier features ortechniques or systems .




New-product development means to introduce abrand-new product in the market. It means to add

a fresh product to an existing line of products.

Normally, a company starts with one or two

products. However, after some time it has fewmore products in its line (say from 15 to 20). This

is possible only because of new-product

development.




Product Development is a creation, innovation,

utility enhancement or continuous improvement ofearlier features design, service, etc.) of an

existing product or developing manufacturing) anentirely new kind of product to satisfy the

requirements of its end-users consumers).”

Definition of Product Development

http://lh4.googleusercontent.com/-yzhTH0LjTaE/UOtbRtMqKpI/AAAAAAAAGk4/3v6igKeK5KI/s640/Product-Development-Meaning-Definition-Example.png



http://lh4.googleusercontent.com/-yzhTH0LjTaE/UOtbRtMqKpI/AAAAAAAAGk4/3v6igKeK5KI/s640/Product-Development-Meaning-Definition-Example.png



Product development takes place, works orfunctions as under:

Creation of an entirely new product or upgradingan existing product by exploring all possibilitiesand outcomes.

Innovation of a new or an existing product todeliver better and enhanced services to end-users.

Continuous improvement of a new product orenhancing an existing product by givingpreference to satisfy the demand of end-users.

Enhancing the utility of a new product orupgrading features of an existing product, for thepersonal and/or commercial use, to expand thedefined goal (objective).



What is a new product ?

A product that opens an entirelynew market

A product that adopts or replacesan existing product

A product that significantlybroadens the market for anexisting 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



Types of new product

Innovative products

New product lines – to allow the firm to enter an existingmarket

Addition to product line – to supplement the firm’s existingproduct line

Improvements and revisions of existing product

Repositioned products – existing products targets at new

market Cost reduction new product that provide similar

performance at lower cost



Why develop New Product ?

To create stars and cash cows for the future

To replace declining product

To take advantage of new technology To defeat rivals

To maintain/increase market share

To keep up with rivals

To maintain competitive advantage

To fill gap in the market



Product development involves risk

of investing precious time, money

(capital) and intellectualresources. Therefore, it is

necessary that it is well-planned.

A good product developmenthelps to:



Create new business opportunities and

bring growth.

Boost productivity and profitability of the

entrepreneurs.

Enhance the satisfaction levels of the

consumers.



Example of Product Development

Packing wheat flour in retail bags for

household consumption.

Packing cooking oil in retail pouches for

household consumption.

Converting land line phones into wireless

handsets for easy portability and full-time

access to communication.



Example of Product Development

Modify desktop computers into light-weight

laptops to ease portability.

Transform a traditional library into an e-library

to facilitate faster searching and accessibility of

electronic books and other digital documents.

Convert a simple airplane into a fighter jet to

achieve a greater speed.



Stages in New product development Idea Generation

Idea Screening

Concept developmentand testing

Market strategydevelopment

Business Analysis Test marketing

Commercialization



An Organized New Product Development Process is Critical



Step 1: Idea Generation



Idea Generation

Idea generation is continuous,systematic search for new productopportunities. It involvesdelineating sources of new ideas

and methods for generating them. Ideas for new products can beobtained from basic researchusing a SWOT analysis(OPPORTUNITY ANALYSIS),

Marketand consumer trends, company'sR&D department, competitors,focus groups, employees,salespeople, corporate spies,

http://en.wikipedia.org/wiki/SWOT





Step 2: Screening



Idea Screening

The object is to eliminate unsoundconcepts prior to devoting resources tothem.

The screeners must ask these questions: Will the customer in the target

market benefit from the product?

What is the size and growthforecasts of the marketsegment/target market?

What is the current or expectedcompetitive pressure for the productidea?

What are the industry sales andmarket trends the product idea isbased on?

Is it technically feasible tomanufacture the product?

Will the product be profitable when

manufactured and delivered to thecustomer at the target price?

http://en.wikipedia.org/wiki/Target_market








Step 3: Idea Evaluation



Concept testing

Concept testing present the consumer witha proposed product and measure attitudesand intention at this early stage of

development.

Concept testing of prototypes can help

avoid costly mistakes.



Step 4: Development



Market Strategy Development

2. Outlines the planned price,distribution strategy, andmarketing budget for the first

year.

3. Describes thelong-run sales andprofit goals and marketing-mix

strategy over time.

1. Describe the market’s size, structure, and behaviour,the planned product positioning, and the sales, market

share, and profit goals for first few years.

Includes development of three part strategy plan



Business financial Analysis

Estimate likely selling

price based upon

competition and customer

feedback

Estimate sales volume

based upon size ofmarket

Estimate profitability

and breakeven point



Test Marketing

Test marketing involves placing a product

for sale in one or more selected areas and

observing its actual performance under theproposed marketing plan



Step 5: Commercialization



Commercialization

Commercialization involves implementing a

total marketing plan and full production

Launch the product Produce and place advertisements

and other promotions

Fill the distribution pipeline with

product

Critical path analysis is most useful

at this stage

http://en.wikipedia.org/wiki/Advertising

http://en.wikipedia.org/wiki/Promotion

http://en.wikipedia.org/wiki/Distribution_(business)

http://en.wikipedia.org/wiki/Critical_path_analysis

http://en.wikipedia.org/wiki/Critical_path_analysis

http://en.wikipedia.org/wiki/Distribution_(business)

http://en.wikipedia.org/wiki/Promotion

http://en.wikipedia.org/wiki/Advertising



CONCEPT OF PRODUCT LIFECYCLE



The concept

Every product has a life cycle, just as in case

of human beings.

A Product after being introduced in to the

market, goes through different stages which iscategorised on the basis of product, profit,

competition and market behaviours.

It is rather a managerial tool for forecasting &strategic planning.



The Product Life Cycle



Product Life Cycle Template

Introduction Growth Maturity Decline

Product

Extension

S a l e s

TIME



Introduction stage

Product is Introduced in the market for the first

time.

Slow growth rate

Negative or low profits

Huge marketing expenses

No competition

Highly volatile in nature



Market Introduction – Investing in the Future

+



Market Introduction – Investing in the Future

Market Growth Profits Go Up & Down



Monopolistic CompetitionDevelopsMonopolistic CompetitionDevelops

Innovation AttractsCompetitionInnovation AttractsCompetition

Market Growth – Profits Go Up & Down

Profits Peak and ThenDecline

Don’t Ignore Long-Term Competitive Trends!



Growth Stage

Sales rises at an increasing rate

Profitable returns from the market

Reduced promotional expenses

Hard work for the firm to establish dealerships

& distribution outlets

Competitors starts to explore the market







Persuasive, More Costly

Promotion

Brands Are More Similar

Greater Price

Competition/Price Sensitivity

Persuasive, More Costly

Promotion

Brands Are More Similar

Greater Price

Competition/Price Sensitivity

Market Maturity – Sales Level Off,

Profits Continue Down

Maturity May Last a Long

Time



Maturity Stage

Sales are still increasing, but at a decreasing

rate.

Severe competition

Profits fall in line with falling prices, which isunavoidable to retain market share.

Investments in promotional measures to

differentiate the product New distribution strategies & alliances







Sales Decline – A Time of Replacement

+



Saturation Stage

Sales are stable

Profits fall drastically

Competition is at the peak

Continued need for promotion to maintain

sales

Firm has to plan product modifications



The old TV is getting replaced



The old TV is getting replaced

by..



Decline

Characterised by falling sales for the whole

industry.

Prize cutting is continued and profit is at zero

level. Firm has to take a major strategic decision

whether to continue with the product or

abandon it.





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NPD Product Life Cycle Powerpoint