Stages in NPD (New Product Development) process and their financial and risk implication The eight stages 1. Idea Generation is often called the NPD of the NPD process. Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats). Market and consumer trends, companys R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features. • Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea. • Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step). 2. Idea Screening The object is to eliminate unsound concepts prior to devoting resources to them. • The screeners should ask several questions: o Will the customer in the target market benefit from the product? o What is the size and growth forecasts of the market segment / target market? o What is the current or expected competitive pressure for the product idea? o What are the industry sales and market trends the product idea is based on? o Is it technically feasible to manufacture the product? o Will the product be profitable when manufactured and delivered to the customer at the target price? 3. Concept Development and Testing Develop the marketing and engineering details o Investigate intellectual property issues and search patent databases o Who is the target market and who is the decision maker in the purchasing process? o What product features must the product incorporate? o What benefits will the product provide? o How will consumers react to the product? o How will the product be produced most cost effectively? o Prove feasibility through virtual computer aided rendering and rapid prototyping o What will it cost to produce it? • Testing the Concept may involve asking a number of prospective customers to evaluate the idea 4. Business Analysis Estimate likely selling price based upon competition and customer feedback • Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation • Estimate profitability and break-even point 5. Beta Testing and Market Testing Produce a physical prototype or mock-up • Test the product (and its packaging) in typical usage situations • Conduct focus group customer interviews or introduce at trade show • Make adjustments where necessary • Produce an initial run of the product and sell it in a test market area to determine customer acceptance 6. Product Development 7. Market Strategy 8.Commercialization (often considered post-NPD) 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 Role of marketing research (MR) The task of marketing research (MR) is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment. Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers. Importance of Innovation Management Innovation has a clear impact on competitiveness. Innovative organizations have higher profit margins and are protected from cyclical downturns because the innovative features of their products and services tend to increase the retention of customers that would otherwise go for a lower cost substitute. The importance of innovation management is often less clear, however. Innovation is seen as a matter of inspiration and not something that can be scheduled. The spark of innovation can fizzle in a suffocating environment or can ignite a new industry if you know how to handle it. Encourage Innovators o Innovation management schemes encourage workers, allowing them to articulate challenges and new ideas. By giving them a forum for expression, you foster creativity in your organization. However, you may be surprised by the sheer number of ideas you receive, so you will need clear knowledge management mechanisms to capture and evaluate those innovative ideas. Translate Ideas Into Results o An innovation management program provides a procedure for selecting those ideas with more potential to improve your bottom line and gives you the mechanisms for translating those ideas into results. This process will feed the creative culture of your organization, strengthen it, and demonstrate that management is willing and able to bring ideas to fruition. o Sponsored Links Job Openings Philippines Start Your Career Today Check Out The Job Openings Here! Market Your Innovations Properly o Sometimes an innovation is perceived as an improvement on a previous product and will be readily accepted by consumers. Some radical and disruptive innovations, however, call for new ways of thinking from you and your customers. It will require new ways of thinking from your competitors, too, and if you know how to make the most of your disruptive innovation you will leave them behind before they have time to adapt. Measure and Improve o You cannot consistently improve what you cannot measure. An innovation management program provides you with the metrics you need to control what in principle may have appeared to be unpredictable acts of inspiration. For instance, you can measure your research and development investment, the proportion of your sales and profits that come from recently developed products, or the number of patents produced by your organization.
Posted on: Sat, 08 Mar 2014 05:51:18 +0000
Trending Topics
Recently Viewed Topics
© 2015