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New Product Development Strategy

New Product Development Strategy. WHY DEVELOP NEW PRODUCTS?. In 1982 Timex turned down the opportunity to market "Swatches". Timex was resting on its laurels, simple low cost watches. Digitalisation revolutionized industry while Timex stuck with analog.

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New Product Development Strategy

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  1. New Product Development Strategy

  2. WHY DEVELOP NEW PRODUCTS? In 1982 Timex turned down the opportunity to market "Swatches". Timex was resting on its laurels, simple low cost watches. Digitalisation revolutionized industry while Timex stuck with analog. DID NOT KEEP UP WITH WATCHES EVOLUTION FROM A FUNCTIONAL OBJECT TO A FASHION ACCESSORY. Today Global consumer owns 5 watches up from 1.5 watches 30 years ago. Move from chronometer to fashion accessory Timex then acquired Guess and Monet Jewellers

  3. Why New Products Fail? • Lack of differentiating advantage – RASna JUc FIT, HLL Ayush • Poor marketing plan – Yamaha RX -100, Real Value Vaccumiser, Appy, Evita, Appy, HLL Max Biscuit • Target market too small – Viruddh, Livon • Poor product quality – Annapoorna RTEC, Dandi Namak, Real Juice

  4. New Product – Value Proposition Value Proposition = Perceived Differential Advantage

  5. Consumer Buying Process Need Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Behavior

  6. Successive Sets Involved in Customer Decision Making Total Set Awareness Set Consideration Set Choice Set Decision Philips LG Samsung Sansui Onida Videocon Sony BPL Hitachi Akai National Aiwa LG Samsung Sansui Onida Videocon Sony BPL Akai Aiwa LG Samsung Sansui Onida Videocon Aiwa Sansui Onida Videocon ? FISHBEIN MULTI-ATTRIBUTE MODEL FOR BUYING

  7. Differentiation Variable- Product After-sales Warranty Features Style Design Packaging Branding Installation Training Credit Delivery

  8. New Product Development Six categories of new products • New-to-the-world products • New product lines • Additions to existing product lines • Improvements and revisions of existing products • Repositioning • Cost reductions

  9. NEW PRODUCTS - TYPES OF INNOVATION A new product can be: • Continuous Innovation. • Dynamic Continuous Innovation • Discontinuous Innovation

  10. NEW PRODUCT DEVELOPMENT PROCESS Idea Generation Caution : Go Error / Drop Error Idea Screening Concept Development Category concept / Brand Concept Concept Testing Marketing Strategy Business Analysis Product Development • How many test cities? Which cities? • Length of test? • What information? • What action to take? Market Testing Commercialisation When / Where / Whom / How ?

  11. Product-Idea Rating Device

  12. New Product –Innovation Diffusion Awareness Interest Trial Evaluation Adoption

  13. New Product Adoption RATE OF ADOPTION AFFECTED BY • Relative advantage • Compatibility • Complexity • Divisibility • Communicability

  14. New Product Adoption ADOPTER CATEGORIES

  15. The Product Life Cycle A life cycle plots sales of an offering or a product class over a period of time. • There are FOUR main stages: • Introduction • Growth • Maturity (Saturation) • Decline

  16. Sales Sales Profits Introduction Growth Maturity Decline The Product Life Cycle

  17. LIFECYCLESTRATEGIES

  18. The Product Life Cycle • Product hierarchy • Need family • Product family • Product class • Product line • Product type • Item

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