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Concept of New Product  It is very difficult to give the concept of new product. A product may be new to the

company but not new to the customers or the product may be new to the customers but not to the company.  Booz, Allen and Hamilton identified six categories of new product in of their

newness to the company and to the market place.

1. New to the world:- New products that create an entirely new market. 2. New product lines:- New products that allow a company to enter an established market for the first time. 3. Additions to the existing product lines:- New products that supplement a company’s existing product line. 4. Improvements to existing products:- New products that provide improved performance or greater perceived value and replace existing products. 5. Repositioning:- Existing products that are targeted to new markets or market segments. 6. Cost reductions:- New products that provide similar performance at lower cost.  Moreover, an organization has three sources of new products—

a) Innovation, b) Modification of existing products, c)Acquisition of products from other 1 firms. 

New Product Development Process

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New Product Development Process  1. Idea Generation:- idea generation is a continuous and systematic search for new

product opportunities. It involves delineating sources of new ideas and methods of generating them. This stage is also called opportunity exploration stage. Smaller firms usually depend on employees, customers, investors and channel for new ideas. Methods of generating ideas include brainstorming sessions, focus group interviews, analysis of existing products and survey.  2. Idea Screening:- as ideas emerge, they are checked against the firms new product

goals and long range strategies. Many product concepts are rejected because of poor product fit (dissimilarity to existing product), unavailable technology, lack of company resources and low market potential. Today many companies use checklist for preliminary evaluation. In it, the firm lists the new product attributes considered most important and compare each idea with these attributes.  3. Concept Testing:- Attractive ideas must be refined into testable product concepts. A

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product concept is an elaborated version of idea expressed in the meaningful consumer . A product idea can be turned into several product concepts. After concept development, concept testing is done. Concept testing determines customer attitudes before finally developing the product. Concept testing is a quick and inexpensive way of measuring consumer enthusiasm.

New Product Development Process  4. Marketing Strategy Development:- The planner must now develop a marketing strategy

for introducing the product into the market. The marketing strategy formulation takes place in three parts—  The first part describes the size, structure and behaviour of target market, the planned product positioning and sales, market share and profit goals to be sought in the first few years.  The second part outlines the product’s planned price, distribution strategy and marketing budget for the first year.  The third part describes the long run sales and profit goals and marketing mix strategy over

time.  5. Business Analysis:- Business analysis involves the detailed review and projection of

relevant market factors, revenues, costs and trends for a proposed new product. Business analysis involves analysis in the areas like demand projections, cot projections, competition, required investment and profitability.  Business analysis refines the information developed in idea screening, concept testing and

marketing strategy development and adds new information. Business analysis remains a pencil and paper activity where qualitative evaluations and quantitative analysis both are required. 4

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New Product Development Process  6. Product Development:- After business analysis the product concept moves to the

manufacturing department where it is to be converted into the physical product. In this stage research and development and engineering are heavily involved but marketing management also has a role. R&D and engineering personnel make the pilot models, the prototypes and run laboratory tests, attempting to translate the concept into a workable product. Product development has become faster with the introduction of computer aided design and manufacturing programs.  7. Test Marketing: - If the product es functional tests, the next step is test

marketing. According to Philip Kotler, “Test marketing is the stage at which the product and marketing program are introduced into more realistic market settings.”  Test marketing involves placing a fully developed new product for sale in one or more

selected areas and observing its actual performance under a proposed marketing plan. The purpose is to evaluate the product and pretest marketing efforts in real settings prior to commercialization.  8. Commercialization:- After the successful test marketing of the product, the company

is ready to introduce the product in its target market. It is called as commercialization. With commercialization product enters the introductory stage of the product life cycle.

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Branding  Perhaps the most distinctive skill of professional marketers is their ability to create,

maintain, protect and enhance brands. Marketers say that branding is the art and cornerstone of marketing.  The American Marketing Association defines a brand as, “A brand is a name, term sign,

symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”  In essence, a brand identifies the seller or maker. It can be a name, trademark, logo, or

other symbol. Under trademark law, the seller is granted exclusive rights to the use of brand name in perpetuity. Thus brands differ from other assets such as patents and copyrights, which have expiry dates.  A brand is essentially a seller’s promise to consistently deliver a specific set of features,

benefits and services to the buyers. The best brands convey a warranty of quality to the buyers too. But a brand is even a more complex symbol. A brand can convey up to six levels of meaning– Attributes, Benefits, Values, Culture, Personality and . 6

Branding (contd….)  Brand Name– Brand name is that part of the brand which can be read out. It is

generally a letter or group of letters; a word or group words. A brand name may or may not be a trade name. For example, Coca-Cola is both, the brand name and trade name but Lux and Hamam are brand names only.  Brand Mark– Brand mark is that part of the brand which can be recognized but

can not be read out such as design or symbol or distinctive coloring or lettering. For example, “Maharaja” of Air India.  Trade Mark– Trade mark is a brand name, brand mark or trade character or

combination thereof that is given legal protection. When used, a ed trade mark is followed by R.  Trade Name– A trade name is the name of business, preferably the name of the

organisation itself. A trade name may also be a brand name, but in such a case it serves two purposes. It brings out the identity of the manufacturer and the product. Godrej is both a trade name and brand name for most of their products e.g Godrej 7Soaps, Godrej Locks etc.

Packaging and Labeling  Packaging is that part of product planning in which a company researches,

designs and produces its packages. Packaging should be distinguished with packing. Packing is wrapping a commodity or bundling it in a way suitable for transporting, storing and handling. Packaging is the general group of activities in product planning which involve deg and producing the container or wrapper for a product.  A Package has a functional purpose as a container of a product and does the

protection function. The container serves itself as a silent salesman as well as an effective medium of ment.  Label is the part of the product that carries information about the product and the

seller. A label indicates the product’s brand name, the company logo, ingredients, promotional messages and instructions for use. A label may be the part of the package or it may be the slip attached directly to the product. 8