NEW   PRODUCT DEVELOPMENT

see also BCS 555 assignment based on this unit
 witiger.com/senecacollege/BCS555/assignment555homework1.htm

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.	This page used in the following courses taught by Prof. Richardson . CCT 322 BUS 106 BCS 555 MRK 106

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New Product Development Process

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Five steps in the New Product Development Process, as understood by most marketing textbooks 1. Idea Generation  brainstorming - thinking about it  creating a new product based on some observed need thinking of a new product based on some accident or chance circumstance 2. Screening  getting opinions from  employees potential customers media government what are the weaknesses of existing products that are similar is there any competition for a new product What are the industry sales and market trends the product idea is based on 3. Idea Evaluation / Concept Development  estimate costs, revenue, profit,  do market research  target market segmentation describe the main group of people who will be the first customers 4. Development of Product / Business Analysis physically design and manufacture the product  estimate likely selling price based upon competition and customer feedback estimate sales volume based upon size of market  produce a physical prototype or mock-up test the product (and its packaging) in typical usage situations 5. Commercialization  "make enough to sell"  manufacture a large amount to send out to the stores that will stock the items so enough inventory on hand for the public to buy  launch "promotion campaign"

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While the Dilbert cartoon is funny, it represents the challenge that companies always have coming up with new products

• people like using the old product - especially software products that take some time to learn
• people don't like the expense of a new product
• people don't like it when parts or tech support is not available for an old product so they resent companies always churning out new products
• best example in 2010 is people not liking Windows 7 and wanting to continue using Windows Vista, or the older Windows XP
• people want to wait until the new product has been on the market for some time so they can evaluate whether it is useful to switch or not
• one of the prime reasons companies feel compelled to come out with new models is because of the competitive environment - their competition will see what is selling, and make a new version with better features, so the original manufacturer has to come up with a "new and improved" model or customers will switch to the competition

Shapiro book, 10th edition Chpt 7 page 209

also Chapter 10 of the MRK 106 text

and Chpt 4 of the BUS 106 Text

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1. Idea  Generation

Five steps in the New Product Development Process 1. Idea Generation - thinking about a new product or service sources of where new ideas come from (see also  www.witiger.com/internationalbusiness/countryinfo.htm )  employees feedback from sales staff who get comments from customers direct feedback from customers news stories government agencies new regulations established may require some innovations industry associations consumer surveys competitors see  www.witiger.com/ecommerce/competitorintelligence.htm  accident and chance Reese's Peanut Butter Commercial  youtube.com/watch?v=DJLDF6qZUX0

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2. Screening

Five steps in the New Product Development Process 2. Screening - obtaining opinions from potential users sources of where you can obtain opinions employees  do they think the new product will sell can they see themselves being able to sell the product compared ti the existing product line-up customers can be done with a survey, formal or informal "what do you think if we came out with this..." customer opinion may help you tweak features of a new product, eg. colour, shape, size, pricing media newspaper stories may discuss a similar product being launched in another part of the world and the initial feedback may help you decide how to develop your product newspaper stories may discuss deficiences in existing products which may suggest new opportunities online blogs may discuss cuistomers disastisfaction with a certain product, which may provide ideas to inventors or a new product or service government agencies rules and regulations may have some limitations on what your new product can do governments can enact new laws making changes to the way people use a product, which provides opportunity when new law created banning cell phones while driving, many companies rushed to sell bluetooth devices for "handsfree" calling some government agebncies can tell you if a new product is complient with pollution controls, or language laws or labelling rules

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New Product Development and the Net Chpt 8 in Hanson

New Product Development - physical products - cyber products Internet Time Two important apsects, says Prof. Ward Hanson in his book First - it refers to the rapid change and evolution of internet tools,  markeplace (the customers)  business practices Second - it is also the acceleration of  new product development,  competitve activity  and business tactics that are made possible by the internet

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New Product Development Process Chpt 7 p. 209

How New Product Characteristics affect adoption, as explained in the Shapiro book, 10th edition Chpt 7 page 214 1. Relative Advantage - the Competitive Environment ... better price than competition ... better features than competition 2. Compatibility - does it fit with what the consumers want to do 3. Complexity - is it easy to use - adoption resistance must be comparably low 4. Trialability - you have to get people to sample it 5. Observability - can you actually see it work - is it obvious it is effective and saves time and money

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