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The New Product Development Process New Products are vital 8 Step New-Product Development Process • • • • • • • • 1. 2. 3. 4. 5. 6. 7. 8. Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Development Business Analysis Product Development Market Testing Commercialization Step 1: Idea Generation • At this stage marketers need to ask: – Is the idea worth considering? • If yes, proceed to idea screening. • If no, drop. • Ideas for new products can come from: – Customers and channel members – Scientists and engineers – By examining competitors – Top management Step 2: Idea Screening • At this stage marketers need to ask: – Is the product idea compatible with company objectives, strategies, and resources? • If yes, proceed to Concept Development and Testing. • If no, drop. Step 3: Concept Development and Testing • At this stage marketers need to ask: – Can we find a good concept consumers say they would try it? • If yes, proceed to Marketing Strategy Development. • If no, drop. • Example of Concept Development/Testing – Regarding a concept of new shower enclosures coated with Teflon, a marketer asks consumers: • Would this type of shower enclosure solve a cleaning problem for you? Step 4: Marketing Strategy Development • At this stage marketers need to ask: – Can we find a cost-effective, affordable marketing strategy? • If yes, proceed to Business Analysis. • If no, drop. Step 5: Business Analysis • At this stage marketers need to ask: – Will this product meet our profit goal? • If yes, proceed to Product Development. • If no, drop Step 6: Product Development • At this stage marketers need to ask: – Have we got a technically and commercially sound product? • If yes, proceed to Market Testing. • If no, drop. • Example of Product Development Stage – A new-product development department is excited about a new product idea for a suntan lotion that goes on blue, but fades away as the ability of the lotion to protect skin disappears. – Projected sales, growth, and profit looks promising. – The idea has been passed to R&D to determine if the product could be feasibly made. Step 7: Market Testing • At this stage marketers need to ask: – Have product sales met expectations? • If yes, proceed to Commercialization • If no, send the idea back for product development. • Examples of Consumer-Goods Market Testing – Sales-Wave Research • Consumers initially try the product at no cost then are reoffered the product, or a competitors’ product at a slightly reduced price. – Simulated Test Marketing – lab store – Controlled Test Marketing • Panel of stores carry new product for a fee. Step 8: Commercialization • At this stage marketers need to ask: – Are product sales meeting expectations? • If yes, make future plans. • If no, modify the product or marketing program or drop. • This is the most expensive step of the new product development process. Sources • Knowthis.com (2011). New Product Development Process. Retrieved May 19, 2011, from http://www.knowthis.com/principles-of-marketingtutorials/managing-products/new-productdevelopment-process/. • Kotler, P. and Keller, K.L. (2016). Marketing Management (15th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. • Richardson, P. (2011, February, 16). Dilbert New Product. Retrieved May 19, 2011 from http://www.witiger.com/marketing/dilbertnewproduct SM.jpg.