The New-Product Development Process - The New-Product...

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The New-Product Development Process - the new-product development process for finding and growing new products consists of eight major steps 1. Idea Generation 2. Idea Screening 3. Concept Development and Testing 4. Marketing Strategy 5. Business Analaysis 6. Product Development 7. Test Marketing 8. Commercialization Idea Generation - new-product development starts with idea generation – the systematic search for new-product ideas - major sources of new product ideas include: o internal sources o customers o competitors o distributors, suppliers and others Internal Sources - one study found that more than 55% of all new-product ideas came from within the company, through formal research and development Customers - almost 28% of all new-product ideas come from watching and listening to customers - the company can conduct surveys or focus groups to learn about consumer needs and wants Competitors - about 30% of new-product ideas come from analyzing competitor’s products - companies buy competing new products, take them apart to see how they work, analyze their sales, and decide whether the company should bring out a new product of its own Distributors, Suppliers, and others - resellers are close to the market and can pass along information about consumer problems and new-product possibilities - suppliers can tell the company about new concepts, techniques, and materials that can be used to develop new products Idea Screening - the purpose of screening is to spot good ideas and drop poor ones as soon as possible - most companies require their executives to write up new-product ideas on a standard form that can be reviewed by a new-product committee - the write-up describes the product, the target market, and the competition; it also makes rough estimates of market size, product price, development time and costs, manufacturing costs, and rate of return - the committee then evaluates the idea against a set of general criteria - for example, a committee asks questions such as: o Is the product truly useful to consumers and society? o Is it good for our particular company? o Does it mesh well with the company’s objectives and strategies? o Do we have the people, skills, and resources to make it succeed? o Does it deliver more value to customers than competing products? o Is it easy to advertise and distribute?
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The New-Product Development Process - The New-Product...

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