90 to the respondents at this stage the company has

Info icon This preview shows pages 92–94. Sign up to view the full content.

View Full Document Right Arrow Icon
90 to the respondents at this stage, the company has to make very elaborate and definite statements about the product, its attributes and benefits. Much of the vagueness associated with a new product idea may get thrashed out at the concept testing stage. BUSINESS ANALYSIS This stage is crucial in the total process of new product development because several vital decisions regarding the project are taken based on the analysis done at this stage. This stage will decide whether from the financial and marketing point of view, the project is worth proceeding with. Investment analysis and profitability analysis of the project under different assumption are made at this stage. The project’s overall impact on the corporation’s financial position with and without the new product are estimated and compared. The financial estimates would be reliable only if they are based on a fairly accurate demand forecast and related market factors. The marketing experts by now should have undertaken detailed exercises on the marketability of the product. The purpose of this stage is to project the future sales, profits, and rate of return for the proposed new product, and to determine whether these meet the company’s objectives. If they do, the company will develop the new product. Business analysis is done not only at this stage but throughout the development process as new information is accumulated about the product and the market. PRODUCT DEVELOPMENT Product ideas appearing sound from a business point of view can now be turned over to the research and development department. This is an important step in at least three ways. It makes the first attempt to develop the product in a “concrete” form. Upto now, it has existed only as idea, or perhaps as a drawing, or a very crude mock-up. Second, it represents a very large investment, which is likely to dwarf the idea-evaluation costs incurred in the earlier stages. Much time and money go into trying to develop a technically feasible product. And finally, it provides an answer as to whether the product idea can be translated into a technically and commercially feasible product. If not, the company’s investment up to now is lost except for any by-product information gained in the process. Three steps are involved in the product development stage; prototype development and consumer testing, branding and packaging. The first task is for the research and development department to build a physical prototype that realizes the attributes specified in the product concept and is trouble-free and economical to manufacture. Consumer testing goes hand in hand with prototype development. Various methods have been proposed for the testing of consumer preference among a set of prototype alternatives, such as paired comparison, multiple choice, and ranking procedures. Consumers are normally asked to sample the alternative products in a laboratory or home setting, and the testing organization exercises the normal controls to avoid based results. The Annamalai University
Image of page 92

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
91
Image of page 93
Image of page 94
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern