New Product Development- Part 1

NEW PRODUCT DEVELOPMENT

Maruf Mahfuz 

Operations officer

H.R Textile Mills Limited, Pride Group.

Cell no: 01738676060 

Email: maruf.txt@gmail.com

In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.

New Product Development Process .

Introducing new products on a consistent basis is important to the future success of many organizations, marketers in charge of product decisions often follow set procedures for bringing products to market. In the scientific area that may mean the establishment of ongoing laboratory research programs for discovering new products (e.g., medicines) while less scientific companies may pull together resources for product development on a less structured time-table.

In this section we present a 7-step process comprising the key elements of new product development. While some companies may not follow a deliberate step-by-step approach, the steps are useful in showing the information input and decision making that must be done in order to successfully develop new products. The process also shows the importance market research plays in developing products.

We should note that while the 7-step process works for most industries, it is less effective in developing radically new products. The main reason lies in the inability of the target market to provide sufficient feedback on advanced product concepts since they often find it difficult to understand radically different ideas. So while many of these steps are used to research breakthrough ideas, the marketer should exercise caution when interpreting the results. 

Process of new product development

Idea Generation► Idea screening ►Concept Development & Testing ►Marketing Strategy ►Business analysis ►Product Development ►Test marketing ►Commercialization.

Our selected Product :

Name: Kolaveri D
Type : (Ladies Dress).
Target Customer: Young ladies (age between16-25).
Target Area: Dhaka & Divisional city. 

Idea Generation

First of all we have taken a lot of idea by the determination of public response from the various classes of people. Then we are gone for our natural process of new product development. We have gathered a lot of idea such as-

- Chikni chameli (Ladies dress - Lehanga).

-Body Tex (Mens wear Like Ankhon suit).
-Kolaveri D (Ladies dress like a Gown in lower part, upper part with a Hoody top made by jeans fabric).
-Kuhelika (Teenage tops)
-Rimjhim (Upper part like frock and lower part like saree).

Idea Generation is often called the "fuzzy front end" of the NPD process. Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features. Regarding to this process we have done a SWOT analysis to find out our desired idea by researching from our Human resource development.
Lots of ideas are being generated about the new product. Out of these ideas many ideas are being implemented. The ideas use to generate in many forms and their generating places are also various. Many reasons are responsible for generation of an idea.
Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your opportunity analysis to support your ideas in the Idea Screening Phase (shown in the next development step). 

The first step of new product development requires gathering ideas to be evaluated as potential product options. For many companies idea generation is an ongoing process with contributions from inside and outside the organization. Many market research techniques are used to encourage ideas including: running focus groups with consumers, channel members, and the company’s sales force; encouraging customer comments and suggestions via toll-free telephone numbers and website forms; and gaining insight on competitive product developments through secondary data sources. One important research technique used to generate ideas is brainstorming where open-minded, creative thinkers from inside and outside the company gather and share ideas. The dynamic nature of group members floating ideas, where one idea often sparks another idea, can yield a wide range of possible products that can be further pursue. 

Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them.
The screeners should ask several questions:

• Will the customer in the target market benefit from the product? 

• What is the size and growth forecasts of the market segment/target market? 

• What is the current or expected competitive pressure for the product idea? 

•  What are the industry sales and market trends the product idea is based on? 

•  Is it technically feasible to manufacture the product? 

• Will the product be profitable when manufactured and delivered to the customer at the target price? 

By analyzing the above question we have decided to choose the product called “Kolaveri D”.

Depending on the number of ideas, screening may be done in rounds with the first round involving company executives judging the feasibility of ideas while successive rounds may utilize more advanced research techniques. As the ideas are whittled down to a few attractive options, rough estimates are made of an idea’s potential in terms of sales, production costs, profit potential, and competitors’ response if the product is introduced.

Concept Development and Testing

Here we have to make a physical or practical body of the concept on the basis of following points.
Develop the marketing and engineering details. Investigate intellectual property issues and search patent data bases.

• Who is the target market and who is the decision maker in the purchasing process? 

• What product features must the product incorporate? 

• What benefits will the product provide? 

• How will consumers react to the product? 

• How will the product be produced most cost effectively? 

• Prove feasibility through virtual computer aided rendering, and rapid prototyping 

• What will it cost to produce it? 

Testing the Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modeling. With a few ideas in hand the marketer now attempts to obtain initial feedback from customers, distributors and its own employees. Generally, focus groups are convened where the ideas are presented to a group, often in the form of concept board presentations (i.e., storyboards) and not in actual working form. For instance, customers may be shown a concept board displaying drawings of a product idea or even an advertisement featuring the product. In some cases focus groups are exposed to a mock-up of the ideas, which is a physical but generally non-functional version of product idea. During focus groups with customers the marketer seeks information that may include: likes and dislike of the concept; level of interest in purchasing the product; frequency of purchase (used to help forecast demand); and price points to determine how much customers are willing to spend to acquire the product. By creating the concept of new product we have able to make a physical body of the product.

 Business Analysis

•  Estimate likely selling price based upon competition and customer feedback

•  Estimate sales volume based upon size of market and such tools as the Fourt- Woodlock equation

We determine the profit at the last so the company took the decision to go to the next step of the product development.

Product & marketing mix development 

Ideas passing through business analysis are given serious consideration for development. Companies direct their research and development teams to construct an initial design or prototype of the idea. Marketers also begin to construct a marketing plan for the product. Once the prototype is ready the marketer seeks customer input. However, unlike the concept testing stage where customers were only exposed to the idea, in this step the customer gets to experience the real product as well as other aspects of the marketing mix, such as advertising, pricing, and distribution options (e.g., retail store, direct from company, etc.). Favorable customer reaction helps solidify the marketer’s decision to introduce the product and also provides other valuable information such as estimated purchase rates and understanding how the product will be used by the customer. Reaction that is less favorable may suggest the need for adjustments to elements of the marketing mix. Once these are made the marketer may again have the customer test the product. 

In addition to gaining customer feedback, this step is used to gauge the feasibility of large-scale, cost effective production for manufactured products.

Estimate profitability and break-even point. At this point in the new product development process the marketer has reduced a potentially large number of ideas down to one or two options. Now in Step 4 the process becomes very dependent on market research as efforts are made to analyze the viability of the product ideas. (Note, in many cases the product has not been produced and still remains only an idea.) The key objective at this stage is to obtain useful forecasts of market size (e.g., overall demand), operational costs (e.g., production costs) and financial projections (e.g., sales and profits). Additionally, the organization must determine if the product will fit within the company’s overall mission and strategy. Much effort is directed at both internal research, such as discussions with production and purchasing personnel, and external marketing research, such as customer and distributor surveys, secondary research, and competitor analysis. Here we have analyzed about the price, profit.

Marketing mix indicates 4ps such as here we have to consider about the product, place, price & promotion. Either the marketing Mix is Successful or not it is depends upon here. We have to determine the manufacturing cost of the dress, we have to develop the product, have to select the appropriate market & ensure the product promotion very much.

Beta Testing and Market Testing 

• Produce a physical prototype or mock-up

• Test the product (and its packaging) in typical usage situations

• Conduct focus group customer interviews or introduce at trade show

• Make adjustments where necessary

• In the market testing we have to test the product by some distinguish marketing policy.

• By doing this test we come to know about the market response of the product.

• In this case for our product we have to give our product to the fashion house for beta testing.

Produce an initial run of the product and sell it in a test market area to determine customer acceptance Products surviving to Step 6 are ready to be tested as real products. In some cases the marketer accepts what was learned from concept testing and skips over market testing to launch the idea as a fully marketed product. But other companies may seek more input from a larger group before moving to commercialization. The most common type of market testing makes the product available to a selective small segment of the target market (e.g., one city), which is exposed to the full marketing effort as they would be to any product they could purchase. In some cases, especially with consumer products sold at retail stores, the marketer must work hard to get the product into the test market by convincing distributors to agree to purchase and place the product on their store shelves. In more controlled test markets distributors may be paid a fee if they agree to place the product on their shelves to allow for testing. Another form of market testing found with consumer products is even more controlled with customers recruited to a “laboratory” store where they are given shopping instructions. Product interest can then be measured based on customer’s shopping response. Finally, there are several high-tech approaches to market testing including virtual reality and computer simulations. With virtual reality testing customers are exposed to a computer-projected environment, such as a store, and are asked to locate and select products. With computer simulations customers may not be directly involved at all. Instead certain variables are entered into a sophisticated computer program and estimates of a target market’s response are calculated.

Commercialization (often considered post-NPD)

For commercializing our product, as it is a dress product so, it needs to introduce in the market, first of all and then nee to be the lot of advertising for promotion of the products. Some fashion show may be arranged to introduce the product to the target customer.

•  Launch the product

• Produce and place advertisements and other promotions

• Fill the distribution pipeline with product

Critical path analysis is most useful at this stage If market testing displays promising results the product is ready to be introduced to a wider market. Some firms introduce or roll-out the product in waves with parts of the market receiving the product on different schedules. This allows the company to ramp up production in a more controlled way and to fine tune the marketing mix as the product is distributed to new areas.