Accounting technicians scheme west africa
C.6.3 What is anew product
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- C.6.4 New Product Development
- C.6.5 Stages in New Product Development
| C.6.3 What is anew product A new product is a product which is innovative, unique, a replacement, which is significantly different from existing ones in terms of physical appearance, packaging, style and quality, etc. New products help an organisation to increase its market share by taking advantage of market opportunities and attracting customers not previously covered by its products. C.6.4 New Product Development One of the most prominent features of the market economy is the periodic introduction of new products into the market. New product development is the development of original products, product improvements, product modifications, and new brands through the firm’s own RD efforts. New products are introduced by organisations to exploit opportunities arising from changes in consumer demand, taste, styles and fashions. Products may also be introduced as a result of technological inventions and innovations or to replace old products which have declined in sales and profits. C.6.5 Stages in New Product Development A typical new product development process follows six stages ii Define Objectives: Here, objectives of the whole product development process are established - type of products, customer wants and features of the product. Marketing research could help address some of these issues. iii Idea generation and screening: At this stage management looks out for new ideas. The sources of new ideas about anew product include marketing research, competitors, management consultancies and universities and research institutions. Others are brainstorming sessions within the company, trade associations and government agencies. iii) Business Analysis: After the organisation has adopted a particular product idea the next step is to estimate the market potential for the product to evaluate its potential profitability, financial viability, and potential contribution to the firm’s profits. iv) Product Research and Development: At this stage the research and development department of the firm conducts further research and development to convert the product idea into a physical product. A small prototype or model of the product could be developed and tested under laboratory and field conditions to establish if it performs as expected and conforms to original design. If these technical evaluations establish the production feasibility of the product, the firm could move to the test marketing stage. vi Test Marketing This has to do with the process of launching anew product on a limited but at a carefully selected scale to test its commercial viability. Test marketing is very necessary before a firm decides to mass-produce the product or not. Test marketing examines under real market conditions, assumptions made in the previous stages of the development process. If conducted properly, test marketing will help the organisation to test the marketing plan for the new product, and help to make adjustment in design, style and other essential product features, where necessary. 245 vii Commercialisationi: If the test marketing results prove positive, a decision can then betaken to market the product nationally or on a large scale. Download 3.37 Mb. Share with your friends:
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