MOS 2320 Chapters 10, 11, 12 Full Notes

29 Pages

Management and Organizational Studies
Course Code
Management and Organizational Studies 2320A/B
Kevin Thompson

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New Product Development4172013 34300 PM New Product can be developed in two waysAcquisitionby buying a whole company a patent or a license to produce someone elses productFirms own new product development effortsNew product meaning original products product improvements product modifications and new brands that the firm develops through its own research and development efforts New products important toCustomersbring new solutions and variety to their lives Companiesnew products are a key source of growth Innovation can be very expensive and risky new products face tough oddsWhat can go wrong Poor design incorrect positioning wrong launch time poorly advertised cost of development too high etc NewProduct Development Process 8 Steps1 Idea Generation Purpose is to create a large number of ideas The systematic search for new product ideasGet ideas from wide range of different people o Internalthrough formal research and development Ie RD and employeeso Externalthrough outside sources Ie Suppliers can tell about new material available distributors close to market and can pass along information competitors watch competition to get clues via new products customers give feedback and reviews helpful to generate new ideas 2 Idea Screening Purpose is to reduce number of ideas Help spot poor ideas and drop them as soon as possible Many companies require their executives to write up new product ideas in a standard format that can be reviewed by a new product committee This write up describes the product or service the proposed customer value target market and competition and makes some rough data estimates of financial data Some evaluate criteria based on RWW real win worth it 3 Concept Development and Testing An attractive idea must be developed into a product concept A product idea an idea for a possible product that the company can see itself offering to the market product concept detailed version of the idea stated in meaningful consumer terms product image the way consumers perceive an actual or potential product Concept DevelopmentBased on an idea a product concept is made to further elaborate stated in meaningful consumer terms Exp May have a prototype that is super expensive and sleek but may create other concepts with that prototype one for families one for children etc Concept Testingcalls for texting new product concepts with groups of target consumers May be presented physically or symbolically Find out if concepts have strong customer appeal4 Marketing Strategy Development Choose which concept is best Next step is marketing strategy development Designing and initial marketing strategy for introducing this car to the market Consists of three partso Target market the planned value proposition and the sales market share and profit goals for the first few years o Products planned price distribution and marketing budget for the first year o The planned long run sales profit goals and marketing mix strategy5 Business Analysis Once management has decided on its product concept and marketing strategy it can evaluate the business attractiveness of the proposal Involves a review of the sales costs and profit projections for a new product to find out whether they satisfy the companies objectives To estimate these things they may look at past history of similar products The company then uses these sales and cost figures to analyze the new products financial attractiveness6 Product Development As of now the product may have only been in a word description or drawing Developing the product concept into physical product to ensure that the product idea can be turned into a workable market offering RD or engineering develops the product into a physical thing Often products go under rigorous testing to make sure they perform properly Companies can do own or use external sources to test Must have the required functional features and also convey the intended psychological characteristics
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