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Product Creation and Development

The document discusses product creation and development. It outlines 4 major categories of product development: new to the company, improvement of existing products, extension of existing product lines, and new to the market. It then describes the phases of product creation and development including idea generation, feasibility analysis, product specifications, process specifications, prototype development, design review, market testing, product introduction, and follow-up evaluation. Finally, it discusses strategies for new product development and characteristics used to measure the success of product development efforts.

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224 views3 pages

Product Creation and Development

The document discusses product creation and development. It outlines 4 major categories of product development: new to the company, improvement of existing products, extension of existing product lines, and new to the market. It then describes the phases of product creation and development including idea generation, feasibility analysis, product specifications, process specifications, prototype development, design review, market testing, product introduction, and follow-up evaluation. Finally, it discusses strategies for new product development and characteristics used to measure the success of product development efforts.

Uploaded by

leizl
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PRODUCT CREATION AND DEVELOPMENT 4 MAJOR CATEGORIES OF PRODUCT

DEVELOPMENT
1. New to the company
Product – is a set of tangible and intangible
attribute, which include packaging, color, price,  is a good or service that is new to the
quality, brand name and manufacturers and retailers company but has been sold by a competitor in
services, all these that buyer accept as a want the past.
satisfaction.
2. Improvement of existing product
Product Creation- the creation of a product that is
needed by a large number of people on the planet to  an enhancement of a product already on the
meet a need or demand. Products are naturally created market.
when there is a need or demand in a particular market
3. Extension to an existing product line
for that product.
 a new product developed as a variation of an
Product Development already existing product.
• may involve modification an existing product, 4. New to the market product
or its presentation, or formation of an entirely
new product that satisfies a newly defined  a good or a service that has not been available
customer want or market niche. to consumers or manufacturers in the past.
• is the set of activities, beginning with the
perception of a market opportunity and ending
in the production, sales and delivery of a PHASES IN PRODUCT CREATION AND
product. DEVELOPMENT
• the overall process of strategy, organization, 1. Idea Generation. Product development begins with
concept generation, product and marketing idea generation. Ideas can come from a variety of
plan creation and evaluation, and sources.
commercialization of a new product.
• Internal Sources:
• The term used to describe the complete process
of bringing a new product or service in the -Employees (Marketing and Research and
market and it’s an ongoing practice in which Development)
the entire organization is looking for
opportunities as new products provide growth • External Sources:
promise to organizations that allow them to -Customers
strengthen their market position. -Suppliers
-Competitors

WHY NEW PRODUCTS?


2. Feasibility Analysis. Entails market analysis
Competition- to maintain or to gain the competitive (demand), economic analysis (development cost and
image in the market. production cost, profit potential), and technical
analysis (capacity requirements and availability, and
Change the consumer needs- to bring the changes the skills needed). Also, it is necessary to answer the
in the consumer needs. question; Does it fit with the mission? It requires
collaboration among marketing, finance, accounting,
Technology- technology that in the favors to develop engineering and operations.
or to take the risk of new product development.
3. Product Specifications. This involves detailed
Good image- company’s good image in the market descriptions of what is needed to meet (or exceed)
(in the mind of customer) to take the risk for the customer wants, and requires collaboration between
development of the product. legal, marketing and operations.
4. Process Specifications. Once product used to measure the performance of product
specifications have been set, attention turns to development effort.
specifications for the process that will be needed to
produce the product. Alternatives must be weighed in 1. Product Quality: Product quality is ultimately
terms of cost, availability of resources, profit potential reflected in market share and the price that customers
and quality. This involves collaboration between are willing to pay.
accounting and operations.
• How good is the product resulting from
5. Prototype Development. With product and the development effort team.
process specifications complete, one (or a few) units are • Does it satisfy customer needs?
made to see if there are any problems with the product • Is it robust and reliable?
or process specifications.

6. Design Review. Make any necessary changes, or 2. Product Cost :Product Cost determines how
abandon. Involves collaboration among marketing, much profit accrues to the firm for particular
finance, engineering, design and operations. sales price.

7. Market Test. A market test is used to determine Capital equipment + Tooling + Incremental cost
the extent of consumer acceptance. If unsuccessful,
return to the design review phase. This phase is 3. Development Time
handled by marketing.
• How quickly did the team complete the
8. Product Introduction. Promote the product. This development effort.
phase is handled by marketing. • It determines how responsive the firm can
be to competitive forces and technological
9. Follow-up evaluation. Determine if changes are development.
needed, and refine forecasts. This phase is handled by
marketing.
4. Development Cost
THREE STRATEGIES TO DEVELOP NEW • It is usually a fraction of investment
PRODUCTS required to achieve profit.

1. Market Pull 5. Development Capability:


 market is the primary basis for determining
• Development capability is an asset the
the products firm should make, with little firm can use to develop products more
regard for existing technology. effectively and economically in the future.
• Future Scope.
2. Technology Push

 technology is the primary determinant of the


products the firm should make with little
regard for the market.

3. Inter Functional View

 products should not only fit the market needs


but to have a technical advantage as well.
Prepared by:

“JoWala Group”
CHARACTERISCTICS OF SUCCESSFUL PRODUCT
DEVELOPMENT Antonette Diaz

Sucessful product development means “Development Rea Juanitas


of a product that can be produced and sold
Lalaine Leizl Ricafranca
profitability. (Very difficult to achieve quickly and
directly) Generally there are five specific dimensions

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