NEW PRODUCT DEVELOPMENT: LESSONS FROM FAILED PRODUCT

Presented byDHA ZODAPENISHESH KUNTALNIKHIL SHIRSATVAIBHAV SAXENAAPOORV SONI

NEW PRODUCT DEVELOPMENT‘New Product Development’ (N.P.D.) is the

development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.

Why New Product Development (N.P.D.) ? To maintain and build sales through replacement products To shape the company’s future To fulfil the ever changing customer preferences

NDP PROCESS

When N.P.D.?Once a company has Segmented market carefully. Chosen its target customer group. Identified their needs / preferences /

requirements. Determined the appropriate mix of 4P’s for

that market.Then, it is ready to develop / launch

suitable new product.Marketing actively interacts with other departments (such as R & D) for product development.

Idea GenerationNew idea generation is the systematic

search for new product ideasSources of new-product ideas• Internal • ExternalIdea ScreeningIdea screening refers to reviewing new-

product ideas in order to drop poor ones as soon as possible

Concept Development and TestingProduct idea is an idea for a possible product that the company can see

itself offering to the marketProduct concept is a detailed version of the idea stated in meaningful

consumer termsProduct image is the way consumers perceive an actual or potential

productMarketing Strategy Development

Marketing strategy development refers to the initial marketing strategy for introducing the product to the market

Marketing Strategy Development• Part 1:

• Description of the target market• Product positioning, sales, market share, and profit goals

• Part 2:• Price, distribution, and budget

• Part 3:• Long-term sales, profit goals, and marketing mix strategy

Business AnalysisAfter management develops the product concept and marketing strategy, the company will not evaluate the proposal’s business attractiveness. This is known as ‘Business Analysis’.

Product developmentproduct development is an innovative development approach that

collects, reviews, evaluates, and manages new-product ideas• Creates an innovation-oriented culture• Yields a large number of new-product ideas

Market testingObjectives of market testing could be:

a) Test product in actual market setting.b) Learn about actual market size.c) Learn about how consumers/dealers handle, use, repurchase

new product.

•CommercializationAfter successful market testing, new product comes to commercialisation stage. During this stage, production of new product on a commercial basis is rapidly built up. For new food products, marketing expenditures typically represent 57 percent of first-year sales.

PRODUCTS

PEPSI ATOM

• Me too

ME TOO PRODUCT

• Similar packaging as compared to Thums Up• Similar positioning as Thums Up• No cult following as Thumps Up

COLGATE ENTREES

• Disastrous Brand extensions

DISASTROUS BRAND EXTENSION• People don’t really associate Colgate with taste• Shouldn’t have used Colgate branding

APPLE NEWTON

BACK TO THE FUTURE

• Launched ahead of its time• Too Overpriced ($700-$1000)• Depended on a Gimmick

CRYSTAL PEPSI

POD

• Lacked features that customers associated with Cola

• Brown color, and Caffeine

TATA NANO

POSITIONING FAILURE AMONG OTHERS• ‘Cheapest Car’ tag• Couldn’t commit to promised price• Safety concerns

NEW COKE

FAULTY PRODUCT TESTING

• Focus groups liked New Coke• Customers petitioned hard for Original Coke• New coke was stopped

WINDOWS VISTA

NOT COMPATIBLE WITH OLD HARDWARE• Needed to upgrade computers to run Vista• People paid to downgrade to Windows XP• Dell started offering Windows Xp instead of

Vista

LESSON FROM FAILED PRODUCT

• 1st Lesson:- SPECIALIZE IN A SPECIFIC TARGET GROUP, NOT JUST “EVERYBODY"

The more specific you are about your users, the more likely you will meet people who will actually become your users!

• 2nd Lesson:-IT’S BETTER TO RULE 50% OF A SMALL MARKET THAN 0.5% OF A HUGE MARKET

It is not about how big your market is today, but how big it can grow.

• 3rd Lesson:-NEVER JUST ASSUME ANYTHING When you come with a hypothesis, you need to validate it,and prove that it’s right

• 4th Lesson :-REFRAIN FROM HAVING A STATIC PRODUCT

Have a team that is technically capable, dynamic, and remove features as you need them fairly quickly.

• 5th Lesson:-HAVE A SOLID BUSINESS MODEL FROM DAY 1

You’re not doing this for fun, or for prestige, you’re looking to make a return.

Reasons for new product failure

• Overestimation of market size• Poor design• Incorrect positioning• Wrong timing• Priced too high• Ineffective promotion• Management influence• High development costs• Competition

Thank YOU