lessons from failed products
TRANSCRIPT
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NEW PRODUCT DEVELOPMENT: LESSONS FROM FAILED PRODUCT
Presented byDHA ZODAPENISHESH KUNTALNIKHIL SHIRSATVAIBHAV SAXENAAPOORV SONI
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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
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NDP PROCESS
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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.
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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
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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
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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’.
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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.
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•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.
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PRODUCTS
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PEPSI ATOM
• Me too
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ME TOO PRODUCT
• Similar packaging as compared to Thums Up• Similar positioning as Thums Up• No cult following as Thumps Up
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COLGATE ENTREES
• Disastrous Brand extensions
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DISASTROUS BRAND EXTENSION• People don’t really associate Colgate with taste• Shouldn’t have used Colgate branding
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APPLE NEWTON
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BACK TO THE FUTURE
• Launched ahead of its time• Too Overpriced ($700-$1000)• Depended on a Gimmick
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CRYSTAL PEPSI
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POD
• Lacked features that customers associated with Cola
• Brown color, and Caffeine
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TATA NANO
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POSITIONING FAILURE AMONG OTHERS• ‘Cheapest Car’ tag• Couldn’t commit to promised price• Safety concerns
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NEW COKE
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FAULTY PRODUCT TESTING
• Focus groups liked New Coke• Customers petitioned hard for Original Coke• New coke was stopped
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WINDOWS VISTA
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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
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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.
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• 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.
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• 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.
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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
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Thank YOU