PRODUCT DEVELOPMENT

INTRODUCTIONIn the present day environment, product development is a continuous function of marketing management. The life of the firm is closely related to the development of new product through technological innovations. In a dynamic and competitive market environment, continuous development and introduction of new products is the key to survival and growth of the companies.

MEANING

Product development is the process of finding out the possibility of producing a product keeping in view the customers’ needs and wants. It includes the decision as to whether it would be feasible or not to produce the product and whether it would be profitable or not for the enterprise to do so. It also includes modification of existing products and elimination of unprofitable products.

DEFINITION

“Product development involves the adding, dropping and modification of item specifications in the product line for a given period of time, usually one year.”

lipson and Darling

IMPORTANCE OF PRODUCT DEVELOPMENT

ENCOURAGEMENT OF

INDUSTRIA

L STABILITY

CONSUMERS’

SATISFACTION

INCREASE IN PROFITS

PRINCIPLES OF PRODUCT DEVELOPMENT

PRINCIPLE OF STANDARDISATI

ON

PRINCIPLE OF SIMPLIFICATIO

N

PRINCIPLE OF SPECIALISATIO

N

ELEMENTS OF PRODUCT DEVELOPMENT

Product Development Process

Product Improvement

Packing Improvement

PRODUCT DEVELOPMENT PROCESS

1 •GENERATION OF IDEAS

2 •SCREENING OF IDEAS

3 •BUSINESS ANALYSIS

4 •PRODUCT DEVELOPMENT

5 •TEST MARKETING

6 •COMMERCIALISATION OF THE PRODUCT

PRODUCT IMPROVEMENT

Means the changes brought into the qualities, variety, shape and size of the product. It includes quality improvement, type improvement, style improvement, fashion design improvement, packing improvement etc

PACKING IMPROVEMENT

Packing improvement is an important factor of product development. Packing may be defined as the general group of activities in product planning which is value designing and producing the container or wrapper for a product.

TEST MARKETING

Test marketing implies the production of same production small quantities in the initial stage and later on sending those products in some selected markets to find out the limits to which those products have been preferred by the consumers. Reasons for Test marketing are

To know the

reaction of

consumers

To know defects

and alternativ

es

LIMITATIONS

Knowledge of competitive firms Away from the reach of small firm Results are not fully reliable Not possible for many products

REASONS FOR THE FAILURE OF NEW PRODUCTS

DEFECTIVE PRODUCTS

PRICE

INADEQUATE MARKET ANALYSIS

FAST COMPETITIONINSUFFICENT MARKETING EFFORTS

WEAKNESS OF SALES FORCE

TIME

SCOPE OF PRODUCT PLANNING & DEVELOPMENT

PRODUCTDECISION

DESIGN AND SIZE OF THE PRODUCT

NAME OF THE PRODUCT

COLOUR OF THE PRODUCT

PRICE OF THE PRODUCT

BRAND, PACKAGE, LABEL

GURANTEE & AFTER SALE

SERVICE

NEW USES OF THE PRODUCT

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