NPD can refer to innovative variation of an existing product

• Importance of NPD

Risky to launch new products but even more risky failing to introduce new products i.e Timex’s failure to introduce new produces in the 80’s led to drastic fall in market share.

- Sustain company

- Growth

The 7 phases of NPD: (ISCB PTC)

1) Idea generation

2) Screening ideas

3) Concept testing

4) Business analysis

5) Product development

6) Test marketing

7) Commercialisation

1. Idea generation- process by which organisations seek product ideas that will help them achieve objectives

Internal vs. external sources: internal→ employees and departments

External→ competitors, advertising agencies, mgt consultants, customers, potential buyers through strategic alliance

2. Screening ideas

This is where organisation sees if ideas align with organisational objectives and resources. Then choosing best ideas for further review whilst rejecting majority of ideas.

3. Concept testing

Here a small sample of potential buyers are presented with a product idea ( focus groups) and potential buyers’ attitudes and initial buying intentions are determined.

- concept testing is very useful tool and is inexpensive. It allows organisations to determines customers’ initial reactions towards a new idea.

- Also allows personnel to understand which product attributes are more important

4. Business Analysis

During business analysis stage of NPD, a company evaluates a product idea to determine its potential contribution to sales, costs and profits.

During this stage the company seeks maximum information and questions are asked regarding:

- what environmental changes are likely to occur and how will these affect new product?

- Is demand adequate and will it endure?

- Will new product benefit existing portfolio of products?

- Is there any chance it will cannibalise existing products?

5. Product development

Here the organisation determines if it is...