PRODUCT DEVELOPMENT CHAPTER FOURTEEN

Warm Up You have a great idea for a new brand of sneakers. What are the steps that you need to take to create and launch your new sneaker line?

Your Sneaker Line… Topics of interest: Finding a manufacturer, prototypes, design, color, material, pricing, box, packaging, where to sell, marketing options, market research, test market, models, cost to manufacture, sales projections, sale price, getting distribution…. A lot goes into creating a sneaker line!

Product Development The process of modifying a current product or creating a new product. There are 7 steps in the new product development process.

7 Steps of Product Development New Product Development Strategy Idea Generation Screening and Evaluation Business Analysis Development Test Marketing Commercialization

Step 1: New Product Development Strategy Create a strategic objective for the company. How will you differ in the market? What is your strategy?

Step 2: Idea Generation Focus on brainstorming sessions to come up with new innovative ideas. Many entrepreneurs spend countless hours brainstorming innovative ideas.

Step 3: Screening and Evaluation Compile the brainstorming list into smaller units to narrow ideas. This step is all about evaluating ideas and trying to pick one idea that offers the greatest opportunity for success.

Step 4: Business Analysis Create financial expense and sales projections for the new product in the future. Very important step to see if the idea is financial feasible (do you have enough money?) and if it can be profitable.

Step 5: Development The new product idea has turned into a prototype and will undergo tests. Prototypes are very important to assess and make changes as needed.

Prototype A preliminary model of something.

Prototype What are some examples of prototypes you have seen before?

Step 6: Test Marketing Offer the product for sale in a small geographic area to test its success. This step is crucial to analyze the feedback from the test market and make changes if necessary.

Step 7: Commercialization The new product is brought to market with full scale production, sales and marketing support. At this point the product is profitable, people want it and you have decided to take it to the mass market!

Outsourcing Contracting a party outside the company to perform services and create goods what were traditionally performed in house by the company’s own employees and staff.

Benefits of Outsourcing Control costs Increase efficiency Reduce labor costs Reduce risks Start new projects quickly

Development Team A team working collectively for developing or creating new products.

Innovation A new idea, device, method or way of doing something that enhances the lives of users.

Think about it…… How does UBER benefit the lives of both users and drivers?

Production Costs The costs incurred by a business when manufacturing a good or providing a service.

Concept Testing The process of performing tests and surveys to evaluate a new product idea prior to the introduction to the market.

Automation The process of using automatic equipment or technologies instead of human labor to perform business processes.

Automation at work in a Tesla Factory How the Model S is made https://www.youtube.com/watch?v=8_lfxPI5ObM

Quality Control A system put in place to maintain certain standards of output.

Productivity An economic measure of output to measure the efficiency or units of output.

Logistics A detailed organization of complex operations involving many people, destinations and supplies.

Growth Plan The practice of setting goals and creating strategies and tactics to accomplish them.