New Product Development Management NPDM 1 Mohsen SADEGHI Department of Graduate School of Management and Economics Sharif University of Technology 1

New Product Development Case Study Backpack

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Who? What? When? Where? Why? How? What: The various levels and types of requirements that need to be defined Why: The benefits of having the right NPD system Who: The stakeholders of the NPDM system and getting them involved in the process When: Requirements activities throughout the product development life cycle How: Techniques for eliciting, analyzing, specifying, and validating NPDM requirements

Definition New Product Development – Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.

New Product ‘New to the World’ Products New Product Lines Additions to Existing Product Lines Improvements in or Revisions of Existing Products Repositioning Cost Reductions

Newness to the target customers New-to-the-world High Low Reduced Costs Product Repositioning to Existing Product Lines Products 20% 26% 10% 7% 26% Low High 11% New Product Lines Revisions / Improvements The degree of product Newness to the Company

Product Growth Opportunities

New product Development Phases PhasesMarketing Activities Idea GenerationSearching for new product ideas from internal and external sources. Idea ScreeningSelect the most promising ideas and drop those with only limited potential. Study the needs and wants of potential buyers, the environment, and competition. Concept TestingDescribe or show product concepts and their benefits to potential customers and determine their responses. Identify and drop poor product concepts. Gather useful information from product development and its marketing personnel. Business AnalysisAssess the product’s potential profitability and suitability for the market-place. Examine the company’s research, development, and production capabilities. Ascertain the requirements and availability of funds for development and commercialisation. Project ROI. Product Development Determine technical and economic feasibility to produce the product. Convert the product idea into a prototype. Develop and test various marketing mix elements. Test MarketingConduct market testing. Determine target customers’ Reactions. Measure its sales performance. Identify Weaknesses in product or marketing mix. CommercialisationMake necessary cash outlay for production facilities. Produce and market the product in the target market and effectively communicate its benefits. NPD Phases

New-Product Development and Product Life-Cycle Strategies New-Product Development Strategy New-Product Development Process Managing New-Product Development Product Life-Cycle Strategies Additional Product and Service Considerations