Product Strategy : PRODUCT

New product development process It is a seven-step process (Taylor, 1984) for developing new products. Product Criteria Idea Generation Idea Screening Business Analysis Prototype Development Market Test Full Commercialization

Product Criteria It defines the kinds of products a firm will be selling or won’t be selling. Product criteria can be divided into “Must” and “Wants”.

Product Criteria for a consumer durable direct selling company MUST: 1. Potential for market dominance 2. At least 50% gross margins 3. Around P10,000 to P30,000 in end user pricing WANTS: 4. Unique benefits 5. Good product quality 6. Minimal after sales service

Menu of possible product criteria 1. Corporate image fit 2. Product standardization 3. Product line compatibility 4. Stage in product life cycle 5. Unique benefits 6. Few substitutes 7. Affordable development cost 8. Fast development period 9. Production capability and capacity 10. Raw materials availability and affordability 11. Minimal after sales service requirements 12. Affordable capital requirements 13. Profitability in % 14. Low break -even point 15. Payback period 16. Market share potential 17. Sales volume potential 18. Sales trends for the last few years 19. Repetitive needs / purchases 20. No sales seasonality 21. Distribution compatibility 22. Existing Management / marketing skills 23. No government restriction 24. No legal restrictions

Possible product for retail stores 1. Product Uniqueness 2. Good Value 3. Advertising Support 4. Profitability 5. Introductory discounts or allowances 6. Company reputation

Possible product criteria for a direct selling company 1. Not widely distributed at the retail stores 2. Not widely advertised in mass media 3. Attractive profit margins 4. Affordable pricing 5. Requires educational / demonstrative effort to sell 6. Almost every one can use and use continuously

Idea Generation Ideas need not always come from crisis situations. There must be systematic ways to regularly get new product ideas. A creative source of product idea is available by simply talking to customer and the sales force often, most especially about problems both groups are encountering with existing products

Marketers can also get new product ideas by analyzing and anticipating changes in industry, technology, or environment. From a marketing standpoint, new ideas can be sourced by combining the answers to the questions “who” (Target market), “what” (Value proposition), and “how and where” (Business system).

Marketing techniques to get new product ideas  Mission Statement – It answer the question “What business are we in?”. It will dictate what type of products or services they will offer. A three-dimensional mission structure identifying customer benefit, customer groups, and substitutes is suggested to define possible mission statement products.

Examples of new product ideas from mission statement PRODUCTBUSINESSPOSSIPLE NEW PRODUCT Auto RepairProviding safety and comfortable drives Automotive spare parts, seatbelts, car fire extinguisher Water PurifiersConsumer healthy lifestyleAir purifiers, foot detox, mo- oil cookware, food, supplements, exercise PhotocopierOffice productivityComputers, facsimile machines, paper shredders, PABX System CrayonsInspiring creative self- expression Brushes, coloring books, marking pens BusMoving people and cargoTaxi, jeep, trucking

Three-dimensional structure for a mission statement

 Focus Group Discussions (FGDs) – The FGDs are conducted in a meeting room discuss the issues and the propositions stimulates a wide range of responses and interactions enabling marketer to understand the customer better. Usually, the FGDs panelist are existing customers or potential customer of a product category.

 Competitive products Segmentation – Products that compete in a specific market can be grouped to define segments based on the product identities rather than on individual company insights. For example: Consumer with headaches may define diff. analgesic products like Bayer (Aspirin) and Biogesic (Paracetamol); they may also include Efficasent oil or even Tiger Balm ointment.

 Perceptual Mapping – it is an alternative technique in Competitive Product Segmentation, it concentrates only on the determinant attributes (most important attributes) of a product.