1. New Product Development and Product Life-Cycle Strategies
Md. Abdur Rob
B PHARM, MBA, PGD in DP

2. Major Stages in New Product Development
Idea generation: systematic search for new ideas
Internal sources: brainstorming
External sources: customers, competitors, distributors and suppliers
Idea screening: identify good ideas and drop poor ones
Usefulness to consumers
Good for company
Fit with objectives and strategies
Have the resources
Add value

3. Major Stages in New Product Development
Concept development: detailed version of the product concept in meaningful consumer terms
Concept testing: testing new-product concepts for consumer appeal
Marketing strategy: initial strategy for product concept:
Target market, positioning, and sales, market share, and profit goals
Price, distribution, and marketing budget
Strategy statement, long-run sales, profit goals, and marketing mix

4. Major Stages in New Product Development
Business analysis: review of sales, costs, and profit projections to determine if they meet company objectives.
Product development: developing the product concept into a physical product
Large investment
Building a prototype
Testing for safety, durability,
and acceptability

5. Major Stages in New Product Development
Test marketing: testing the product in more realistic market settings
Determine the target market profile
Assess consumer acceptability, trial, repeat purchase rate
Evaluate trade reception and distribution penetration
Design effective media plans
Standard test markets
Controlled test markets
Simulated test market

6. Major Stages in New Product Development
Commercialization: introducing a new product into the market
Introduction timing
Market rollout or full-scale introduction
Sequential product development
Simultaneous (team-based) product development

7. Product Life-Cycle Strategies

8. Product Life-Cycle Strategies
Product life cycle (PLC): the course of a product’s sales and profits over its life

9. Summary of PLC

10. BCG Matrix

11. BCG MATRIX is one of the most FAMOUS AND SIMPLE portfolio planning matrix ,used by large companies having multi-products.
Relative Market Share
Cash Generation
Market Growth rate
Cash Usage
Low High
High Low
It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories
It is based on the combination of market growth and market share relative to the next best competitor.

12. STARS High growth, High market share
Stars are leaders in business.
They also require heavy investment, to maintain its large market share.
It leads to large amount of cash consumption and cash generation.
Attempts should be made to hold the market share otherwise the star will become a CASH COW.
CASH COWS Low growth , High market share
They are foundation of the company and often the stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as possible
They are located in an industry that is mature, not growing or declining.

13. DOGS Low growth, Low market share
Dogs are the cash traps.
Dogs do not have potential to bring in much cash.
Number of dogs in the company should be minimized.
Business is situated at a declining stage.
QUESTION MARKS High growth , Low market share
Most businesses start of as question marks.
They will absorb great amounts of cash if the market share remains unchanged.
Why question marks?
Question marks have potential to become star and eventually cash cow but can also become a dog.
Investments should be high for question marks.

14. WHY BCG MATRIX?
To assess :
Profiles of products/businesses
The cash demands of products
The development cycles of products
Resource allocation and ivestment decisions
BENEFITS
BCG MATRIX is simple and easy to understand.
It helps to quickly and simply screen the opportunities open, and helps to think about how can make the most of them.
It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability.

15. Ansoff Matrix

16. Ansoff Matrix
Long-term business strategy is depend on planning for their introduction of products and service
Ansoff Matrix represents the different options open to a marketing manager when considering new opportunities for sales growth

17. Existing PRODUCTS New
INCREASING RISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
This is the objective of higher market share in existing market
Strategy: advertisement, awareness , trial, low price

18. MARKET EXTENSION/ DEVELOPMENT
Existing PRODUCTS New
INCREASING RISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
MARKET EXTENSION/ DEVELOPMENT
Achieve higher sales/market share of existing products in new markets
This is the strategy of selling an existing product to new markets.
Strategy: selling to an overseas market, or a new market segment

19. Strategy: Develop new product, new test, new product personality
Existing PRODUCTS New
INCREASING RISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
PRODUCT DEVELOPMENT
Sell new products in existing markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
Strategy: Develop new product, new test, new product personality

20. This is the most risky of all four strategies
Existing PRODUCTS New
INCREASING RISK
Existing
MARKETS
New
MARKET PENETRATION
Sell more in existing Markets
PRODUCT DEVELOPMENT
Sell new products in existing markets
MARKET EXTENSION
Achieve higher sales/market share of existing products in new markets
DIVERSIFICATION
Sell new products in new markets
This is the process of selling different, unrelated goods or services in unrelated markets
This is the most risky of all four strategies
Strategy: Develop new geographic or new location, Develop product to fulfil customer demand

21. Summary
The matrix identifies different strategic areas in which a business COULD expand
Managers need to asses the costs, potential gains and risks associated with the other options

22. Thank you