PRODUCT AND BRAND MANAGEMENT

PSDA-1

A new product is a product that is new to the company introducing it even though it may have
been made in same form by others. In the area of toilet soaps, different brands introduced by
each company are that way, new products as it is new to the company. New products are
those whose degree of change for customers is sufficient to require the design or re-design of
marketing strategies. Product development is the next step to product planning. Product
development is the process of finding out the possibility of producing a product. It includes
the decision as to whether it would be feasible or not to produce the product and whether it
would be profitable or not for the enterprise to do so.
W.J. Stanton, M.J. Elzel and B.J. Walker define ‘new product’ as, “A new product is one
which is really innovative which is significantly different from existing and imitative
products that are new to the company.”
If a company once has carefully segmented the market, chosen its target customers, identified
their needs, and determined its market positioning, it is better able to develop new products.
Marketers play a key role in the new-product process, by identifying and evaluating new-
product ideas and working with R&D and others in every stage of development.
Given below is the graphical representation of the 8 steps in the developing a new product.

 Idea Generation:
The systematic search for new product idea.
Major sources of new product ideas include:
i. External sources which consists of
a) Customers
b) Competitors
c) Distributors
d) d. Suppliers
ii. Internal Sources – R&D
iii. Brain storming of –
a) Scientists
b) Engineers
c) Marketing people
d) Managers
e) Salesmen
 Idea Screening:
i. Screening new product ideas in order to spot good ideas and drop poor ones as soon
as possible.
ii. The purpose of idea generation is to create a large number of ideas.
iii. The purpose of the succeeding stages is to reduce that number.
 Concept Development and Testing:
Product Concept:
A detailed version of new product idea stated in meaningful consumer terms. It is important
to distinguish between a –
i. Product idea
ii. Product concept
iii. Product image
 Product idea is an idea for a possible product that the company can see itself offering
to the market.
 Product concept is a detailed version of the idea stated in meaningful consumer
terms.
 Product image is the way consumers perceive an actual or potential product.
Concept development is development of product concept.
Concept Testing:
Testing new product concepts with a group of target consumers to find out if the concepts
have strong consumer appeal. Concept can be presented symbolically or physically.
Some people use pictures, words, virtual reality etc. for concept testing.
 Marketing Strategy Development:
i. Designing an initial marketing strategy for a new product based on the product concept.
ii. The marketing strategy statement consists of three parts –
a. The first part describes the target market, the planned product positioning and the sales,
market share and profit goals for the first few years.
b. The second part of the marketing strategy statement outlines the product’s planned price,
distribution, and marketing budget for the first years.
c. The third part of the marketing strategy statement describes the planned long run sales,
profit goals and marketing mix strategy.
 Business Analysis:
i. A review of sales, costs and profit projections for a new product to find out whether
these factors satisfy the companies objectives –
ii. It is evaluation of business attractiveness of the proposal.
The company uses the sales and costs figures to analyse the new products financial
attractiveness.
 Product Development:
Developing the product concept into a physical product in order to assure that the product
idea can be turned into a workable product.
i. This stage involves large investments.
ii. The R&D department will develop and test one or more physical versions of the
product concept (prototype).
iii. The prototype must have the required functional features and also convey the intended
psychological characteristics.
 Test Marketing:
i. The stage of new product development in which the product and marketing program
are tested in more realistic marketing settings.
ii. Test marketing gives the marketer experience with marketing the product before
going to the great expense of full introduction.
 Commercialisation:
Introduction of the new product into the market:
 i. This implies commitment of high investments in manufacturing facilities, sales
promotion and other marketing efforts in the first year.
ii. The company launching a new product must first decide on introduction timing.
iii. Next the company must decide where to launch i.e. in a single location or a region or
national market or international market.
iv. They may develop a planned market rollout time.

THE PRODUCT

PRODUCT NAME: Ranger

INDUSTRY: Automobile
FUNCTION: The function of this car consist of:
1. 4WD system
2. Fully automatic car
3. Cruze control
4. Adjustable suspension
5. Triple driving mode

The new product development of this product are as follows:

 Idea Generation:
The new product development starts with the search and generation of ideas which may arise
from various sources like company’s R&D department, market and consumer’s trends,
competitors, focus groups, employees, sales people and such other.
 Idea Screening:
At this stage, the generated ideas are screened down on the basis of their feasibility and
viability, only practical and workable ideas are developed. The purpose of screening is to
have a critical evaluation of product ideas and drop the poor ideas.
 Concept Development and Testing:
The company may have considered the idea to be feasible, but is has to be tested with the
target audience. Here the product idea is converted into meaningful consumer item and
presented to appropriate target consumers to know their reactions. If the reaction is positive,
the company moves to next stage.
 Market Strategy Development:
After successful concept testing, the marketing manager will develop a preliminary marketing
strategy for introducing the product in the market. The marketing strategy will highlight the
segmentation, targeting and positioning strategy.
 Business Analysis:
Business analysis is the study of economic feasibility of the new product i.e. whether the
product will be financially worthwhile in long run or not. This stage estimates the expected
future profitability of the new product, i.e. what cash flow product can generate, what will be
the cost of production, what will be the expected life of the product, share of market product
may get etc.
 Product Development:
Once the product is declared economically feasible, the company gives the product its
physical shape. This stage involves huge investments to be made, as compared to the
pervious stages. The physical product as it would appear is prepared so that it can be tested.
 Test Marketing:
Test marketing is a stage where the new product is tested with a particular target market, to
find out whether it is acceptable to the consumers or not. The expectation of the consumers
from the product is tested here. Any improvement or modification required can be taken care
of. Test marketing, thus, help in pretesting of the product and the marketing plan, before it is
launched in the market.
 Commercialization:
Successful test marketing gives way to actual introduction of the product in the market place.
Here the company has to consider certain factors like when to launch the product, where and
how the product will be launched, which market and which consumers to target etc. Market
entry timing is also very important.