New-Product Development Strategy

A firm can obtain new products through:

• Acquisition
• New-product development

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 New-Product Development Strategy

Acquisition refers to the buying of a whole company, a patent, or a

license to produce someone else’s product

New product development refers to original products, product

improvements, product modifications, and new brands
developed from the firm’s own research and development

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 Sources of New Products

External Internal
Sourcing Development

Collaborative
Venture

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 New-Product Development Process

Idea Generation
Prototype
Development

Idea Screening

Test Marketing
Concept
Development
& Testing
Commercialization
Business
Analysis
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 Idea Generation
 Idea Generation:
 The initial stage for the new-product
development process.

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 Idea Screening

 Idea Screening:
 Evaluate the idea pool and reduce it to a
smaller and more attractive set of potential
new products.

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 Concept Development and Testing

 Concept Development:
 The process of shaping and refining the idea into a
more complete product concept.

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 Business Analysis

 Business Analysis:
 Stage of the new-development process that
calls for preparing initial marketing plans for the
product.

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 Prototype Development

 Prototype Development:
 Converting the concept into an actual product.

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 Test Marketing
 Test Marketing:
 Testing the product
prototype and marketing
strategy in simulated or
actual market situations.

 Simulated Test
Marketing:
 Evaluating a new product
in situations contrived to
be similar to how
consumers would
purchase and use it.
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 Test Marketing

 Standard Test Marketing:

 Testing a new product and its marketing strategy
in actual market situations.

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 Commercialization
 Commercialization:
 The firm introduces the product on a full-scale basis,
involving:
 Understanding Consumer Adoption

 Timing

 Coordination

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 Keys to New-Product Success

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