Lesson 7: Importance

of New Product Development

THANK YOUProf. Alice Andanar-Pedracio
MARK 104​​

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 A. Importance a New Product or Service Development

 NPD (New Product Development) is the driving force of companies and

vital for their organic growth.

1. Insatiable consumer appetite

2. strong worldwide competition
3. changing consumer behaviour and technology

*force companies to invest in new products to succeed or for their survival.

The success of NPD process typically requires considerable resources that

leverage the opportunity for better results in a customer’s business.

Product development is the life-blood of companies and

societies and is often referred to as “The Stage-Gate” where
teams collaborate together to perform or develop new
innovations.
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 B. Types of pricing approach

To help you put a price on what you sell the

following approaches may do:

1. replacement cost-he amount of money a

business must currently spend to replace an
essential asset like a real estate property, an
investment security, a lien, or another item,
with one of the same or higher value.
2. market comparison
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3. discounted cash flow/net present value
 2. market comparison- a method of appraising
property by analyzing the prices of similar
properties sold in the recent past and then
making adjustments based on differences
among the properties and the relative age of the
other sale.More properly called the direct sales
approach

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 3. discounted cash flow and net present value-
The discounted cash flow analysis helps you
determine how much projected cash flows are worth
in today's time. The Net Present Value tells you the
net return on your investment, after accounting for
startup costs.
1.value comparison.

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 4. value comparison- is the method of setting a
price by which a company calculates and tries to
earn the differentiated worth of its product for a
particular customer segment when compared to
its competitor -

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 Click to add photo

C. The four types of pricing objectives

1. profit-oriented pricing-

• makes profit the top priority when figuring out the ideal price to set. 

• either aim to maximize profit per unit relative to cost of goods sold and other operating
costs or

• it can aim to maximize overall profit by setting a price that is competitive enough to
increase the overall number of units you sell.
 Click to add photo

2. competitor-based pricing-

uses the price you set to appeal to customers and define your niche relative to your competitors. It doesn't
necessarily rely on setting a lower price than other available options, although this strategy will certainly make
your products appeal to customers who shop on the basis of price alone

3. market penetration

A market penetration pricing strategy is geared towards getting a foothold in a competitive market,
usually by offering a low initial price. If you start out by attracting customers on the basis of price, you
can get more people to try your products, and then start building a reputation and clientele that will allow
you to eventually charge more. 
4. skimming.

strategy uses the opposite logic from one based on market penetration. Although market penetration
uses low prices to attract attention, skimming uses a reputation that has already been built to charge
high prices 
 D. Types of Market Distribution Methods
Market Distribution means to spread the product throughout the marketplace
such that a large number of people can buy it.

The four types of distribution channels that exist:

1.  direct selling
2. selling through intermediaries
3. dual distribution
4. reverse logistics channels.

Each of these channels consist of institutions whose goal is to manage

the transaction and physical exchange of products.

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 E. Kinds of Promotion Tools
Promotional tools are strategies, methods or resources that
compel consumers to buy a product or service. Many
marketing and advertising professionals use them to raise
awareness of a new product or increase sales of a particular
item or service.

The four main tools of promotion

1. advertising,
2. sales promotion
3. public relation
4. direct marketing.
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 E. What is Market Trends

A market trend is a perceived tendency of

financial markets to move in a particular
direction over time. These trends are classified
as secular for long time frames, primary for
medium time frames, and secondary for short
time frames.

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 Activity 7: Group Work
1.Design your new product or service
2. Decide which types of pricing approach
you prefer
3.Choose your distribution methods
4. Choose promotion tools that respond to
market trends
5. Present your work after 30 minutes
This Photo by Unknown Author is licensed under CC BY-NC
20XX This Photo by Unknown Author is licensed under CC BY-NC
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