3.5 Precharged Half-Buffers
4.1.2 Channel Processes
new segment of a market. Basically, these programmes may be employed to:
acquire competitors' customers in segments where a firm presently does not have an offering, OR
stimulate demand among current nonusers of a product form.
In these two situations above, an entirely new product must be created with product
features distinguishing it from the current offering.3.4.3 COMPLEMENTARY-PRODUCT PROGRAMMES
Complementary product programmes seek to introduce products that can be
general y used with existing products. The objectives of these programmes may
be two -fold: either to
enhance sales of existing productsor to establish sales
growth in related markets.Complementary products have been found to enhance the sales of existing products. For example, a flash at achment to a camera will enable the customer to use the product in more situations, and wil thus enhance the quality of the
photographs taken. In another way, a complementary product may be introduced simply to take advantage of a company's brand name, image, or sales force. For example, a tyre manufacturing firm may add the production of tubes as complementary
products.
3.4.4 DIVERSIFICATION PROGRAMMES
Diversification programmes are designed to establish a firm in new markets in order to achieve objectives such as new growth opportunities
OR
sales stability.Generally, diversification is a policy of adding new products to serve new markets.
3.5 THE PRODUCT-DEVELOPMENT PROCESS
The specific process used in implementing product-development programmes varies among organisations. However, it is important that they employ logical, sequential processes with ful recognition of the role that product is expected to play in corporate and marketing strategy. The advantage of having such a structured
approach is to provide some mechanism for evaluating a new product idea at several points in time as additional information is developed. Hence in each stage, management must decide whether:
(i)to move to the next stage; (ii)to abandon the product; or (iii)to seek additional information
This evaluation process is wel il ustrated by Figure 1.
Source: Stanton, W.I. (1978): Fundamentals of marketing. New York, McGraw-Hil ,
Inc. p. 186.
We next describe the following eight stages in the product-development
process:
1.Idea generation
2 . S c r e e n i n g
3.Concept development and testing
4 .M ark et i n g s t r at eg y 5 . B u s i n e s s a n a l ys i s
6 .Produ ct d evelop ment
7 .M ark et t es t i n g an d 8 .Co mme r ci al i s at i o n.State 1: Idea Generation
New-product development starts with an idea. Generally, ideas can come from a variety of sources, it is however desirable to establish a formalised approach to generating new-product alternatives. This entails incorporating the firm's product- development objectives. In other words, a systematic approach should be
established to search for ideas that will meet current primary objectives. In
addition, top management should define the product and markets to
emphasise. Furthermore, it should state how much effort should be devoted todeveloping original products, modifying existing ones, and imitating competitors' products.
Sources of New-Product Ideas
New-product ideas often come from many sources including the following:
(i)Customers: Our earlier understanding of the marketing concept suggests that customers' needs and wants should be the logical places to start in the search for
new-product idea. In this sense, films can identify customers' needs and wants through direct customer surveys, projective tests, focus group discussions, as wel as suggestions and complaints let ers from customers.
(i )Scientists: Many organisations in the chemical, electronics and
pharmaceutical industries rely on their scientists for new product ideas.(i i)Competitors' product: New product ideas can also be generated by monitoring
competitors' products. For instance, firms can listen to distributors, suppliers and sales representatives in order to know the position of things in the market. In addition, firms can assess who is buying competitors' new products together with the particular reasons for making the new purchase. Furthermore, firms can buy competitors products, dismantle them, and build bet er ones. This is known as product imitation and improvement rather than product
innovation.
(iv)Firm's sales representatives and dealers: These are important sources of new
product ideas. Their activities on the field usually endow them with firsthand exposure tocustomers' needs and complaints. They are usual y the first to learn of competitive developments.
(v)Top management: This is another major source of new-product ideas. However, as we already observed (under reasons for product failures) this might not be good enough, since a
top executive may push through a pet idea without thoroughly researching market size or interest.
(vi)Miscel aneous sources: Other sources include investors, patent at orneys,
university and commercial laboratories, industrial consultants, advertising agencies,
marketing research films, and industrial publications.Stage 2: Idea Screening
The purpose of this stage is to reduce the large number of ideas generated from the
previous stage (i.e idea generation)". Basical y, idea screening rates the general desirability of the new product concept to the firm. For instance, even when a concept is being viewed as marketable, the same concept may be seen as inappropriate for a firm that lacks the specific resources needed to produce and market it successful y.
The following aspects are usual y given proper considerations in the rating scheme for evaluating new product ideas: marketability, durability, productive ability and growth potential (See Table 10.1)