Steps for Proactive PD
Prof. V N Achutha Naikan
IIT Kharagpur
Seven Steps for Proactive PD
1. Opportunity Identification 2. Design
3. Prototype production, evaluation 4. Mass Production
5. Market Testing
6. (Market) Introduction 7. Life Cycle Management
1. Opportunity Identification
R&D indicate → Technological opportunities
Integration with market demand Put effort
To find market: growing, profitable, vulnerable
To find opportunities to match strength and weakness of our organization
To tap our technological potential
To generate creative ideas to be generated
To integrate creative Engg., R&D, marketing
Ideas → concepts→ products → marketable products
2. Design
Ideas: Evaluate & refine ideas to create products with physical and psychological attributes indicating high probability of success in the market
Product design: Engineering design & development,
material selection, drawing, BoM, costing, visual design, shape, size, weight,
specifications
Process Design: Process, machines, layout, automation, QC..
Performance: Efficiency, Quality, Reliability, Maintainability, Environment
- Iterative cycles of evaluation and refinement.
3. Prototype Production and Evaluation
Prototype Production:
Make scale down version Make actual product
Product Testing
- Functional testing - Quality testing
- Reliability testing
- Environmental testing
- Safety testing
4. Mass Production
• Process Design
• Supplier and SC design
• Production planning and control
• Scheduling
• Quality control
• Packaging, Handling, Transportation
• Marketing Strategy, Advertisement, Market Testing
5. Testing & Marketing
Test marketing
- Best known step in PD
- Scaled-down version of a national introduction - Prevent national level failure
- Not simply to see success/failure of a product, but to assess:
• Customer response, company’s production/distribution system, improvement in advertising, promotion, pricing, distribution, product performance
• Input for national level launching, strategy for profit- maximizing
5. Test Marketing…
Test Marketing is 1. Expensive
2. Delays national introduction
3. Tip off competitor to a high-potential idea
Pretest Market : Evaluating new products prior to test market. The reasons for this are many, but include considerations of cost, risk, and fear of premature competitive disclosure.
1. to conduct pre-test studies 2. simulation for market study 3. improve test marketing
4. identify major needs for improvements 5. prevent costly pilot market test programs
6. Product Introduction
Successful test marketing → Introduction nationally Quick National introduction:
Depends competitors ability, Distribution, Availability of funds, Production Rate, Easiness in imitation
Otherwise market-by-market introduction
Test Market: Need not ensure complete success in national introduction
• Change of consumer tastes
• Unanticipated competitor response
• Troublesome channels of distributions
• National economic or social crisis
• New regulations
7 . Product Life Cycle Management
Much money is spent on PD & marketing
Returns on investment must be good
Price, advertising, sales effort, and promotion strategies require updating to improve profit &
length of L.C.
Product servicing – strategy?
Product warranty – strategy?
Product recalling – strategy?
Product copying – strategy?
Product duplicates – strategy?
New competitors may enter – defensive strategy?
Product disposal – strategy?
7. Product Life Cycle Management…
Should we change direction & magnitude ?
1. Price
2. Commission 3. Spare parts
4. Advertising budget 5. Product position
6. Product Characteristics 7. Distribution
Product Life Cycle Management
After mature phase:
1. Repositioning 2. Manage decline
3. Tap remaining profit potential
4. Redesigns & revitalization of product L.C
NPD – Plan versus Reality
Our Process as we say we should do it
Our process as it has happened
Idea Generation
Screening and refinement Test marketing
National & Local
Exultation
Disenchantment Confusion
Search for the guilty
Punishment of the innocent
Distinction for the uninvolved
End
