 A physical object like camera, cellphone or

a burger

 A service like a spa or a dental check-up

 A place like Paris or Boracay

 A personality like Anne Curtis or Miley Cyrus

NEW PRODUCT
D E V E LO P M E N T &
MANAGEMENT
NEW PRODUCT
DEVELOPMENT
It is the development of original
products, product improvements,
product modifications, and new brands
through the firm’s own product
development efforts.
A firm can obtain new products in two
ways:
• One is through ACQUISITION- by
buying a whole company, a patent, or
a license to produce someone else’s
product.
• The other is through the firm’s own
NEW-PRODUCT DEVELOPMENT. By
new products, it means original
products, product improvements,
product modifications, and new
brands that the firm develop through
its own R&D efforts.
NEW PRODUCT DEVELOPMENT PROCESS

IDEA CONCEPT
MARKETING
IDEA DEVELOPMEN
GENERATIO STRATEGY
SCREENING T AND
N DEVELOPMENT
TESTING

PRODUCT
BUSINESS TEST COMMERCIALIZATIO
DEVELOPMEN N
ANALYSIS MARKETING
T
IDEA
GENERATION
New product development starts with idea
generation- the systematic search for new-product
ideas. A company typically generates hundreds of
ideas, even thousands, to find a few good ones.

2 Major Sources include:

Internal Idea Sources- The company can find

new ideas through formal R&D. Beyond its R&D
process, companies can pick ideas from the brains
of its employees- from executives to scientists,
External Idea Sources- Companies can also obtain good
new-product ideas from any of a number of external sources.
Such as the following:
• Distributors
• Suppliers
• Competitors
• Customers
• Other idea sources are trade magazines, shows, and
seminars; government agencies; advertising agencies;
marketing research firms; universities and commercial
IDEA SCREENING
laboratories; and inventors
It is the first reducing-idea stage. It is the
screening of new-product ideas to spot good ideas
and drop ones as soon as possible.
CONCEPT
D E V E LO P M E N T
An attractive idea must be developed into a
product concept.

A PRODUCT CONCEPT is a detailed version of

the new-product idea stated in meaningful
consumer terms.

A PRODUCT IDEA is an idea for a possible

product that the company can see itself offering
to the market.
CONCEPT TESTING
It is testing new-product concepts with a group of
target consumers to find out if the concepts have
strong consumer appeal.
MARKETING STRATEGY
DEVELOPMENT
It is designing an initial marketing strategy for a
new product based on the product concept.

BUSINESS ANALYSIS
It involves a review of the sales, costs, and profit
projections for a new product to find out whether these
factors satisfy the company’s objectives.
PRODUCT DEVELOPMENT
It is developing the product concept into a
physical product to ensure that the product idea can
be turned into a workable market offering.

TEST MARKETING
This is the stage of new-product development
in which the product and its proposed marketing
program are tested in realistic market settings.

C O M M E R C I A L I Z AT I O N
This is the stage where the new product is
introduced in the market.
New product development involves more than
just going through a set of steps. Successful new
product development requires a customer-
centered, team-based and systematic effort.
• CUSTOMER-CENTERED NEW PRODUCT
DEVELOPMENT
This is where it focuses on finding new ways to solve
customer problems and create more customer-satisfying
experiences.

• TEAM- BASED NEW PRODUCT DEVELOPMENT

An approach to developing new products in which
various company departments work closely together,
PRODUCT LIFE-
CYCLE
STRATEGIES
P R O D U C T L I F E C YC L E
The course of a product’s sales and profits
over its lifetime. It has five distinct stages
which are:

1. Product Development begins when the

company finds and develops a new-product
idea. In this stage, sales are zero and the
company’s investment costs mount.
2. Introduction is a period of slow sales
growth as the product is introduced in the
market. Profits are non-existent in this stage
3. Growth is a period of rapid market
acceptance and increasing profits.

4. Maturity is a period of slowdown in sales

growth because the product has achieved
acceptance by most potential buyers. Profits
level off or decline because of increased
marketing outlays to defend the product
against competition.

5. Decline is the period when sales fell off

PRODUCT
STRATEGIES
THIS IS OFTEN CALLED THE ROADMAP OF A PRODUCT
A N D O U T L I N E S T H E E N D -T O - E N D V I S I O N O F T H E PRODUCT
A N D W H AT T H E P R O D U C T W I L L B E C O M E .
TYPES OF PRODUCT
STRATEGIES
[Link] Positioning is a strategy in placing a
brand in that part of the market where it will have
an approving acceptance compared with competing
brands.
Positioning against a competitor

e.g. Hungry Jack's tastes better (with implication: better than the market
leader, McDonald's)
• Positioning according to product attribute

e.g. Dove is one-quarter moisturizer

• Positioning for a User

e.g. Johnson and Johnson range of baby products

2. Product Elimination is a strategy cuts in the
composition of a company’s product portfolio by
pruning the number of products within a line or by
totally divesting a division or business.

3. Product Repositioning is a strategy means

reviewing the current position of the product and
its marketing mix and seeking a new position for it
that seems more appropriate.
4. New Product- This strategy is a set of operations
that include:
-Within the business, a product new to its
earlier line of products
-On the market, a product that provides a
new kind of satisfaction
New Product could be in the form of the
following alternatives:
-Product improvement/modification
-Product imitation
-Product innovation

5. Product Overlap- This strategy is about

competing against one’s own brand through
6. Diversification- This strategy is developing
unfamiliar products and markets through:
-Concentric- The products introduced are
related to existing ones in terms of marketing or
technology
For example, Coke
purchased several beverage
manufacturers to expand
beyond the soft drink industry
to the beverage industry.
Coke’s acquisitions of Vitamin
Water, Honest Tea, Fuze
Beverage and Core Power were
concentric diversification
-Horizontal- The new products are
unrelated to existing ones but are sold to
the same customers
For example,
Avon's move to
market jewellery
through its door-to-
door sales force
involved marketing
new products
through existing
channels of
-Conglomerate- Adding new products,
unrelated products or services.

For example, GE makes light bulbs and

refrigerators. It manages more credit cards than
American Express. It owns more aircraft than American
Airlines.
7. Product Scope- It is determined by
taking into account the overall mission
of the business unit. The company may
implement a single-product, a multiple
product strategy or a system of
products strategy.
If the product is a cell
phone, its product scope
will be its screen size,
battery backup,
processor speed,
camera type, memory,
8. Value Marketing- It concerns delivering on
promises made for the product or service. These
promises product quality, customer service and
meeting time commitments.
9. Product Design- It deals with the
degree of standardization of a
product. The company has an option
among strategic choices such as
standard product, customized product
and standard product with
modifications.
PRODUCT LINE
& MIX
STRATEGIES
C L A S S I F I C AT I O N O F
PRODUCTS
PRODUCT ATTRIBUTES
PRODUCT LINE
STRETCHING DECISION
It takes place when a business adds fresh
product to the product line and the latest product
types are of a higher or lower quality than
present products in the product line.

-Downward Stretching- adding low-end

items in the product line.
-Upward Stretching- adding high-end items
in the product line
-Two-way Stretching- stretching in both
directions if an organization is in the middle
PRODUCT
DIFFERENTIA
TION
BRANDING
“ A product is anything offered
for sale by a firm to buyers to
satisfy their physical, social,
symbolic, and psychological
wants and needs. “
To maintain the interest of the buyers, what
qualification or benefit that you need to achieve
as 1.
a Quality
marketer?

2. Reputation of the firm and manufacturer

3. Packaging

4. Credit

5. Information about the product

6. Warranty

7. After Sale Service

8. Delivery
The purpose of product differentiation is not only
to satisfy customer and make more profit BUT to beat
the competition.
In product differentiation, the following tools are
considered:

 Branding
 Packaging
 Image
 Product Features
 Quality
 Location
 Promotion
 Innovation
 Different service levels
WHAT IS A
BRAND?
A BRAND is a name, sign,symbol, or
design, or a combination of these that
identifies the maker or seller of products
or services.
BRAND names helps buyers identify
products that might benefit them.

BRAND names become the basis

of the whole story about the product.
In addition, they tell the buyer
something about quality and insure that
the quality will remain constant.
W H AT I S
B RA N D I N G ?
 Is the marketing action which identifies and
helps differentiate the goods or service of one
seller from those of another.

Make sure that the

product he is selling
will provide real
satisfaction to the
buyer.
CRITERIA for a Good
Brand:
 It should suggest something about the product’s

benefits and qualities.

 It should be easy to pronounce, recognize, spell, and

remember.

Examples: Milo, Nido, and Alaska

 It should be distinctive.

 It must be adaptable to additional product lines.

Examples: Sony-brand has been adapted by

BRAND EQUITY
Is the value of a brand on the extent to which it has
high brand loyalty, name, awareness, perceived quality,
strong brand association, and other assets such as
patents, trademarks, and channel relationships.
MEASURI NG THE ACTUAL EQUI TY
O F A B R A N D N A M E I S D I F F I C U LT.
H O W E V E R , T H E A D VA N TA G E S O F
H AV I N G I T I N C L U D E :

 H I G H C O N S U M E R AWA R E N E SS
A N D L O YA LT Y
 G R E AT E R E A S E I N L A U N C H I N G
BRAND EXTENSIONS BECAUSE OF
HIGH BRAND CREDIBILITY
 A GOOD DEFENSE AGAINST
FIERCE PRICE COMPETITION
 B E L I E F I N B E I N G T H E C O M PA N Y ’ S
MOST
Selecting a brand name is an important step.
The brand name should be carefully chosen since
a good name can add greatly to a product’s
success. Desirable qualities of a good brand
name include:
 It should suggest something about the product’s
benefits and qualities.
 It should be easy to pronounce, recognize, and
remember

ItItshould
shouldbe
beextendible.
distinctive.
It should translate easily into foreign languages.
It should be capable of registration and legal
protection. Once chosen, the brand name must be
Brand
Brand name Brand Sponsor strategy
selection
Manufacturer’s New brands
brand
Selection Line extensions
Private brand
protection Licensed Brand Brand
Co-branding extensions
Multibrands
[Link] Branding
is a branding strategy in which the whole brand name for a product is
designated by the manufacturer.

2 Approaches:

[Link] Approach- family branding strategy uses the same brand

name to cover a group product. Ex. Sony, VS…

Advantages:
- Buyers who have a positive experience with the product will extend this favorable
attitude to other products with the same brand.
- The level of branding awareness is raised and can reduce the rate of advertising
costs.

b. Multibrand Approach- requires the firm to provide each product with a

distinctive name.
Ex. P&G, Nestle

Advantages:
-It is useful when each brand is intended for a different marketing segment.
[Link] Label Branding- referred to private
labeling or private branding- refers to the
branding strategy of a firm which manufactures
products but sell them under the brand name of
a reseller.
3. Mixed branding- refers to the use of the
manufacturer and reseller brands in a product.
It is expected that market segments attracted
to the manufacturer and to the reseller will
patronize the mixed branded product.
4. Generic Branding- branding
strategy which lists no product
name, only a description of
contents. This approach is
applicable to rice, salt, and
charcoal.

5. CO-BRANDING- Is the
practice of using the established
brand names of two different
Advantages include:
 Combined brands create broader customer appeal and greater brand equity.
 It may allow a company to expand its existing brand into a category it might
otherwise have difficulty entering alone
Disadvantages include:
 Complex legal contracts and licenses are involved.
 Coordination efforts are often difficult.
 Trust is essential between partners. It is often hard to come by.
INTRODUCE LINE
EXTENSION
- Existing brand names are extended to
new forms, sizes, and flavors of an existing
product category. A company might introduce
line extensions as a low – cost, low - risk way
of introducing new products in order to:
 meet consumer desires for variety
 meet excess manufacturing capacity
Simply command more shelf space
INTRODUCE BRAND
- EXTENSION
EXISTING BRAND NAMES ARE EXTENDED
T O N E W O R M O D I F I E D P R O D U C T C AT E G O R I E S .
A D VA N TA G E S I N C L U D E :

 T H E Y H E L P A C O M PA N Y E N T E R N E W
P R O D U C T C AT E G O R I E S M O R E E A S I LY.
 THEY AID IN NEW PRODUCT RECOGNITION.
 T H E Y S AV E O N A D V E R T I S I N G C O S T.
I N T R O D U C E M U LT I - B R A N D S
- New brand names are introduced in the
same product category. Advantages include:

 They gain more shelf space.

 They offer several brands to capture “brand
switchers.” The company can established flanker
or fighter brands to protect its major brand.
 It helps to develop healthy competition within
the organization.
 Each brand can have a separate following.
INTRODUCE NEW BRANDS
- N E W B R A N D N A M E S I N N E W C AT E G O R I E S
A R E I N T R O D U C E D . A D VA N TA G E S I N C L U D E :

 T H E Y H E L P S M O V E A W AY F R O M A B R A N D
T H AT I S FA I L I N G .
 C A N G E T N E W B R A N D S I N N E W C AT E G O R I E S
B Y C O R P O R AT E A C Q U I S I T I O N S .
 LARGE CONSUMER-PRODUCT MARKETERS ARE
N O W P U R S U I N G M E G A B R A N D S T R AT E G I E S
WHERE WEAKER BRANDS ARE WEEDED OUT
AND RESOURCES ARE FOCUSED ACHIEVING
NUMBER-ONE OR TWO MARKET SHARE
P O S I T I O N S I N T H E I R C AT E G O R I E S .
“In this ever-changing society, the
most powerful and enduring brands
are built from the heart. They are real
and sustainable. Their foundations are
stronger because they are built with
the strength of the human spirit, not
an ad campaign. The companies that
are lasting are those that are
authentic.”
PACKAGING
W H AT D O W E M E A N
BY PAC KAG I N G ?
 Packaging is the science, art,
and technology of enclosing or
protecting products for distribution,
storage, sale, and use. Packaging
also refers to the process of design,
evaluation, and production of
packages.
PACKAGING
Packaging decisions are the third set of
decisions that must be made about individual
products.
 The package may include the primary container
(What product it contains, for ex. A tube full of
toothpaste); the secondary package (the box
that contains the tube); the shipping package (a
cardboard case).
Traditionally, packaging decisions are based on


cost and production factors. Packaging now has

promotional value. To enhance this aspect of the
package, the marketer should:

 established a packaging concept

 decide on specific elements of the
package
 tie together elements to support the
positioning and marketing strategy.
 designing and producing the container
or wrapper for a product
TYPES OF PACKAGING
TERTIARY

SECONDAR
Y

PRIMARY
PRIMARY PACKAGING -Smallest unit of distribution
or use.
-Indirect contact with
the content.
FUNCTION:
 Protective Function
 Storage

SECONDARY PACKAGING- Outside primary

packaging, perhaps used to group primary
packages together.

 Sales Function
 Promotional
 Service & Guarantee
Importance of packaging:
Some of the major significance of packaging can be detailed as follows:

* Can make a product more convenient to use or

store, easier to identify or promote or to send
out a message.
* Packaging is of great importance in the final choice
the consumer will make, because it directly involves,

APPEAL

INFORMATION

CONVINIENCE
•The paramount concern of packaging is the
reach ability of the product without any damage.
No matter where and how the products are
transported or shipped, they arrive at the
customer's door in working condition without
need of repair or adjustment.
PURPOSE:
PROTECTION • protect and preserve the contents during
& transit from the manufacturer to the
ultimate consumer.
PRESERVATION
• most products must be contained
before they can be moved from one
place to another.
CONTAINMENT • to maintain the quality of the product
and reach ability of the product in the
consumer's hand without spillages.

•A major function of packaging is the

communication of the product. A
COMMUNICATION
package must communicate what it
sells.
Factors in Packaging
Decisions
Packaging decisions are important for several reasons
including:

 Protection – Packaging is used to protect the

product from damage during shipping and
handling, and to lessen spoilage if the protect is
exposed to air or other elements.

 Visibility – Packaging design is used to

capture customers’ attention as they are
shopping or glancing through a catalog or
 Added Value – Packaging design and structure can
add value to a product.

 Distributor Acceptance – Packaging decisions

must not only be accepted by the final customer, they
may also have to be accepted by distributors who sell
the product for the supplier. For instance, a retailer
may not accept packages unless they conform to
requirements they have for storing products on their
shelves.

 Cost – Packaging can represent a significant portion

of a product’s selling price
 Long Term Decision – When companies
create a new package it is most often with the
intention of having the design on the market
for an extended period of time.

 Environmental or Legal Issues –

Packaging decisions must also include an
assessment of its environmental impact
especially for products with packages that are
frequently discarded. Packages that are not
easily bio-degradable could draw customer and
possibly governmental concern.
LABELING
A label is an
information tag,
wrapper, seal, or
imprinted message
Aattached to afunction
labels main product.
is to
inform about contents and
give directions
DESCRIPTIVE
LABEL
• Information about
product use, care,
other features
G RA D E L A B E L
 States the quality of a
product
THANK
YOU!