NEW PRODUCT DESIGN AND DEVELOPMENT
According to Kotler, P. "A company must carry out strong new product planning and set up a systematic, customer-driven new-product development process for finding and growing new products" (p.263). It means that a company must have an strategy to design and develop a new product to positioning it effectively in the market. There are several steps to driven a development of a new product, which are Idea generation, Idea screening, Concept development and testing, Marketing strategy development, Business analysis, Product development, Test marketing, and Commercialization.
Google image.
Idea generation:
The first stage of New Product Development relies on the generation of ideas. A company can generate dozens of innovative and smart ideas through different sources, such as research and development (R&D), but only few of them will be chosen to be projected as new products. During a lecture, we talked about the internal strategies that companies have to generate new ideas. Some companies are using feedback from its customers to testing what the customers are looking for. These companies have a specialized team of designers and entrepreneurs (R&D team) that pay attention to customer's needs, development their ideas, and create a customer's satisfaction and a long business-relationship.
Another idea is the Marketing plans, which teams were developing throughout the semester. My team # 7 and I were following all the stages until the business plan. Because it was part of our educational curriculum, it was not developed until the stage of commercialization. Our team were generating different ideas of new products so that we could choose one to work on in our Marketing plan. We chose the idea of an app that served as a location-based system being used during social events (see our Marketing plan attached below).
Idea screening:
According to Kotler, P. "Idea screening helps spot good ideas and drop poor ones as soon as possible" (p.265). This stage functions like a filter of ideas. When the best idea arrives, it is time to go to the next step to define all the characteristics and features of the best idea.
Concept development and testing:
According to Kotler, P. "An attractive idea must be developed into a product concept. It is important to distinguish between a product idea, a product concept, and a product image" (p.267). It means that in this stage a product idea must be developed to know exactly the purpose of the product, the market target, how will the product or service work in order to satisfy customers' needs. Also, the company must create an image that tells customers by itself the product's concept and the mission that the company has as a provider.
During the develop of our Marketing plan, my team and I got the definitive product idea, product concept, and image. As I mentioned before, my team and I got the idea of implementing an app that help people to find each other during a social event. We definitively know about the problem, which is the fact of people getting lost while they are in social events, a concert specifically at this point. We knew the app must have the quality of being a location-based system, which is a software application used to locate people. The app will be used in a circle of friends, so it will restrict the use to users of the app, who give the company their personal information. Also, it will give a sense of privacy. Also, we defined in this stage that our target market must be Generation Y, because these people love technology and they are accustom to attend social events. In addition, we created a survey to know if the idea could be a good idea among the Generation Y (Refer the Marketing plan below for more information).
Marketing strategy development:
According to Kotler, P. "The Marketing strategy development relies on designing an initial marketing strategy for a new product based on the product concept" (p.268). It means that all marketing strategies must be tested, objectively, in order to develop the new product. Target market must be established after the survey, features of the product must be developed, and financial analysis must be examined in detail to know if the new product will be economically efficient in short and long-term goals.
For instance, in our Marketing plan, we knew, after survey's results, that Generation Y will be our target market. Then, we decided that our product's features will include a constant tracking location, a history of three previous locations, a circle of friends would be accessible to implement, a panic button, and an online customer service will function 24/7. Also, we decided that those features would be part of a free primary account, but we would provide it with more features in a premium account, which will cost $3.95 monthly.
In order to find the features that we will include in the premium account, we learned from competitors. So, a battery life saver arrived to our minds, because it is the most worst weakness of competitors.
A value proposition of our new product, which we called HereHere, will relies on the idea of giving users a sense of security, peace of mind, and avoid getting lost from their groups of friends. Also, we decided that the break-even point will be when we sell 154,433 premium accounts, which represents $610,012.13 that we expect to obtain in the first three months after a launch of one year (Please refer to the Marketing plan attached below to get more information).
Business analysis:
According to Kotler, P. "Business analysis relies on a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives" (p.269). This stage relies to the confirmation that the new product would be financially successful. This confirmation is made through the review of the marketing plan, especially of the financial section. HereHere, our app, didn't pass for this stage, but you can refer to the link of the marketing plan below so that you can have a great sense whether this product would be a successful one in the market.
Product development:
According to Kotler, P. "Product development relies on developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering" (p.269). It means to make the new product physically. HereHere was not made. but we design a picture to see how the app would seem on the screen of a cell phone. Please see below and open the link HereHereimages so you can appreciate how it would look like.
Test marketing:
According to Kotler, P. "Test marketing is the stage of new-product development in which the product and its proposed marketing program are tested in realistic market setting" (p.270). This stage relies on the first time when the new product is introduced in the market. The first months are like a testing period, which can define if the new product would be positioning easily among the target market. I can appreciate that the first three months of HereHere app in the market would be definitively the clue to see if our app would be easily positioned. The decision of offering a primary account for free relied on the idea of facilitating our app being easily accessible for everyone. We know that this new product would be listed in the preference of the users.
Commercialization:
According to Kotler, P. "Commercialization is the stage while introducing a new product into the market" (p.271). Commercialization is the last step where a new product is finally introduced formally into the market. My Marketing team and I think that HereHere app could be introduced into the market after the first year of launching (Please, refer to the Marketing plan attached below for more information).
References
Kotler, P., & Armstrong, G. (2014). Principles of Marketing. Upper Saddle River, NJ; Pearson.
Links:
Google image.
Idea generation:
The first stage of New Product Development relies on the generation of ideas. A company can generate dozens of innovative and smart ideas through different sources, such as research and development (R&D), but only few of them will be chosen to be projected as new products. During a lecture, we talked about the internal strategies that companies have to generate new ideas. Some companies are using feedback from its customers to testing what the customers are looking for. These companies have a specialized team of designers and entrepreneurs (R&D team) that pay attention to customer's needs, development their ideas, and create a customer's satisfaction and a long business-relationship.
Another idea is the Marketing plans, which teams were developing throughout the semester. My team # 7 and I were following all the stages until the business plan. Because it was part of our educational curriculum, it was not developed until the stage of commercialization. Our team were generating different ideas of new products so that we could choose one to work on in our Marketing plan. We chose the idea of an app that served as a location-based system being used during social events (see our Marketing plan attached below).
Idea screening:
According to Kotler, P. "Idea screening helps spot good ideas and drop poor ones as soon as possible" (p.265). This stage functions like a filter of ideas. When the best idea arrives, it is time to go to the next step to define all the characteristics and features of the best idea.
Concept development and testing:
According to Kotler, P. "An attractive idea must be developed into a product concept. It is important to distinguish between a product idea, a product concept, and a product image" (p.267). It means that in this stage a product idea must be developed to know exactly the purpose of the product, the market target, how will the product or service work in order to satisfy customers' needs. Also, the company must create an image that tells customers by itself the product's concept and the mission that the company has as a provider.
During the develop of our Marketing plan, my team and I got the definitive product idea, product concept, and image. As I mentioned before, my team and I got the idea of implementing an app that help people to find each other during a social event. We definitively know about the problem, which is the fact of people getting lost while they are in social events, a concert specifically at this point. We knew the app must have the quality of being a location-based system, which is a software application used to locate people. The app will be used in a circle of friends, so it will restrict the use to users of the app, who give the company their personal information. Also, it will give a sense of privacy. Also, we defined in this stage that our target market must be Generation Y, because these people love technology and they are accustom to attend social events. In addition, we created a survey to know if the idea could be a good idea among the Generation Y (Refer the Marketing plan below for more information).
Marketing strategy development:
According to Kotler, P. "The Marketing strategy development relies on designing an initial marketing strategy for a new product based on the product concept" (p.268). It means that all marketing strategies must be tested, objectively, in order to develop the new product. Target market must be established after the survey, features of the product must be developed, and financial analysis must be examined in detail to know if the new product will be economically efficient in short and long-term goals.
For instance, in our Marketing plan, we knew, after survey's results, that Generation Y will be our target market. Then, we decided that our product's features will include a constant tracking location, a history of three previous locations, a circle of friends would be accessible to implement, a panic button, and an online customer service will function 24/7. Also, we decided that those features would be part of a free primary account, but we would provide it with more features in a premium account, which will cost $3.95 monthly.
In order to find the features that we will include in the premium account, we learned from competitors. So, a battery life saver arrived to our minds, because it is the most worst weakness of competitors.
A value proposition of our new product, which we called HereHere, will relies on the idea of giving users a sense of security, peace of mind, and avoid getting lost from their groups of friends. Also, we decided that the break-even point will be when we sell 154,433 premium accounts, which represents $610,012.13 that we expect to obtain in the first three months after a launch of one year (Please refer to the Marketing plan attached below to get more information).
Business analysis:
According to Kotler, P. "Business analysis relies on a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives" (p.269). This stage relies to the confirmation that the new product would be financially successful. This confirmation is made through the review of the marketing plan, especially of the financial section. HereHere, our app, didn't pass for this stage, but you can refer to the link of the marketing plan below so that you can have a great sense whether this product would be a successful one in the market.
Product development:
According to Kotler, P. "Product development relies on developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering" (p.269). It means to make the new product physically. HereHere was not made. but we design a picture to see how the app would seem on the screen of a cell phone. Please see below and open the link HereHereimages so you can appreciate how it would look like.
Test marketing:
According to Kotler, P. "Test marketing is the stage of new-product development in which the product and its proposed marketing program are tested in realistic market setting" (p.270). This stage relies on the first time when the new product is introduced in the market. The first months are like a testing period, which can define if the new product would be positioning easily among the target market. I can appreciate that the first three months of HereHere app in the market would be definitively the clue to see if our app would be easily positioned. The decision of offering a primary account for free relied on the idea of facilitating our app being easily accessible for everyone. We know that this new product would be listed in the preference of the users.
Commercialization:
According to Kotler, P. "Commercialization is the stage while introducing a new product into the market" (p.271). Commercialization is the last step where a new product is finally introduced formally into the market. My Marketing team and I think that HereHere app could be introduced into the market after the first year of launching (Please, refer to the Marketing plan attached below for more information).
References
Kotler, P., & Armstrong, G. (2014). Principles of Marketing. Upper Saddle River, NJ; Pearson.
Links:
herehereimages.docx | |
File Size: | 331 kb |
File Type: | docx |
team_7_final_marketing_plan.docx | |
File Size: | 472 kb |
File Type: | docx |