New Product Development - Essay Example

Target Market Strategy Introduction Depending on which phase the small business is in, an appropriate strategy is applied. During the period of creative evolution, all energies are concentrated in making and selling a new product (Greiner, 1972, 41- 42). Strong management skills and strong leadership styles are needed during this period to answer to the needs of the customers as they react to the new product being introduced. One must focus on the strengths and competencies in the market niche one is targeting to firmly establish a particular strategy to ensure a successful move for the business firm. The differences in the application of a concept of strategy to a modest small business mean that the ability to conceive of a business in strategic terms must be evaluated in terms of the owners’ goals for the firm. Those involved in the strategic process should be concerned with how a strategy can be evaluated so that it may be continued, amended, or abandoned as appropriate. In this regard, this essay is written with the objective of describing a new product which will serve two business markets. The discourse would proffer the strategy for entering the markets, and likewise, would analyze the potential barriers one may encounter. Finally, a plan to ensure that the product will be successful given the market strategy would also be explained. New Product The product envisioned for creation and development is custom-tailored shoes for those who are physically disabled (especially for diabetic patients, those who were recently amputated with one leg, and those under podiatric treatments) under all age ranges. A range of soft-molded shoes made from various materials would be offered in actual samples and shown in brochures for purchase orders. These brochures would be made available to health care organizations, as well as retail merchandisers, for ordering and pre-selling. There have been several studies confirming the need for appropriate footwear for podiatric patients. These studies provided the impetus for establishing the need to design a new product specifically made for patients with foot disabilities. For purposes of simplicity, it is presumed that all critical aspect of new product development have been undertaken (idea conceptualization based on customers’ needs, product and brand positioning, concept testing, prototypes have been designed, limited production tested prior to full production and implementation). Target Markets The two business markets identified and targeted for the new product are the health care organizations (particularly focusing on podiatrists and internal medicine professionals attending to diabetic patients) and retail merchandising organizations with specialty shoes sections. Podiatrists and diabetic specialists are the most qualified and authoritative persons in the position to advice patients of the accurate specifications for the correct type of footwear (including materials and style) for patients with foot problems. On the other hand, retail merchandisers with specialty shoes sections are potential markets for custom made shoes which have been frequently ordered and tested by patients with foot problems. Strategy for Entering the Markets The marketing strategy for new products should be categorized in three parts: (1) focus on the potential size, structure, behavior of the target markets with the intended positioning of the specialty shoes for patients with foot problems, and the sales, market share, and profit goals being projected for the first few years; (2) outlining of the intended product price(s) depending on the materials used, style, and sizes; distribution strategy, and marketing budget for advertising and promotions for the first few years; and (3) projecting the intended long-run sales and profit goals, as well as the marketing mix strategy over time (Kotler, 1980, 324 – 325). The product would carry a brand name “Extreme Footcare” to denote the benefit that the shoes would give to the customers. The shoes would be packaged in a shoebox which is sturdy but economically made and conforming to environmental requirements. Having explained the details of the product and the place (target markets), the promotional activities projected for the specialty shoes are direct sales through personal visits and brochures to health care organizations and advertisements (local newspapers). The selling point would be: “foot care for your special feet’s unique needs”. The price of the shoes would be a little bit higher that conventional shoes due to the custom made provision and the materials to be used to cater to the needs of the patients. Potential Barriers Pursuing growth means being able to conquer barriers or constraints to achieving organizational goals. From among the identified barriers to growth, the following factors are the most prominent: (1) financial budget, (2) level of demand of the product or service in the market, (3) managerial and human resource skills, and (4) increasing competition, among others. (Storey 1994, 155) The critical factor for a small business is to identify which constraint prevents it from pursuing its goals to grow and succeed. By being able to address these barriers, a small business would be able to develop the appropriate growth strategy and ensure its success in its well identified market niche. Plan to Ensure Success Given the abovementioned marketing strategies for the new product, the following activities would be implemented to ensure its success: (1) conduct an adequate market analysis of both the health care clientele and the retail merchandising industry; (2) upon first testing, improve the product after solicitation of feedback from the first few customers who availed of the products; (3) monitor the promotional activities and determine the need to change, add, or delete any of the advertising and promotional endeavors, as required; (4) keep track of cost of sales to determine if budgeted financial statements need to be revised given actual revenues and costs of production; (5) determine the reaction of competitors and adjust one’s strategy as needed; (6) determine any technical problems in production, if any and address them accordingly. Conclusion Knowledge of the steps in decision making is not an assurance that the decision maker would choose the most appropriate alternative in all circumstances. It only serves as a guide for decision makers to consider all relevant factors before coming up with the most appropriate choice. The most important lesson one must be aware of is that individuals and groups learn from the experiences that they encounter. Scenarios requiring solving problems should be taken as opportunities to enhance one’s skills and strengthen one’s abilities to face whatever challenges the future brings. The critical area that new product developers must be aware of is the need to adjust to the demands of the changing environment. The 4Ps in marketing would assist the entrepreneur in making strategic decisions regarding his business. One should always evaluate the product, place, price and promotion when deciding which particular option would be undertaken. Works Cited Greiner, L.E. “Evolution and revolution as organizations grow – a company’s past has clues for management that are critical to future success”, Harvard Business Review, July-August, Vol.50 (4): P.37-46. 1972. Web. 30 June 2010. < http://www.ncbi.nlm.nih.gov/pubmed/10179654> Kotler, Philip. Marketing Management: Analysis, Planning and Control. Prentice Hall, Inc. New Jersey, USA. 1980. Web. 30 June 2010. < http://www.amazon.com/Marketing-Management-Analysis-Planning-Implementation/dp/0132435101> Storey, D.J. Understanding the Small Business Sector. Cengage Learning EMEA. Routledge, London. 1994. Web. 30 June 2010. Read More