Product Development is Waste Money - Essay Example

Your product development is waste money, discuss. The creation of products with innovative or special characteristics that offer up-to-the-minute or additional benefits to the customer. Product development may rivet modification of an existing product or its presentation, or formulation of an lock, stock and barrel new product that keep happy a newly definite customer want or market niche. New products, whether they take the shape of innovations or entirely new goods, and new applications are an important module of business success. What this means is that new products are important to survival. "Innovate or die" has turned out to be public meetings cry at small and large businesses as more and more consumers demand the newest and the best products. As one industrialist in the bicycle manufacturing industry told Nations Business, "At trade shows, the opening sentence of a customer is, Whats new? Every year you have to elevate the gamble. If you were not to do it, you would be left in the dirt”. There are eight steps involved in the product development. First, the ideas are generated inside and outside the organization. These ideas are then screened through and the best ones are chosen. Once the best idea is chosen, the concept is tested with the audience. The next step is developing the perfect marketing strategy. Now that the company has a great idea and marketing strategy is feasible, there comes the most important part that is Business Analysis. The cost and benefit of launching new features in an existing product or launching a new product altogether are weighed. Finally comes the stage where the prototype of the product is created. Now, the product is tested in the market that is most suitable for the product. If the market testing turns out to be a success, the product is officially launched at a national level. Frequently, the product development turns out to be a failure and a huge amount of money of the company is sunk. It is not necessary that the every time a new product development made turns out to be money wastage. If the product is launched at the right time in the right market then it can be a huge success. Most of the research into new PD has been confined to industrial or business-to-business markets and has emphasized studies of the development process for new physical process for new physical goods according to Christopher Lovelock. He argues that ‘Without an understanding of the marketplace, knowledge about the customers and knowledge about the competitors, it is very unlikely that a new product will be a success.’ The three factors causative most to the success of the product development, in order of importance are: 1. Marketing Strategy: The new product fit well within the existing image of the firm, provided a superior advantage to competing products in terms of meeting the needs and wants of the customers and received strong feedback during and after the launch. 2. Organizational Factors: Development personnel need to be fully aware of the fact why they are involved and of the importance of the new product development to the organization. 3. Market Research Factors: It is very important that detailed and significantly designed research is carried during the development process or else it would lead to a complete failure and money wastage Conclusion: The NPD is a highly costly process for a business. Slightest mistake during the research and at the time of rolling out of the product can actually make a firm shut down. On the other hand, if the customers appreciate the product launch, the business will for sure touch new horizons. How can pricing help to achieve marketing and sales strategy? To settle on an effective pricing strategy, a firm has to have an excellent understanding of its costs, the value fashioned for customers, and competitor pricing. Defining costs tend to be more easily said than done in a service business than in a manufacturing business. Without a good quality understanding of costs, managers cannot be sure that the prices set are, in fact, adequate to recover all costs. Another challenge is to speak about the value that customers give in a service to the price that they are prepared to pay. This step requires an accepting of other costs that the consumer may be acquiring in purchase and use, counting such nonfinancial costs as time and effort. Managers also need to be familiar with that all customers, offering the potential to set different prices for different marketing segments, may not respect the same service in the same way. Competitor pricing cannot be compared dollar for dollar. Services tend to be location and time specific, competitor services have their own set of related monetary, and nonfinancial costs, sometimes to the extent that the process charged become secondary for competitive comparisons. Competitive Pricing needs to take into account all these factors. Revenue Management is a commanding tool that helps to manage the demand and price in different segments closer to their proviso prices. Well-designed substantial and nonphysical rate boundary marker help to define ‘products’ for each target segment. However, great think about has to be taken in the way revenue management is put into practice so that customer satisfaction and supposed fairness are not finding the middle ground. A pricing strategy must take in hand the innermost issue of what price to charge for selling a given unit at a finicky time. Because intangible goods frequently combine multiple elements, therefore, pricing strategies need to be highly imaginative. Finally, firms need to be very cautious in case pricing schedules become so multipart and thorny to compare that they simply bamboozle customers. A policy of intentionally creating confusing prices schedules, counting hiding certain costs that become noticeable to customers only after usage is likely to show the way to allegations of unethical conduct, loss of confidence and customer disappointment. These authors argue that companies must do even more than put together Sales and Marketing to effectively look forward to and satisfy customers’ needs. Their proposition? Develop a customer association management structure that enables all parts of the organization to contribute to and read between the lines of customer information. Conclusion: Price is the most important component in the marketing mix (next to the item for consumption, of course). From the marketers standpoint, an effectual price strategy is one that puts up the shutters to the greatest that customers are willing to pay. Reference: Lovelock, C, and Wirtz J, ‘Services Marketing’, People, Technology, Strategy, Edition. 5. Pp. 121-174 Read More