Week 5 Project

Stages of the New Product Development Process

© 2016 South University

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Marketing Management

©2016 South University

2 Stages of the New Product Development Process

Week 3 Lecture 2

The product planning and development process is a systematic approach that the firm must undertake while designing, developing, and launching new products. Once marketing managers have used marketing research to understand the needs of their target market, they need to create a new product development process based on the research.

The new product development process consists of five stages:

1. The first stage is to generate ideas. This is where research plays a critical role since the needs identified in the target market provide the inspiration for new product ideas.

2. The next stage is to screen the ideas. Here, the consumer panel plays a key role in providing feedback on the ideas.

3. The next stage is the actual development and testing of the product. Again, the consumer panel plays a key role in field-testing the product and providing feedback to improve the product.

4. The next stage is to test-market the product before its commercial launch. In this stage, marketing managers often use focus groups to get feedback on the product in the test market.

5. Finally, the product is launched, and the process starts all over again for a new product.

The product mix is the width and depth of a firm’s product line. In the two scenarios provided, select the width of the product line.

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Marketing Management

©2016 South University

3 Stages of the New Product Development Process

Week 3 Lecture 2

The width of a product line means the variety of similar products a firm offers. For example, Ford Motor Company offers a width of products, from small economical cars to large trucks. On the other hand, the depth of a product line means the number of variations of a product offered by a firm. Ford Motor Company also offers several different pickup truck models, from the small Ranger to the large Ford 350. The combination of the width and depth of a firm’s product line constitutes its offering to the marketplace. A firm increases the width and depth of its product line so as to serve new market segments and better serve existing customers, respectively. Both width and depth are critical to the success of a firm. For example, in addition to motorcycles, Harley-Davidson offers its customers leather jackets, boots, and other related products favored by Harley-Davidson riders.

The combination of the width and depth of a firm’s product line constitutes its offering to the marketplace. : A firm increases the width and depth of its product line so as to serve new market segments and better serve existing customers, respectively. Both width and depth are critical to the success of a firm. For example, in addition to motorcycles, Harley-Davidson offers its customers leather jackets, boots, and other related products favored by Harley-Davidson riders.

At other times, increasing the width of the product line involves developing flanking brands. A firm develops flanking brands to serve the needs of different segments of the markets it is serving. Coca-Cola is a good example of this type of branding strategy. The Coca-Cola Company offers a variety of soft drinks. Its flagship brand, Coca-Cola, has variants such as Coca-Cola, Cherry Coke,

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Marketing Management

©2016 South University

4 Stages of the New Product Development Process

Week 3 Lecture 2

and Diet Coke. The company also offers flanking brands, such as Sprite, Orange Sunkist, Mr. Pibb, and Fanta, to increase the width of its product line.