The Islamia University od Bahawalpur (Pakistan)

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2. JAWWAD HASSAN JASKANI
ROLL NO 12
STUDENT MBA
THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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3. Product and
Service Development

4. 4
Topic
Product
Product development process

5. What is a Product?
A product is anything that can be
offered to a market for attention,
acquisition, use or consumption
that might satisfy a want or need
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6. What is new product?
 A product that is entirely new in
market
 A product that adapts up or replace an
existing product
 Old product in new market
 Old product packaged in different way
 Old product marketed in new way
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7. New product development
Is a process which is design to develop, test and
consider the viability of product which are new to the
market in order to ensure the growth and survival of the
organization
Development of original products, product
improvements, product modifications, and
new brands through the firm’s
own R & D efforts.
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8. Why we develop new product?
 To add to product portfolio
 To create star and cash cow for future
 To replace the declining product
 To take advantage of new technology
 To maintain /increase market share
 To defeat rivals
 To keep up with rivals
 To make competitive advantage
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9. Product Development Process
 A Product Development process is
the entire set of activities required to
bring a new concept to a state of
market readiness.
 A design process is the set of
technical activities within a product
development process. It does not
include business, financial, or
marketing activities.
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10. An Organized New Product Development Process is Critical
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11. Step 1: Idea Generation
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12. Step 2: Screening
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13. Step 3: Idea Evaluation
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14. Step 4: Development
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15. Step 5: Commercialization
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16. Topic
Difference between product and
Services
Activities, Reasoning and objectives of
product design
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17. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
New Service or Product Development
Design
Analysis
Development
Full Launch
 Service or
product not
profitable
 Need to rethink
the new offering
or production
process
 Post-launch
review

18.  Major factors in strategy
◦ Cost
◦ Quality
◦ Time-to-market
◦ Customer satisfaction
◦ Competitive advantage
Product and Service Design

19.  Tangible – intangible
 Services created and delivered at the
same time
 Services cannot be inventoried
 Services highly visible to customers
 Services have low barrier to entry
 Location important to service
Differences Between Product
and Service Design

20. Product or Service Design Activities
 Translate customer wants and needs into
product and service requirements
 Refine existing products and services
 Develop new products and services
 Formulate quality goals
 Formulate cost targets
 Construct and test prototypes
 Document specifications

21. Reasons for Product or Service Design
 Be competitive
 Increase business growth & profits
 Avoid downsizing with development of
new products
 Improve product quality
 Achieve cost reductions in labor or
materials

22. Objectives of Product and Service
Design
 Development time and cost
 Product or service cost
 Resulting product or service quality
 Capability to produce or deliver a given
product or service

23. 23
Topic
New product development
process

24. Life Cycles of Products or Services
Time
Incubation
Growth
Maturity
Saturation
Decline
Demand

25. Product Life-Cycle Strategies
 Product
development
 Introduction
 Growth
 Maturity
 Decline
 Begins when the
company develops
a new-product idea
 Sales are zero
 Investment costs
are high
 Profits are negative
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PLC Stages

26. Product Life-Cycle Strategies
 Product
development
 Introduction
 Growth
 Maturity
 Decline
 Low sales
 High cost per
customer acquired
 Negative profits
 Innovators are
targeted
 Little competition
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PLC Stages

27. Marketing Strategies: Introduction
Stage
 Product – Offer a basic product
 Price – Use cost-plus basis to set
 Distribution – Build selective distribution
 Advertising – Build awareness among early
adopters and dealers/resellers
 Sales Promotion – Heavy expenditures to
create trial
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28. Product Life-Cycle Strategies
 Product
development
 Introduction
 Growth
 Maturity
 Decline
 Rapidly rising sales
 Average cost per
customer
 Rising profits
 Early adopters are
targeted
 Growing
competition
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PLC Stages

29. Marketing Strategies:
Growth Stage
 Product – Offer product extensions, service,
warranty
 Price – Penetration pricing
 Distribution – Build intensive distribution
 Advertising – Build awareness and interest
in the mass market
 Sales Promotion – Reduce expenditures to
take advantage of consumer demand
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30. Product Life-Cycle Strategies
 Product
development
 Introduction
 Growth
 Maturity
 Decline
 Sales peak
 Low cost per
customer
 High profits
 Middle majority are
targeted
 Competition begins
to decline
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PLC Stages

31. Marketing Strategies:
Maturity Stage
 Product – Diversify brand and models
 Price – Set to match or beat competition
 Distribution – Build more intensive
distribution
 Advertising – Stress brand differences and
benefits
 Sales Promotion – Increase to encourage
brand switching
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32. Product Life-Cycle Strategies
 Product
development
 Introduction
 Growth
 Maturity
 Decline
 Declining sales
 Low cost per
customer
 Declining profits
 Laggards are
targeted
 Declining
competition
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PLC Stages

33. Marketing Strategies: Decline
Stage
 Product – Phase out weak items
 Price – Cut price
 Distribution – Use selective distribution:
phase out unprofitable outlets
 Advertising – Reduce to level needed to
retain hard-core loyalists
 Sales Promotion – Reduce to minimal level
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34. Topic
Project team
Investment and Development cost
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35. CREATING A PROJECT TEAM
 Every potential new product or service requires a dedicated
development team.
 creating your team you need to include people with a variety
of skills.
 All team members should understand your business' objectives and
be committed to them.
 There are many forms of effective team working and the right one
for you will depend on your business' needs. For example, team
members might:
 work as a unit dedicated to one project, reporting to a project
manager
 work exclusively on one project but remain in separate departments
reporting to department heads who are under the project manager
 work on several projects at once with both a department head and
project manager to monitor progress
 Teams need someone in a project management role to lead, co-
ordinate and motivate the team.

36. INVESTMENT
&DEVELOPMENT
 New products and services is an naturally risky process.
You must plan any investment carefully and strictly
control your costs.
 Factors considering in future investment.
 plan exactly where this investment will be directed.
 justify the expenditure on every project.
 Manage your cost.
 Before making investment decisions, consider how
much your business stands to gain from a completed
product or service. Weigh this against the risks you
face.
 Phasing new product development.
 One way to minimize your risks is to phase investments
in projects. By reviewing a project at the end of each
phase or stage of development.

37.  A range of government grants and tax breaks is available for
research and new product development.
 It's essential to keep a close eye on costs when you develop
new products and services to control cost. You should:
 estimate development costs in advance.
 monitor expenditure throughout the development process
 introduce phased investment.
 There are two main ways to estimate costs:
 a top-down approach where you consider previous
comparable projects and use them as a benchmark
 a bottom-up approach where all team members agree on
the costs they expect to incur with one project manager, who
will then estimate the total cost
 Remember that your costs could include staffing, materials,
technology, product design and market research.

38. 38
Topic
Standardization

39. Standardization
 A uniform identification that is agreed
on is called a standard
 Two types exist:
◦ Industrial standardization --- the process
of establishing agreement on uniform
identifications for definite characteristics
of quality, design, performance, quantity,
service, and so on
◦ Managerial standardization --- deals with
such things as operating practices,
procedures, and systems
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40. • 100% standardization is rare
• Usually starts with a core product as the
foundation
• Various features are added, these may differ
according to the country market
• Can also involve modular design, where various
features are packaged as modules, different
assembly combinations in different markets
What to Standardize?
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41. Advantages of Standardization (Cont’d)
 Fewer parts to deal with in inventory &
manufacturing
 Reduced training costs and time
 More routine purchasing, handling, and
inspection procedures
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42. Advantages of Standardization
 Orders fill able from inventory
 Opportunities for long production runs
and automation
 Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.
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43. Disadvantages of Standardization
 Designs may be frozen with too many
imperfections remaining.
 High cost of design changes increases
resistance to improvements.
 Decreased variety results in less
consumer appeal.
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44. Topic
Analysis
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45. ANALYSIS
7 questions you must ask before
launching a new product

46. Is my business already on a solid
foundation
?

47. What is the size of the market
?

48. How should I price it
?

49. How much revenue can I expect to
generate within a specified time
period (usually one year)
?

50. What will it take to realize this
additional revenue and profit
?

51. Where is the break even point and
what is the potential profit
?

52. Is this new direction in line with my
overall Business Vision and Long
Term Goals
?

53. CONCLUSION
 The conclusion of this overall topic is
to develop a product requires
◦ Its designing
◦ Analysis of market as well as its cost and
required investment
◦ A very fine development process
◦ And finally its publicity and its approach to
the target population