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chapter

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The need to move money and make payments (e.g current accounts, ATMs, debit cards).

The need to earn a return on money (e.g savings account unit trusts).

The need to defer payment or advance consumption (e.g loans, credit cards, mortgages).

The need to manage risk (e.g life insurance, general insurance).

The need for information(e.g share price information services, product information).

The need for advice or expertise (e.g tax planning, Investment planning, IPO services).

What Customers want

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Core

Tangible

Augmented

Potential

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Al-murabahah

Al-mudharabah

Al-Ijarah

Qard Hasan

Amanah and Al-wadiah

Al-Kafalah

Takaful

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Management of existing product lines

Product range management

Consumers

Competitors

External environment

Internal factors

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The first deal with decisions about features to aparticular product.

The second deals with product line management

This covers two broad areas:

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Customers assess services quality from both the technical and functional aspects.

Technical (or outcome) quality -Is concerned with how the product performs (e.g does a capital growth investment trust provide an acceptable rate of capital growth?).

Functional or (process) quality –Is concern with the way in which the service is delivered and might Include factors such as the way staff behave towards customers, and the speed of response to questions.

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Product modification is concerned with changingthe attitude of a product to make it more attractiveto the market.

Product development involves creating a new variant of an existing productIt is typically associated with either product line stretching or product proliferation.

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This ensures that the range is up-to-date, innovative

And meets changing consumers need.

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Major innovations-These are products new to both the organization and the market. Major innovations are thus rare in financial services.

New service lines-These refer to products new to the organization but not to the market.

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NPD Strategy

Idea Generation

Idea screening

Developing and Testing

Product Launch

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To be oriented towards taking advantage of newmarket segment.

Seen as crucial to the continued competitivenessof the organization.

Required to maintain profitability

Designed to reduce excess capacity or even outfluctuating demands.

Generated from both inside and outside

Generated internally from specialized NPD teams and employee feedback or suggestions

Externally, generated based on customer feedback, market research

Specialist new product development agencies or byImproving on the competitors efforts.

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This means deciding, in advance, on a set of criteriafor idea evaluation. The criteria used are likely to Include the following: oDoes the idea fit the organization's strategy?

oDoes the idea fit the organization's capabilities?

oDoes the idea appeal to the right market segments?oIs the idea viable in terms of cost and profit?

It is common to test this newly defined productto identify consumer and market reactions This will help to make the necessary product modifications, If any before it is launched.