new roduct development & product portfolio

8/9/2019 New roduct development & product portfolio

1/4

Name : Farah Shazana Muhammad Hisham

Class : M08A

a) Describe the 5 stages of NPD.

The first stage in the new product development is idea generation. This stage

is where idea to put adding value to a product is being generated. The next

stage is idea screening. The ideas generated are screened for implications

whether the ideas are relevant for the product development or not. For

instance, the ideas are screened to cover issues such as resources and

finance to develop this new product. This stage is followed by the product

development and testing stage. This involves the production of prototype and

test marketing for potential customers. This is where feedbacks from these

potential customers are crucial for the firm to allow it to assess the possible

reactions to the new product and to further the firms marketing mix in order

to sell the developed product successfully. The prototype would be altered

until final product is produced. After that, the product has to undergo the

business analysis stage where management will view into the legal, financial

and resource viability to launch the new product. The final stage is the

commercialization ( on what scale?)- use the diifusion process as a

justification! of the develop product or the launching of the product. The

product will be distributed to retail outlets and various promotional

campaigns will be done to commercialize the new developed product. During

this stage, the firm is most likely to create awareness among potential

customers about the existing of the newly developed product.

5 marks

b) Discuss the problem of financing R&D in an era of rapid technology changes.

The major drawback of funding the R&D in the fact paced technological era is

it the product will become outdated fast. This is because when newly

developed product has just been launched, it will take only a short time for

other firm in the market to come up with a better and developed product dueto the advancement of technology. Besides that, manufacturing process

becomes simpler and faster. Thus, it is highly probable for a firm to produce

in the quantities required faster and more cost efficient, something that is

unattainable back then, .so how this un-avail the finance?? Internal finance

& lenders???. Another problem of financing R&D is the financial or cost

constrain. This is because, the development of products during this era is

more expensive compared to that during the yesteryears. As technological


2/4

boundaries have been pushed forward, the cost of even modest new product

development has risen sharply due to the more advanced utilities and

research. In fact, new discovery is made each day through research and the

cost of carrying out research that is only useful for a temporary period is just

not worthy. Another constrain is, rapid technology change also means rapid

change of customers tastes because people nowadays are easily bored withproducts. People are not as loyal to a product as they used to. It means that

the products have increasingly shorter life spans. This means the less time is

available to recover the development cost and at the end, the firm is unable

to compensate for the money invested to develop the product.The answer is

to the problems of R&D innot problems of financing.be careful to look

at the key phrases.. 5/8

c) Analyse the effects of having a balanced product portfolio.

A balanced product portfoliodescription!! is important as it helps the

managers to determine strategy of the firm. A firm that is able to adapt to

the changes of the consumers behaviour and also the external changes is

the firm that stands a chance of doing well in the market. Hence, firm that

owns a diverse and balanced product portfolio is the market leader???.

Besides that, by increasing(widening???) the product mix and the product

ranges, the firm can generate more revenue and spread it risks. Moreover,

the firm can enjoy the risk-bearing economies of scale. This kind of firm

called conglomerate can spread its fixed costs such as advertising or

research and development across its wider range of operations( good

analysisfacts and its consequences are developed. Unfavourable trading

conditions for certain products or even industries can be offset by more

favourable conditions in other better products such as cash cows or

sometimes stars products. (However)evaluation/ balancing point, the costs

and complexities in maintaining the diverse and balanced product portfolio if

far easier said than done. This is because different products require different

sets of marketing mix. Although the portfolio is balanced, all products cannot

be marketed in the same way. In order for a firm to remain competitive, it will

have to plan in detail on the product strategy, like applying NPD while

managing a balanced product portfolio. However, a balanced product

portfolio can be a part of the extension strategies for certain mature product.For products at the maturity and saturation stage, the firm has to prolong the

time for it to retain the high sales and to delay the declination of the

products. Therefore, as one product declines so other products are being

developed and introduce to take place. Thus, the cash flow should be

reasonably balanced because there are products at every stage at the


3/4

product life cycle. Almost a full/ balanced analysis, but the tools of product

p/folio at all not mentioned!!! 5/7

d) Discuss the importance and roles of branding

Name sign logo symbol slogan identity differentiation legal protection price

inelastic packaging price promotion distribution individual brand family brand

Branding is the form of differentiating a firms product from those of its

competitors and a brand refers to a name that is identifiable with a product of

a particular business. The first role of branding (is branding as a logo)cant

agree with you!!!. Logo can be a form ofsymbol, sign or even catchy slogan.

Visual representation is very important as it can help break the international

barrier. This is because although the people do not comprehend the

languages, the sign and logo of the brand are universally accepted by

customers around the world. Logos .brandingggggare also vital sources of

differentiation. Besides that, logos can also reduce the cost of a business to

advertise the brand. For instance, brands are often abbreviated instead of

having a lengthy brand as it is cheaper promotion that way. Another

importance is branding also acts a legal instrument. Since the branded

product is now a household name in its market, the distribution of the

product is wider and the firm is able to generate more revenues as more

customers can be gained. Legal identity of a product can be created by

providing it with one of a kind and familiar name and image of theproduct..advantage of having a brand as a legal protection!!!!!. Another

form ofdifferentiation..repetition, branding makes the product distinct from

other products and can serve to meet the physiological needs of employees,

suppliers and customers. Besides that, branding provides legal advantages

and lawful ownership of the product as any other products cannot be named

or adopting the same brand as other product. The copyright protection helps

prevent fraud and illegal branding. Next, branding is also a sale generator.

This is because branding can reduce the price elasticity of demand and the

product is price inelastic since customers are less sensitive to changes in

price. This is because, branded products as seen as better and superior, evenwhen the price charged is higher. Consequently, the firm can earn high sales

revenue since the firm is able to charge a high price and at the same time

retain the loyalty of the customers. Another role of branding is to create

customer royalty. The branded goods can make the customers feel satisfied

and happy to buy the products. Hence, the packaging of the product shall

includes the brand names also as customers can be more aware with the

product. Individual brand may attempt to brand individual products with


4/4

individual brand names. This can help the individual brand to be developed

for its market segments. Also, failure by one brand will not have an adverse

effect on the others. Family brand means a business which uses only a brand

name for different products. The importance of this strategy is the marketing

campaign can be spread across a range of products and the firm can enjoy

marketing economies of scale. Besides that, a customer who might hasbought one product but as the sense of loyalty and confidence on the brand,

the customer will buy other product under the same name. needs better

structure___( Defin of branding, then roles..facts and consequences &

limitations). Overall, partial discussion.limitations of branding??? 5/10

Total 20/30

new roduct development & product portfolio

Documents