A study on

NEW PRODUCT DEVELOPMENT DECISION-MAKING IN GLOBAL

VIRTUAL TEAMS PROJECT IN A COMPANY

Global Virtual Teams Project

Submitted to

AURORA’S BUSINESS SCHOOL

In partial fulfillment of the requirements for the award of

Post Graduate Diploma in Management (PGDM)

By

SHUBHAM VOHRA

DM-16-010

2020-22

Aurora’s Business School,

Near NIMS, Punjagutta, Hyderabad. - 500 082

Tel: 040 2335 1891/92, 2335 0061/62 URL: www.absi.edu.in e-mail us: info@absi.edu.in

APRIL, 2022

1
 AURORA’S BUSINESS SCHOOL
Date:

Place: Hyderabad

Certificate
This is to certify that the research work embodies in the present thesis entitled as ‘A STUDY
ON NEW PRODUCT DEVELOPMENT DECISION-MAKING IN ‘GLOBAL VIRTUAL
TEAMS PROJECTS IN A COMPANY’ has been carried out by MR. SHUBHAM VOHRA
Roll No: DM-16-019 under my supervision, for a period of thirty days as a part of GLOBAL
VIRTUAL TEAMS PROJECT (GVTP) of the Post Graduate Diploma in Management
(PGDM) of the Aurora’s Business School .

I hereby declare that to the best of my knowledge that no part of this thesis has been
submitted earlier for the award of Degree at any other Institute or University.

Supervisor (GVTP) Co-ordinator Director

Aurora’s Business School,

Near NIMS, Punjagutta, Hyderabad. - 500 082

Tel: 040 2335 1891/92, 2335 0061/62 URL: www.absi.edu.in e-mail us: info@absi.edu.in

2
 Date:

Place: Hyderabad

DECLARATION

I hereby declare that the project research embodied in the present thesis entitled ‘A STUDY
ON NEW PRODUCT DEVELOPMENT DECISION-MAKING IN ‘GLOBAL VIRTUAL
TEAMS PROJECTS IN A COMPANY’ is an original research work carried out by me under
the supervision of Prof. C. Kameswary, Faculty, Aurora’s Business School in partial
fulfillment of the requirement for the award of the degree of Post Graduate Diploma in
Management.

I declare that to the best of my knowledge that this thesis or a part of thereof has not been
earlier submitted for the award of degree at any another Institute or University.

Signature of the Candidate

SHUBHAM VOHRA

ROLL NO- DM-16-019

BATCH - 2020-2022

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 ACKNOWLEDGEMENTS

I would like to thank everyone who is involved in helping me in producing this project report
by bringing out creativeness in this project.

I would like to take this opportunity to thank my Project guide Prof. C. Kameswary, Faculty,
Aurora’s Business School, for his/her undeterred guidance for the completion of the report.

My parents need special mention here for their constant support and love in my life. I also
thank my friends and well-wishers who have provided their whole hearted support to me in
this exercise. I believe that this effort has prepared me for taking up new challenging
opportunities in future.

SHUBHAM VOHRA.

4
INDEX

SL. NUMBER CONTENTS PAGE NUMBERS

1 INTRODUCTION
6- 27

2 LITERATURE REVIEW
28-31

3 LAUNCHING OF PRODUCT IN TO THE

32-37
PRODUCT

PLAN FOR THE SUCCESSFUL LAUNCH OF YOUR

4 NEW PRODUCT
38-42

5
43-45
CONCLUSION

5
INTRODUCTION

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INTRODUCTION

New product development is part of company strategies that allow companies to deliver the
essential value propositions to the customers on a perpetual basis and meet the desired growth.

Products that are really innovative, i.e. truly unique. In recent years due to technological
breakthroughs, there is a flood of new product offerings providing unknown functions and
services. Smartphones, Smart television, I pad, iPhone are performing radically new functions,
serving non-existent, newly created needs.

Replacements that are significantly different from existing products in terms of form function,
and benefits provided. Disposable contact lenses, e-rickshaws, digital cameras are replacing
predecessors as the newer products deliver new or added benefits desired by buyers.

Imitative products that is new to a particular company but not new to the market. The annual
model of automobiles is appropriately placed in this category. In another situation, a firm may
simply want to capture part of an existing market with a ‘me too’ product. Liquid detergent or
flat-screen TV is a new product of this kind.

If buyers perceive that a given offer is significantly different from competitive products in
appearance or performance, then it is a new product. Nowadays anything labelled digital is
especially appealing to customers. Thus, digital has been attached to telephones, televisions,
lights, music etc. Development of such new products have to be considered, planned,
developed, and introduced carefully to the market. Organizations have three main options to
ensure a stream of new products:

Buy finished products from other suppliers, or license the use of other products for specific
periods of time. Develop products through collaboration with suppliers or even competitors.
Develop new innovative products, often through R&D or through adapting current products
through minor design and engineering changes. Whatever the preferred route, the procedure of
new product development adopted by the company reflects its attitude to risk, strategy, product
and market and its approach to customer relationships.

Concept of New Product Development:

A new product is a product that is new to the company introducing it even though it may have
been made in same form by others. In the area of toilet soaps, different brands introduced by
each company are that way, new products as it is new to the company. New products are those
whose degree of change for customers is sufficient to require the design or re-design of
marketing strategies.

Product development is the next step to product planning. Product development is the process
of finding out the possibility of producing a product. It includes the decision as to whether it
would be feasible or not to produce the product and whether it would be profitable or not for
the enterprise to do so. W.J. Stanton, M.J. Elzel and B.J. Walker define ‘new product’ as, “A

7
new product is one which is really innovative which is significantly different from existing and
imitative products that are new to the company.”

If a company once has carefully segmented the market, chosen its target customers, identified
their needs, and determined its market positioning, it is better able to develop new products.
Marketers play a key role in the new-product process, by identifying and evaluating new-
product ideas and working with R&D and others in every stage of development.

The New Product Development Process

The development of new products is complex and involves high risk, so companies usually
adopt a procedural approach. The procedure consists of several phases that enable progress to
be monitored, test trials to be conducted, and the results analysed before there is any
commitment to the market. New product development requires scientific management of two
things: It should be entrusted to a separate group or department. New product development
should be a casual activity, i.e. a new department should be formed and an individual should be
assigned the charge of taking up the task. This process should be managed carefully at all
stages. As a new product is developed, it progresses from the idea stage to the production and
marketing stages. At every stage, the marketer decides about the possibility of moving to the
next stage and seeks the desired set of additional information.

 Generation of a New Product Idea:

The first stage of new product development is the systematic search for new product ideas.
Management at this stage defines the product and its emphasized market(s) and defines the
objectives of developing new products. Companies, however, need to estimate the amount of
effort is devoted to developing breakthrough products, modifying existing products, and
copying competitor’s products. Internal sources and external sources such as customers,
scientists, employees, competitors, channel members, and top management are the major
source of new product ideas.

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Customers: In several cases, customers offer clues that led to new product ideas. Technical
and companies offering products to business users can take new ideas from customers as their
customers are relatively few, firms can follow their use of products closely and solicit
suggestions and ideas to improve these products either by using a formal approach, such as
focus groups, interviews, or surveys or through more informal discussions. The firm’s
development team then works on these suggestions, sometimes in consultation with the
customer. This joint effort between the company and the customer significantly increases the
probability that customers eventually will buy the new product, they might also spread
favourable word of mouth.

Employees, scientists, and engineers, designers: Company’s workforce can be a source of

ideas for improving production and developing new products. Firms innovate to have ways to
motivate their employees to give the best ideas. Many companies are going beyond their formal
research and development departments in order to seek innovative ideas for new product
development. New product idea can come from inventors, patent attorneys, marketing research
firms and it is the responsibility of the development team to give serious attention to each idea.

A new product idea can also emerge from the top management, as in the case of the Tata Nano-
a a small, affordable, four-passenger city car with a rear engine. In metros and towns, a father
drives a two-wheeler with the older child standing in front and the wife holding a baby at the
back is a very common sight and forced Ratan Tata to create a safer form of family transport.
The idea was to offer a safer and affordable means of personal transport to a family of four that
usually used a scooter4.

Competitors: Companies can find good ideas by following the competitor’s products. They
can find out what customers like and dislike about competitor’s products by buying them and
building better ones. Company sales representatives are also a good source of ideas as they
have first-hand exposure to customers and are the first to learn about competitive
developments.

Suppliers and Intermediaries: Suppliers provide information about new concepts, techniques,
and materials for developing new products. Intermediaries like distributors and retailers are
close to the market, they are always in an advantageous position to gauge the market and
provide information about consumer problems, needs, and complaints. An increasing number
of companies, therefore, invest in training and reward programs for their sales representatives,
intermediaries, and suppliers to keep them motivated and also to provide better insights into the
market.

 Idea-Generation Techniques:

Several creative idea-generating techniques can help individuals and groups to generate ideas
by stimulating creativity.

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Attribute listing: technique calls for listing on existing product’s major attributes and then
modifying each attribute in the search for an improved product. For example, replacing the
wooden handle of a screwdriver with plastic and adding different screw heads.

Forced relationships: in this technique, several objects are considered in relation to one
another to create a new product. For example, fit bit watches combines watch, calorie burnt in a
day, and mobile phones into one unit.

Morphological analysis: this method calls for identifying the structural dimensions of a
problem and examining the relationships among them with the hope to generate many new
solutions.

Reverse assumption analysis: in this technique, the company lists all the normal assumptions
about its entity and then reverses them. For example, instead of assuming that a restaurant has a
menu, charges for food, serves food, the new restaurant may reverse each assumption and
decide to serve only what chef has cooked, charge only for how long guest sits at the table and
rent out the space to people to bring their own food.

New contexts: this technique calls for taking familiar processes and put them into a new
context. For example, helping dogs and cats instead of babies with daycare service.

Brainstorming: Group creativity can be stimulated through brainstorming techniques. The

usual brainstorming group consists of six to ten people discussing a specific problem. If done
correctly, such sessions can create insights, ideas, and solutions that would have been
impossible without everyone’s participation. To ensure success, brainstorming requires a
trained facilitator to guide the session, participants must feel free to express themselves, and
participants must see themselves as collaborators. Rules need to be set up so conversations
don’t get off track. Brainstorming sessions must lead to a clear plan of action and
implementation and can do more than just generate ideas.

Mind Mapping: this technique starts with a thought and writes it on a piece of paper, then
thinks of the next thought that comes up, links it to the previous thought, then thinks of the next
association, and does this with all associations that came up with each new word. A whole new
idea will materialize. For example, cafeterias and the internet lead to cybercafés.

 Screening of Ideas:

Companies are able to attract good ideas provided they are organized to do properly. The ideas
being written down and reviewed by the idea committee sort ideas into three groups, viz.,
promising ideas, marginal ideas and rejected ideas. The surviving promising ideas then are
subjected to a full-scale screening process.

The purpose of idea screening is to spot good ideas and drop poor at the initial stage only since
product development costs rise greatly in later stages. In screening the ideas, the company
avoids two types of errors-a drop-error occurs when the company dismisses a good idea and a
go-error occurs when the company permits a poor idea to move into the development and
commercialization.

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New-product ideas are generally described on a standard form for a new-product committee’s
review, where the committee reviews each new-product idea against a set of criteria. The
criteria could be whether the product meets a need, whether a product is consistent with the
companies objectives, strategies, and resources, will the new product delivers the expected
sales volume and profit or not? The company decides about the criteria and chooses to apply
them in the desired manner that they may either prioritize them or may seek fulfillment
together.

 Concept Development and Testing:

An attractive idea must be developed into a product concept. A product idea while is a possible
product the company might offer to the market, product concept is an elaborated version of the
idea which is expressed in meaningful terms addressing consumer needs. A product idea can be
turned into several concepts which represent a category concept, i.e. each position the idea
within a category. This concept defines the product’s competition. For example, a large food-
processing company if gets the idea of producing instant oats, this idea can be turned into
several concepts depending upon who will use this product? The possible consumers could be
teenagers, young or middle-aged adults or older adults. Another concept would be what
primary benefit should this product provide? Taste or nutrition, When will people consume
this? Breakfast, lunch or dinner, Answer of all these questions would lead to several concepts.
The next task is to position the product by communicating and promoting the concept to the
market. In case of oats, the product offers low cost and quick preparation and competes with
cornflakes, toast, eggs, and panrathas. Finally, the product concept in turned into a brand
concept and the brand is positioned in the market.

 Concept Testing

Concept testing calls testing product concepts with the group of consumers. The more the
tested concepts resemble the final product or experience, the more dependable concept testing
is. Companies now a days, design alternative physical products on a computer and view
consumer’s reactions. Some companies also use virtual reality to test product concept through
sensory devices to stimulate reality. Concept testing has special importance in case of
introduction of totally new product in contrast to a ‘me-too’ product.

 Developing a Tentative Marketing Plan:

After testing, the new product manager develops a preliminary marketing strategy plan for
introducing the new product into the market. The marketing strategy plan consists of three parts
that describe in its first part target market size, structure and behaviour, the planned product
positioning and the sales, market share and profit goals. Second part outlines the product price,
distribution strategy and the marketing budget required for the initial years. Last part describes
the sales and profit goals and marketing mix strategy over longer period of time.

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 Business Analysis:

Business analysis stage is of special importance as it will decide whether from the financial and
market point of view, the new product development is worth pursuing or not. Projections are
made with regard to sales, cost and profit to determine whether they satisfy the company’s
objective or not. The demand is estimated at different price levels, sales are forecasted on the
basis of demand estimation and competitive analysis. Costs estimations are made taking into
account cost of transportation, warehousing, promotion expenses, etc. Based on cost and
anticipated sales revenue, breakeven price is calculated and the estimates about sales volume
are made. Once the product concept is found to be feasible it can move to the development
stage.

 Product Development:

Once the product concept passes the business test, it moves to R & D and manufacturing for
physical development of the product which existed only as a word description or a prototype.
This stage since calls for large jump in investments, company determines whether the product
idea can be translated into a technically and commercially feasible product. It must be ensured
by the manufacturing department that the product is easy and safe to use by the customer.

The R&D department generally develops one or more physical versions of the product concept
and the prototypes so developed embody the key attributes as described in the product concept
statement and also within the budgeted manufacturing costs. A successful prototype could take
days, weeks, months or at times years in development. Ready prototypes must be put through
rigorous functional and consumer tests. Functional tests are performed under laboratory and
field conditions so as to deliver the promised product to the consumer. Pharmaceutical
companies conduct clinical trials to test the side effects of their drugs before providing the final
product to medical representatives.

Consumer testing could be done by offering samples to target customer groups and then
following it. Pharmaceutical companies’ sales representatives leave samples of new drugs with
doctors and seek their feedback. Product management team take inputs from the feedback
received through functional and consumer testing and take corrective decisions as and when
required.

 Market Testing:

At this stage the product is ready for a preliminary marketing program in case the product
management team is satisfied with the products functional and psychological performance.
Market testing involves the new product testing in a more authentic consumer settings and
tallows marketer to learn how large the market is and how consumers and intermediaries
respond to handling of the product, using and repurchasing of the actual product.

Not all companies choose the route of market testing. Market test is a risk control tool. When
firms decide on full scale marketing of the product on the basis of the results of the experiment,
it helps avoid costly business errors. The amount of market testing that the product requires
varies with each new product and is done with utmost care as market testing is a costly and

12
time consuming process that may allow competitors to gain advantages. There is investment
cost and risk on one hand and on the other hand marketer has to deal with time pressure and
research cost.

The products involving high investment and high risks where the chance of failure is high,
market testing must be done, however, with low costs of developing and introducing the
product, low company may do little or no test marketing. Although market testing costs can be
high, they are often small when compared with the costs of making a major mistake.
Management, thus, learns what might happen under full-scale marketing and is able to make a
more informed decision about commercializing the product.

 Commercialization:

Favourable results of market testing helps management in deciding to go in for launching the
new product. The launch plan must consider the correct timing, place and strategy decision.
The company launching a new product first need to decide on product introduction timing, and
then make choice about either a first entrant in the market and enjoying first mover advantages
or parallel or late entrant and thereby saving cost of educating the customers.

About where to launch the new product, the company may decide to select whether – in a
single locality, region, several regions, national market or international marked. Most
companies design their new products to sell primarily in domestic market and then expand their
operation in neighbouring countries. There is always a need to develop an action plan for
introducing new product into the rollout markets.

Broadly four aspects are important at this stage:

i. Timing:

A company must decide the exact time of launch of the new product. Several issues come to
fore with regard to timing. For instance, it is no good to launch an air conditioner during the
winter months or a woollen jacket in the summer months. If the new product seeks to replace
an old one, then its launch should be postponed till its previous stocks are exhausted.

ii. Where:

There are two options with regard to geographical strategy of the launch. The company may
choose from full-scale national or international launch or start with a limited area. Going for a
full- area launch requires enormous resources, capital, confidence, and capacity.

Therefore, firms opt for a gradual roll-out starting with one region to the other. Even a well-
endowed company like Apple does not go for a global roll-out of their new products. Apple
products gradually move from North America to other parts of the world.

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iii. Target:

New products do not appeal to all potential consumers equally. People differ in their
receptiveness of new products and ideas. Therefore, consumers with best responsiveness should
be chosen at the launch stage. Technically, the right prospects for any new product or service
are innovators.

Innovators are psychologically inclined to try out new things. The ideal target consumer is the
one, who is an early adopter, heavy user, spreads word-of-mouth communication, and is
accessible at low cost.

iv. How:

This aspect concerns how marketing mix elements are orchestrated. The allocations must be
made to different, marketing mix elements. For instance, what arrangements are made for the
product’s movement from place of production to place of consumption or how the product
would be promoted? How would the campaign unfold? How would it be synchronized with
brand building events

 Product Life Cycle (PLC)

The product life cycle defines the stages that new products move through as they enter the
market, get established and ultimately leave the marketplace and thereby offers marketers
scope for their strategic punning. To say that a product has a life cycle involves four things:

(i) product has limited life;

(ii) product sales pass through four distinct stages, introduction, growth, maturity and
decline during its period of existence, each posting different challenges,
opportunities and problems to the seller;
(iii) profits rise and fall at different stages of the PLC; and product requires different
marketing, financial, manufacturing, purchasing and human resource strategies in
each stage of their life cycle.

The PLC is an important concept as it provides insights into a product’s competitive dynamics.
A companies’ marketing success can be affected considerably by its ability to understand and
manage the life cycle of its products. The length of the life cycle varies among products,
ranging from a few weeks or a short season to several decades. The shape of the sales and
profit curves may vary somewhat among products.

Even duration of each stage may be different among products. Some products take years to pass
through the introductory stage, while others are accepted in few works. Some products,
particularly related to fads and fashion, show a sharp growth and then a sharp decline, others
like steel, cement remain in the maturity stage for a long time, and may never face a decline
due to inelastic demand. Even products like washing machine, refrigerator, television sets,
remain is maturity stage for a very long time until a superior product comes along to replace
them. In virtually all cases decline is inevitable as the need for the product disappear or a

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superior and less expensive product is developed to fill the same need, or a competitor does a
superior marketing job.

Most product life cycle curves are portrayed as bell shaped which are divided into four stages
viz., introduction, growth, maturity and decline. It is quite important that management
recognize what part of the life cycle its product is in at any given time. The competitive
environment and the resultant marketing program will differ depending upon the stage.

Various stages of PLC and their appropriate marketing strategies are as follows:

1. Introduction Stage

The introduction stage starts when the new product is launched. As making product available in
several markets so as to fill the dealer’s pipelines takes time, sales growth is apt to be slow at
this stage. In Indian market Frozen foods took many years before they entered a stage of rapid
growth. The concept of frozen foods was mainly not in sync with Indian food habits of cooking
fresh and therefore it required a change in the mind set of Indian consumers to adopt frozen
food as a new category of food products. Expensive products like high definition television sets
had retarded sales growth due to small number of buyers who can afford the product.

This phase is characterized by high operational costs, mainly due to inefficient production
levels, high learning time, unwillingness of middlemen to deal in new products, extended credit
terms. Due to low sales and heavy distribution and promotion expenses the profits at this stage
tend to be negative or low. Promotional expenditures are at their highest ratio to sales as high
level of promotional effort is required to create awareness about new product, induce trial of
the product and secure distribution in retail outlets. Prices tend to be high due to low costs and
high margins required to support heavy promotional expenditures.

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Marketing strategies during introduction stage requires consideration of each marketing
variable. Since the objective of the marketer at the introduction stage is to create product
awareness and trial for the new product, initially firm offers limited version of the product. It
offers tangible benefits to the customers so that they can switch from existing products to try
the new one. One of the most crucial decisions taken in this stage is pricing strategy for the new
product. The firm opts for either market skimming or market penetration. With the skimming
pricing strategy, firm enters the market with high price, taking advantage of early entry and
relative novelty of the product. High prices help the firm to recover as much profit per unit as
possible. With the penetration pricing strategy, firm goes for low prices aimed at securing
larger market share. Low price encourage rapid product acceptance especially if the market is
highly price sensitive. Distribution strategy during introduction stage should be selective one.
Another crucial area demanding attention at this stage is promotion. Firm spends heavily on
advertising so as to build awareness among early adopters and dealers. Firms also spend
heavily on sales promotion so as to induce trials.

2. Growth Stage

The growth stage is a stage marked by increasing sales as early adopters like the product is
followed by other consumers who also start buying the product. As sales and profits go up,
competitors enter the market with new and improved versions of the product. More
intermediaries are willing to help the product thereby expanding the distribution chain. Firms
now operate at economical levels as there are lesser production bottlenecks resulting in lower
costs. Price of the product at this stage either remain same or fall slightly depending on the
increase in demand. Profit increases due to growth in sales and fall in unit manufacturing costs.
The rate of growth eventually changes from an accelerated rate to a decelerated rate making
firms to prepare new strategies.

During this stage firms uses several marketing strategies to maximize market share and sustain
rapid market growth to the extent possible. Firm further improves product quality, adds new
product features and also tends to offer product extensions, service and warranty. Prices fall
slightly to penetrate the market. Distribution coverage is increased by entering new channels.
There is a shift from product awareness advertising to product preference advertising. The firm
that pursues these strategies will strengthen its competitive position. By spending money on
product improvement, promotion and distribution, firm are thus able to capture a dominant
position.

Make Good Decisions in New Product Development

Those who have participated in new product development (NPD) know that making good
decisions is critical. New information is constantly gathered, and knowing what actions to take
based on that information determines the success or failure of the product. For example, what
are the risks and how should they be dealt with? Does manufacturing have the necessary
capacity? Once costs are better understood, do the financial assumptions still hold? Will

16
unexpected technical challenges cause delays? Have changes in the marketplace made a new
product development project less viable? Timely and sound decisions for each of these
questions is essential for ensuring that a new product development project flows smoothly,
launches on time, and provides the expected returns.

While making good decisions alone will not guarantee a successful new product development
project, poor decisions will always result in undesirable outcomes. See if any of these
complaints are familiar: "Manufacturing pulled resources for this project because it doesn’t
meet the target profit margin, but my boss wants to launch anyway because otherwise we won’t
meet our sales target." "The product test showed that the customer doesn’t like our prototype,
but we don’t have time to develop anything else, so we’re going with it."

Causes of Poor Decisions in New Product Development

Bias toward short-term results- With increased competition and customer sophistication,
companies are under pressure to deliver new and improved products at an accelerated rate. If
they do not act quickly, competitors will beat them to market. This drives:

Unrealistic timelines- Often product launch dates are determined before the customer
requirements or the technical challenges are understood. In many cases, the new product
development project is behind schedule before it even starts. In order to meet deadlines, teams
skip key steps and hope that it does not come back to haunt them. They do not have the time to
develop more than one idea, and if the one idea they pick fails, then they are in real trouble.
They must make decisions quickly with limited or no data. Additionally, they frequently
downsize the idea (i.e., decrease customer benefits) in order to meet the aggressive timelines.
Overworked team members make bad choices and fail to recognize issues that would normally
be obvious to them.

An unwillingness to take a stand- Because the short term is so important, leaders are reluctant
to make decisions that may risk the launch. If they are given two options, and they pick the
wrong one, then their project is in jeopardy of failure or missing the timeline. So, instead of
making firm decisions, they delay decisions to keep their options open as long as possible.
While this approach has merit when part of a well thought-out strategy, it causes problems
when it results from lack of planning. New product development teams are forced to keep
multiple options alive longer than necessary or to move forward at risk (i.e., in order not to fall
behind, they move forward based on assumptions. If they guessed right, their gamble pays off;
if not, their work is wasted and they fall further behind).

A "launch at all cost" attitude- Launching anything, even an inferior product, is better than
launching nothing. If the product is less profitable than first projected or if some of the product
benefits must be sacrificed in order to make the timeline, it’s still preferable to launching
nothing. In their single-mindedness to launch something, companies fail to consider trade-offs
such as, "Is it more profitable to rush to market with an inferior product or to delay launch with
a superior product?" Or, "What additional costs do we incur by rushing to market?" Or, "Does
it make more sense to fix production issues before or after launch?" While rushing to market

17
sometimes pays off (like when being first to market provides a clear market advantage), in
other cases it clearly does not (like when launching an inferior product could alienate
customers). The important thing is to ask the question; otherwise the bias is generally toward
launch at all costs.

Unclear decision-making criteria- In many cases, a company does not have standardized and
well-defined criteria to make decisions. One project is evaluated based on its projected sales,
another Functional Silos. project is evaluated based on its risks, while yet another project is
moved forward only because it is an executive’s pet project. When no clear criteria exist,
several undesirable things happen: New Product Development teams don’t know what
information management needs to make a decision, which causes confusion, extra work and
unnecessary stress. New Product Development teams are forced to decide for themselves what
information is important to share. Invariably key information is left out and teams spend time
gathering and providing information that management does not care about. How can a team
succeed when the target is unclear. leads to inconsistent information. Some New Product
Development teams may provide a thorough analysis of the risks while another team may focus
on the financial benefits. Management is left to compare apples to oranges.

In organizations where "bad news" is discouraged or a "launch at all cost" attitude exists, teams
spin the information or present it in the best light. They may even hide risks and problems.
Poor decisions are inevitable as they are based on biased, partial, inadequate and/or inconsistent
information.

Many companies are organized functionally so that individuals align themselves with their
department rather than with a cross-functional team. Although a functionally-aligned
organization has its advantages, it creates problems in New Product Development, where cross-
functional collaboration is critical to success.

Conflicting objectives- When an organization is functionally structured, different functions

have different incentives. For example, marketing may be rewarded based on the number of
new products they launch, while Research and Development (R&D) may be rewarded based on
the number of novel new technologies they develop, and Operations may be rewarded based on
how much money they save. When new product development team members are rewarded
based on different criteria, each will make decisions based on his/her own self-interest.
Conflicts predictably arise as any decision creates winners and losers within a team, setting
teammates against each other. A new product development team that works cohesively has a
much higher chance of success than one that bickers over who is right or wrong. While some
tension within a team is useful in generating better ideas and greater innovation, having
fundamentally different incentives will not lead to constructive solutions.

Failure to consider downstream stakeholders - The perspective of cross-functional partners is

often not considered early enough or at all. In the early stages of a new product development
project, marketing may work in isolation, only sharing their idea once a marketing concept is
fully developed. R&D may then conclude that the idea is not technically feasible. If R&D input
had been incorporated earlier, perhaps they could have partnered with Marketing to develop a
product idea that was both compelling and feasible. Similarly, if R&D develops a product

18
without consulting their Manufacturing partners, they may be in for the unwelcome surprise
that their product cannot be manufactured.

Missed opportunities- In addition to these downsides, new product development teams also
miss the potential upsides of partnering with their cross-functional partners. For example, if the
Sales department works closely with its retailers, they can bring forward insights gleaned from
the retailers. Similarly, packaging is a purchase driver for many consumer products and early
incorporation of the Packaging group’s input may create unique and differentiated selling
points

 Six categories of new product in the terms of their newness to the company and to
the market place.

i. New to the world – New products that create an entirely new product.

ii. New product lines – New Product that allows a company to enter an established market for
the first time.

iii. Additions to the existing product lines – New products that supplement a company’s
established product line.

iv. Improvements in revision to existing product – New products that provide improved
performance or greater perceived value and replace existing product.

v. Repositioning – Existing products that are targeted to new markets or market segmentation.

vi. Costs reductions – New product that provides similar performance at lower costs.

 Needs of New Product Development (With Examples)

The need for new product development on various counts described below:

a. Putting All Eggs in One Basket:

If an organization depends on only one product to get all the business and profits, it faces the
danger of losing everything in one stroke. E.g. Automobile Products of India (API) selling
Lambretta scooters lost its business to Bajaj Auto and it had no option but to close down.

Similarly, Amrutanjan, India’s number one pain balm, a single product company, and Vazir
Sultan Tobacco Company, manufacturer of the largest selling cigarette, Charminar, again a
single product company, closed when they lost business to rival products.

b. Creating New Avenues for Growth:

19
The market is always evolving itself and newer consumer needs and demands are created. To
take care of such situations, organizations must come out with new products that will create
new avenues for the growth of organizations. Organizations that are slow in creating new
avenues fall behind others in business.

E.g. Godrej, the only organization manufacturing refrigerators in India (GEC, the other brand
used to be imported), did not come out with smaller refrigerators to take care of the middle
class willing to buy them and lost business first to Kelvinator/Leonard/Gem (all manufactured
by Kelvinator but marketed by self/Blue Star/Voltas) and then to Hyderabad Alwyn and now
Whirlpool/LG etc.

c. Giving Choice to Consumers for Selection:

The consumer needs and demands keep changing and upgrading/downgrading and
organizations should create products in both upward and downward changes.

E.g. Maruti launched its 800 and van initially and then went on to introduce Zen, Esteem, 1000,
Swift, Swift Dezire, WagonR, Ecco, SX4 etc., to give the consumers various choices and keep
them tied to its own products.

d. Multiple Attacks on Competition:

When competition is the market leader, organizations introduce multiple products to corner
small portions of the competitor’s market share and collectively win a larger market share. E.g.
Vadilal ice-cream introduced as many as 24 flavours to beat Quality Ice-cream and become the
market leader (Quality sold out to Walls to become Quality Walls, a HUL company).

e. Cater to New Tastes of Consumers:

Consumers keep changing their expectations and the organization needs to give them newer
products to take care of new needs. E.g. Introduction of dish washers and food processors in
India by most of the electronics companies.

f. Taking Advantage of Market Fads/Fashion:

There are many fads and fashions that rule a particular time and organizations need to take care
of them by introducing products for such fads/fashions. E.g. KeMnator had introduced
refrigerators with various scenes like the Taj Mahal on Its door. It became an instant success
and was followed by all the other companies.

20
Broadly new products can be classified into the following four categories:
i. New to the World:

These products represent innovative novel creations that did not exist before. A large number
of products that are now taken for granted and considered old were once new to the world.
Consider products such as microprocessor, nylon, post-it notes, transistor, television, and
airplane were new products when they were created for the first time. Sony introduced to the
world a device called Walkman that allowed people to listen to music on the go.

ii. New to the Company:

As the name of this category suggests, these products are not new to the world but are new for
the company. Companies expand their offering to grow like ITC added readymade apparels and
food products to its portfolio. Addition of new product lines fall into this category.

Micromax started its operations as a mobile handset marketer and added television line later.
Sony added digital camera line to its existing portfolio in 1996.

iii. Additions to Product Line:

Firms add new items to their existing product line in order to meet evolving consumer and
competitive conditions. For instance, Pepsi added Pepsi Blue to cash in on a particular
cricketing season. Nokia added Asha to its mobile phone line. Sony introduced a new model to
its mobile phone line, Sony Xperia Z2, which they promoted as the ‘best phone ever’.

iv. Product Improvement:

Improved products are considered new because of their newness. These are linear
improvements to a product. For instance, Maruti launched its cars with new K Series engines
that delivered superior fuel efficiency.

Blue Star improved its air conditioners by improving its compressor to inverter technology.
Sony listened to customer feedback and it was the first to improve its camera by making their
devices dustproof and waterproof.

The Evaluation of New Products

A variety of new product check lists or evaluation techniques have been drawn up for
individual industry or company use. Inevitably, they cover a lot of common ground although,
obviously, some questions are considerably more relevant to some companies and products
than others.

The chief value of such techniques lies in the discipline it imposes on management thinking in
relation to new product development. It ensures that all relevant criteria are given due
consideration and that product policy consciously takes account of the inherent strengths and
weaknesses that make one company different from another company.

21
The new product evaluation chart opposite rates the product on a simple semantic scale’ Above
Average’, ‘Average’ and ‘Below Average’ for a number of factors grouped according to certain
key criteria. The ratings are illustrative only since the relative importance of the different
factors used in the chart will vary from industry to industry and from company to company.
The relative weight assigned to each of the rating factors must be considered in relation to their
assumed importance to the company.

The Risks of Product Innovation:

Product innovation, important as it is for long-term company growth, is an extremely risky

business. A great many new product ideas never come out of product research laboratories and
are filed away. In other words, even when a manufacturer goes to the trouble and expense of
trying out his new product under ‘live’ test marketing conditions, there is still only a fifty-fifty
chance that the product will go on to be successful. But at least these are better odds than those
facing the manufacturer who does not believe in the efficacy of test marketing.

How, therefore, can the risk of product innovation be reduced to a more acceptable level? First,
manufacturers can reduce the risk by systematic product planning involving all the well-tried
steps of product testing, market research, and test marketing and by asking all the right
questions while the new product is still in the planning stage.

In this way they can ensure that action is based on knowledge of the facts rather than
guesswork, provided the former can be obtained in a reasonable time and at reasonable cost.
Second, they can reduce the risk by analysing and following established patterns of success
based on their own past product and marketing experience and on the experiences of others in
their own or related fields where these are discernible.

Established Patterns of Success for a New Product

On the basis of the successes which certain companies have achieved with new products it is
possible to make a few tentative generalisations. These fall into three groups those generalisa-
tions that can be made about the company itself, those that can be made about the product
conditions which appear to be favourable to successful new product introductions, and those
that can be made about the market conditions for new products under consideration.

First, as regards the company itself, success seems to be more likely if:

(a) The company has a background of engineering, marketing and research knowledge, skill
and experience in the product fields concerned;

(b) Top management gives adequate attention and priority to the new product programme;

22
(c) The company has experience in the planning and management of test markets and in the
analysis and interpretation of the results of test markets;

(d) There is an opportunity to use existing facilities, resources and personnel in order to keep
down the level of costs.

Second, as regards the product conditions favourable to successful new product introductions,
these would appear to include:

(a) The necessity for having a new product which offers a difference which is of significance
to, demonstrable to and preferred by a large enough group of customers (this is by far and away
the most important source of a company’s competitive differential advantage);

(b) The necessity for providing an opportunity to create a difference in advertising and
promotion (it is often possible to build into a technically undifferentiated product a genuine
customer benefit which will serve to distinguish it from the competition and provide a basis for
customer preference, e.g., a better or more convenient form of packaging, a better way of
distributing and making the product available at a time and place more convenient to the
customer);

(c) The necessity for making a product that will meet a real need either not being filled at
present or better than any competing products and that will sell in sufficient volume and
provide a sufficient margin to pay for the promotional support needed to create sales.

Third, a new product, generally speaking, has a better chance of succeeding if:

(a) The market is an expanding one, and is broadly based across a large number of potential
customers;

(b) If the market is going through a period of change;

(c) If there is a lack of strongly entrenched competition in the mind of the customer and
therefore an opportunity to create a strong brand identity for the new product;

(d) If the competition is unlikely to be able to take serious counteraction quickly against the
new product or the initiating company’s established products;

(e) If the market is relatively stable in the sense of being free from violent ups and downs of a
general economic or seasonal nature.

A company can develop or acquire new products either out of its own skills, knowledge and
resources or by the skills and knowledge of others through patent and know-how agreements,
licensing arrangements to market other companies’ products, or by outright acquisition or
merger. In the latter case, the object of a take-over or merger is unlikely to be motivated solely
or even largely by the desire to acquire new products.

Company acquisition is, in general, much more likely to be dictated by the need for:

23
(i) Consolidation—the reduction of existing or potential competition by buying out a
particularly troubles some competitor or ‘fishing’ for some of the more up-and-coming firms in
the market;

(ii) Integration—the direct control of sources of raw materials, processes, suppliers or outlets
for the company’s operations;

(iii) Economy—the lowering of production, marketing, management or overhead costs and the
more efficient use of centralised specialist services;

(iv) Finance—to achieve the fuller utilisation of under-employed reserves, or to acquire greater
liquid resources to finance future expansion;

(v) Management skill— the more profitable use of good surplus management through the
build-up of companies bought on favourable terms when in difficult circumstances, or the
buying-in of good outside management to strengthen the business.

The search for new products, therefore, emerges as probably the least important single reason
for company acquisition or merger, and certainly the more expensive way of going about it
since the purchase of some fairly costly and possibly superfluous and unwanted assets will
usually have to form part of any deal.

Measures for the Success of New Product

The acceptance of product by the customers is called success of it. Further, the accepted
product continues to be there in market for more number of years. In other words, a product has
to undergo all phases before it dies, could be termed as successful. The duration is undefined. It
changes according to customers repeated buying’s and preferences. The lessons of product
failure suggest the way and means to be followed for the success of it.

The following are the probable measures to be followed to attain success of product:

1. Proper research and development activities are to be carried out for the identification of new
product concept.

2. Proper studies are to be conducted to know accurately the market conditions.

3. Product ideas are to be refined and redefined by the research team.

4. Proper co-ordination is needed at all the levels of management. The Research and
Development department, production wings, purchase, finance, marketing etc., have to with co-
operation & co-ordination.

5. Successfully launch the product with needed promotional support.

6. Property conduct the sample-test, pre-launch offer before heavy investment in production.

24
7. be ready to modify the product in case market expects slight modification.

8. Add the values to the products which would satisfy the customers for the long-term.

Reasons for the Failure of New Products:

Companies do put in sufficient amount of efforts and planning before introducing new
products. In spite of this, there is no guarantee that a newly introduced product will succeed at
the market. Failure of a newly introduced product can cause huge amounts of losses to the
manufacturers.

Several seemingly good new products have failed in the market. Failure of a new product may
mean several things-lacks of customer acceptance, low sales, low profits, poor customer
response etc. For every successful new product, there are many failed new products. The
reasons for failure of a new product are several.

The following are a few reasons for the failure of new products:

i. Faulty Product Idea:

Every new product is based on a product idea or product concept. A company generally tests
this idea or concept before launching the new product. If a company fails to study the idea or
concept properly, it might launch the new product on a faulty idea or concept. The new product
in such a case will definitely fail in the market.

ii. Poor Timing of Launch:

A new product must be launched at the appropriate time. A too late entry, a too early entry,
launch during an economic downturn, launch along with strong competitor etc. will not help the
product. If the product is launched at the inappropriate time it will fail in the market.

iii. Improper/Insufficient Planning:

A new product must be launched only after sufficient planning of several aspects related to the
launch. The planning should include market study, product designing, consumer analysis etc. If
the planning is not done properly, the product will fail in the market.

iv. Lack of Demand:

Every new product, to be successful needs a certain amount of demand. Demand analysis based
on market research, is an important part that should precede a new product launch. If a
manufacturer launches a product without such analysis and if the demand is lesser or absent,
the product will fail in the market.

v. Technical Problems:

25
Certain products involve a sufficient amount of technology and all these aspects must be
sufficiently studied, tested and perfected before the launch. If the products have some
technological snags in them, the customers will reject the product.\

vi. Wrong Target:

Every company, before introduction of a new product should study the market and define its
target Customers, the product should be designed to suit such target customers, if the targeting
is not done properly, the product will not suit the target customers’ needs and will fail in the
market.

vii. High Price:

The challenge of a new product is to design it appropriately, offer it to the customer at the
acceptable price but still earn sufficient profit. If the product is priced very highly in terms of
the customers’ expectations and willingness to pay, it will fail in the market.

viii. Product Promotion:

Every new product, even if it is well designed and priced, needs to be supported by promotion
activities. If a company does not promote its product well, the product will fail in the market.

ix. Improper Distribution:

A product to be successful should be well distributed so that it is easily available. A consumer

should be able to purchase it very conveniently. If a company does not put in place a proper
distribution system, it will fail in the market.

x. Absence of Sales Service:

Some products require an effective after sales service because of their technical nature. If the
company does not offer well after sales service or if the spare parts are not available, the
product will fail in the market.

xi. Too Advanced Product:

Customers are generally accustomed to a certain level of technology and if a product is much
more advanced than that level pf technology, the customers will reject the product.

xii. Product not Up to the Expectation:

Some companies create a high level of expectations about the products in the minds of the
consumers and if the product does not rise up to the expectation created, customers feel cheated
and they reject the product.

26
xiii. Tough Competition:

A company might design a good product and do everything perfectly but if the competitors do
it in a much better, manner, the company’s product will fail in the market.

xiv. Improper Positioning:

The success of a product depends on its positioning. If the positioning is not done properly,
customers will not have clarity and will reject the product.

xv. Absence of Uniqueness:

Customers look forward to something new in every a product and if the new product has
nothing new or unique, it might not be accepted by the market.

27
LITERATURE REVIEW

LITERATURE REVIEW

28
Ian Goulding

European Journal of Marketing

Article publication date: 1 March 1983

The emergence of a formalised new product development function can be attributed to the
needs of companies in the capitalist system to maintain a competitive advan-tage in the markets
in which they operate, this being a prerequisite for corporate sur-vival and growth (White,
1976). Essentially, the process is one of innovation and can be defined as "the technical,
industrial and commercial steps which lead to the marketing of new manufactured products"
(Central Advisory Council on Science and Technology, 1968). This succinct definition belies
the complexity of the function; "to describe new product development as difficult is probably a
mammoth understatement" (Chisnall, 1979). It is the intention of this review to illuminate the
theory and prac-tice of this process I. THE NEED FOR NEW PRODUCT DEVELOPMENT
New product development is essentially a means of improving corporate viability (Hayhurst,
1968) and ultimately, therefore, national prosperity (Viscount Caldecote, 1979). From the
viewpoint of the company the process may be used to diversify the range of business activities
undertaken. However, this end may be achieved by employing a number of valid alternatives to
new product development.

Rejuvenation of Existing Products The theory of the product life cycle described by Doyle
(1976) is frequently and in-correctly put forward as revealing a direct need for new products,
e.g., Skinner (1972). The principal tenets of this theory require that, firstly, sales of a product
group, form or brand, pass through a series of definable stages at different times, and secondly,

29
that the profit: sale ratio follows a similar cyclical curve, as a function of the changing
character of the market

Diversification This generic term includes all forms of business development which are not
concerned with supplying existing products to existing markets. The rationale for such action
may arise out of irrevocable changes to the marketing environment, as discussed previously,
but other factors often combine to provide the impetus. These factors may be unique to an
individual company, but obvious ones are the elimination of seasonality in the supply or
demand, the utilisation of excess production capacity or raw materials, the exploitation of
market opportunities and the counteraction of declining demand (Mason, 1973). The
development of new markets and/or new products involves inherent risk. The willingness to
accept this risk is to some extent dependent on the corporate character. Companies with strong
production and research and development abilities need to enter a market first in order to
capitalise on their skills, whereas firms with a strong marketing orientation may feel it prudent
to imitate competitors' products, relying on marketing abilities to recover lost ground with a
better strategy (Chisnall, 1979). This latter "me too" approach has the additional benefit of
vastly reduced development costs (Lomas and Pratt, 1979). Larger companies may utilise
acquisitions of other firms to enter new product fields and markets, although this route is not
available to small firms due to limited availability of capital (Mason, 1973). Small firms have
special problems with respect to diversification, and ideally they require painless new products
based on current production methods and marketing systems

A review of the literature reveals that the factors which influence the effectiveness of virtual
teams are still ambiguous (Ale Ibrahim et al., 2009d). One of the notable challenges for
effective virtual teams is ensuring good communication amongst all members of the distributed
teams (Anderson et al., 2007). Jarvenpaa and Leidner (1999) found that regular and timely
communication feedback is a key to building trust and commitment in distributed teams. A
study by Lin et al.(2008) suggested that social dimensional factors need to be considered early
during the virtual team creation process, and are critical to the effectiveness of the team.
Communication is a tool that directly influences the social dimensions of the team, which
improves team performance and has a positive impact on satisfaction within the virtual team.
For teams moving from collocation to virtual environments, an ability to adapt and change can
be along process riddled with trial and error scenarios. This process is seen as necessary to
encourage effective virtual teams (Kirkman et al., 2002). Despite weak ties between virtual
team members, ensuring lateral communication may be adequate for effective virtual team
performance. In terms of implementation, lateral communication in both virtual context and
composition teams can be increased by reducing the hierarchical structure of the team (that is, a
flatter reporting structure and/or decentralization) and the use of computer-mediated
communication tools.

Malhotra and Majchrzak’s

(2004) study of 54 effective virtual teams found that creating a state of shared understanding
about goals and objectives, task requirements and interdependencies, roles and responsibilities,

30
and member expertise had a positive effect on output quality. Hertel et al. (2005) collected
effectiveness ratings from team managers both at the individual team levels. The results of the
field study showed good reliability of task work-related attributes, teamwork-related attributes,
and attributes related to tele-cooperative work. Shachaf and Hara (2005) proposed four
dimensions of effective virtual team leadership:1. Communication: the leader provides
continuous feedback, engages in regular and prompt communication and clarifies tasks.2.
Understanding: the leader is sensitive to the members’ schedules, appreciates their opinions and
suggestions, cares about their problems, gets to know them and expresses a personal interest in
them.3. Role clarity: the leader clearly defines responsibilities of all members, exercises
authority, and mentors virtual team members.4. Leadership attitude: the leader is assertive yet
not too “bossy,” caring, relates to members at their own levels, and upholds a consistent
attitude over the life of the project. From observations and interviews, Bal et al. (2001b,1999)
identified 12 elements for effective virtual teamwork, as illustrated in Figure 1. The Bal and
Gundry(2001b, 1999) model was used as the basic framework in this paper.

Objective of NDP

1. Analysing how to start new product.

2. At the same time gathering the practical experiences.

3. Present situation about the market.

4. To know the product strategies that the organization allows to apply.

Hypotheses

From a review of the existing literature, it is evident that there remains a gap with respect to the
requirements of the company in determining the appropriate design tools and methods for
effective new product development in virtual teams. This research proposes the following
hypotheses in order to full fill the requirements:

1 : Technology is positively correlated to Process in virtual teams.

2: Technology is positively correlated to Knowledge Workers in virtual teams.

3: Process and Knowledge Workers are positively correlated in virtual teams.

4: There is an insignificant difference between the origins of virtual teams.

Scope and Limitations of the study

As per the present lock down situation some data cannot be study and also due to time

constraints.

31
LAUNCHING OF PRODUCT IN TO THE PRODUCT

32
Launching product on to the market

The new product development is the introduction of the product into the market. On this stage
the role of marketing and sales is crucial. For instance developing a marketing plan is very
essential activity in this stage (Cooper 2001, 278-279). For better understanding of the content
of a marketing plan, the appendix three present the content of marketing plan defined by Kotler
et al.(2013)

A common definition of marketing is, putting the right product, in the right place, at the right
price, at the right time (Manktelow & Carlson, 2012). According to Manktelow & Carlson, if
one of the previous stages is underestimated or not considered the launch of the new product
can be a failure.

Defining the Marketing Strategy

In a product launch process, the company's mission and objectives are defined by the company
since the beginning of product planning. The goal of Marketing is to create value for the
customers and ensure a profitable relationship with the customers. To accomplish this, a
marketing strategy is necessary. The marketing strategy defines which is the group of the
customers company will serve and how will it be served to this customer group. The group of
customers is defined through segmentation and targeting and the answer on how the company
will serve to its customers comes via differentiation and positioning. (Kotler, et al. 2013, 51-
53).

A market segment consists of a group of customers which have similar needs and respond very
similarly to the marketing activities. The marketing target involves the analysing of each
market and selecting one or more segments as potential customers. Furthermore, Kotler et al
(2013) defines positioning as a place which companies occupy in the customers mind to
distinguish their products from the competitors. In the positioning of a company, the customer
value differentiations and the advantages of the products towards the customers are very
important. If a company promises better value than the competitor, it is a must to deliver those
values. This process is reached through the differentiation of the market offering to create
greater customer value.

Defining the marketing mix

After defining the marketing strategy, the company should prepare the marketing mix. The
marketing mix is the most important set of marketing tools which companies can use to
influence the demand of the customers for its products. This set of tools is collected into a
group called the four P´s of marketing (Kotler, et al. 2013, 53). The four P´s stand for product,
place, price and promotion (Kotler & Keller 2009, 92).

33
Product is the article which has been developed by a company or manufacturer which desires to
sell it to the customer. Product is the main competing item of the company and it is considered
to be the heart of marketing mix. If a product does not fulfil the customer needs, or satisfaction,
the price, promotion and place will not be able to achieve the marketing target (Akrani, 2010).

Price of the product defines the value of the product to the customer. It is the most important
factor which influences the marketing. Price can be determined by several factors such as;
product manufacturing cost, market share, target customers, type of the product etc. (van Vliet,
2013).

Promotion is all about defining the way how the company will communicate with the
customers. The core message is delivered to the customers via defined promotion tools used in
sales and marketing. Promotional activities help to differentiate the product from competitors,
and create a good relationship with the customers (van Vliet 2013, Akrani, 2010).

Place is considered as distribution channel which is used to deliver the products to customers.
However the type of product, which a company offers, influence the way how it should be
distributed (Ehmke et al. 2013).

Marketing in B2B product launch

According to Dan Adams (2012) in 80% of B2B transactions today, the customer finds the
supplier. Adams divides marketing into two stages: early stage marketing which starts with the
discovery stage and late stage marketing which is implemented when the company is
promoting the product to the market.

34
The idea of the early marketing stage is also mentioned by Robert G. Cooper, which sees
marketing planning as an activity that starts just after the idea generation and continues through
all new product process (Cooper, 2001). Furthermore Adams proposes that the 4 Ps coming
from customer should be developed into a B2B model. “Deliver the Right Product to the Right
Market using the Right Message through the Right Media” (Adams, 2012). With the right
product the company should satisfy the market needs. The right product is delivered by
fulfilling the previous stages. Understanding customer needs and building the customer value
into the product.

Media channels

Before launching a new product it is important to understand which media preferences the
target customers have. By using the right media, a company can use more efficiently the
investment in promoting the new products into the market (Gray, 2012). On the picture below,
nine traditional media and nine online media are listed.

35
Eighteen different media used in B2B product launch (Adams, 2012)

The factors that influence the company’s decision should firstly be decided in a research where
customer's media preferences are listed. Then, company should consider the available resources
to implement each listed media. The industry in which the company is operating and the
position of the company in the industry, are two other important factors which influence the
decision on which media channel should be used (Adams, 2012).

Sales promotion

Sales promotion is one of the most important success factors that affect the success of a product
launch. Sales promotion is made through motivation activities, which encourage the customers
to purchase a product or a service. For better, effective results, sales promotion activities are
combined with personal selling which is another important promotion tool is used in in a
successful product launch. (Kotler et al. 2013, 472)

According to Philip Kotler, Gary Armstrong, Lld. C Harris and Nigel Piercy (2013), personal
selling is made through the sales force which interacts with the customers and prospects to
build relationships and make sales. Sales professionals on today's market are not the one that
tries to push or take advantage of the customer but the one that listen to their needs and help to
finding the solutions (Kotler et al. 2013, 472). Moreover, the sales team need to be very
prepared before confronting the customers and presenting the new products. The confidence on
the product can influence in the reliability and image of the product in the eyes of the customer
(Adams, 2012). The table below lists some of the popular sales tools used by companies in
supporting their sales team.

36
To measure the success or the failure of the product launch it is necessary to conduct a post
launch review. In a post launch review it is important to discuss what went well during the
launch of the product and what can be improved in the next product launch. A typical post
launch review should be held within two months as the team members have all the information
still fresh in mind. The launch process is recommended to take place in a friendly environment,
with continuous constructive feedback without blaming team members for things that have
gone wrong (Edgett, 2013). However, according to the company case study conducted by Scott
Edgett (2013) a product post launch review is held between three to six months after the
launch. In authors opinion the example shows that the time of post launch review can be
applied differently by companies according to their business type or industry. The author
supports the idea that the industry and the type of the product which company is offering
influences the timing in which a company can receive reliable results from its product launch.

37
PLAN FOR THE SUCCESSFUL LAUNCH OF YOUR NEW PRODUCT

38
PLAN FOR THE SUCCESSFUL LAUNCH OF YOUR NEW PRODUCT
The ability to develop products and services that offer fresh ideas and are relevant to customers
is no easy task, especially in a world where products are quickly commoditized. As a result,
few businesses get it right, and new products suffer a high mortality rate (failure rates vary
from 33% according Booz, Allen & Hamilton, Inc. to 60% according to Silk and Urban).Yet,
for many companies long-term success is linked to innovation and adoption.

When a company is customer-centric, Marketing plays a key role in the product development
process. Marketing is responsible for providing four cornerstone pieces: A clear understanding
of the target and the target market’s needs/wants. The link between the concept and the
requirements

--Competitive analysis

--Positioning

Understanding the wants and needs of the target customers is the first and probably most
important step. Your customers’ wants and needs create the relevant link between your solution
and the customer. The more you understand your customers’ core values, as they relate to your
solution, the tighter you can make the connection between how the product will fit into the
customer’s process and/or life.

The customer’s value structure provides critical information for positioning. When researching
the wants and needs you need to understand the “why” as much as the “what”. When you can
answer “Why do they want what they say they want?” your focus is on your customers’
unfulfilled needs, problems/failures with current solutions, modifications, and benefits.
Answers to this question provide insight into benefit-oriented root wants and needs of an ideal
product. Keen insight into the competitive landscape is also essential to new product success.
You must know the category the new product will play in, so you can properly identify the
competitive set. Identify both obvious direct competitors and any product/process that can
serve as a substitute for the solution you are creating. You’ve determined there is a need, that
you have a solution of value, and that you can compete. Now you need to create a believable
and own able position in the market. Marketing is responsible for these four critical steps, half
of the steps associated with the new product development process.

Key Components to the New Product Development Process

Bringing new products to market is a critical aspect for generating value. Shareholders equate
value with not how good a company was in the past but with what you are doing today and
tomorrow to continue to sustain and grow value. This means that the value of your company is
centred on its ability to think long-term about the future.

Part of thinking about the future involves developing and launching new products. It is
estimated that 46% of the resources that companies devote to the conception, development and
launch of new products go to ventures that don’t succeed – they fail in the marketplace or never

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even make it to market. So having an effective process for new product development is very
important. Many companies use a Stage-Gate, a term coined by Robert Cooper in the 1980s to
help with the development and evaluation of new products. According to a Product
Development & Management Association (PDMA) best-practices study, 68% of leading U.S.
product developers now use some type of Stage-Gate process. A Stage-Gate process is a
conceptual and operational road map for moving a new-product project from idea to launch.

Consider employing these 8 key components for your New Product Development Process
(NPD), to ensure overall marketability of your new product:

Step 1: Ideation.

Innovation takes inspiration. Two common analysis techniques employed in the ideation
process are STEP and SWOT.

STEP stands for Social, Technological, Economic, and Political (this is also sometimes called
PEST). It is a framework for the analysis of these macro-environmental factors. The social
factors often reviewed are the demographic and culture aspects. Technological factors are ones
that can impact an organization’s ability to create barriers to entry, reduce minimum efficiency
production levels and influence outsourcing decisions include R&S activity, rate of
technological change, and automation. The purchasing power of potential customers, the cost
of capital, economic growth, exchange rates, inflation rates, and interest rates are often taken
into account when analysing economic factors. Political factors include government regulations
and legal issues. By combining all of these factors, an organization can create a view of the big
picture. For more about STEP, check out Peter Drucker’s book, Managing in the Next Society.

A SWOT analysis, (strengths, weaknesses, opportunities and threats), provides insight into how
to match an organization’s resources and capabilities within the context of the competitive
environment. It is instrumental in strategy formulation and selection. Environmental factors
internal to the organization are evaluated as either strengths or weaknesses. Factors that are
external to the organization are evaluated as opportunities or threats. Strengths are represented
as resources and capabilities that can be used to develop and/or enhance an organization’s
competitive advantage (these include patents, brands, reputation, cost advantages, access to
resources, distribution channels, etc). The absence of these strengths is viewed as weaknesses.
The external environment analysis may reveal new opportunities to take advantage of
unfulfilled customer needs, new technologies, changes in regulations or trade barriers, as well
as threats such as new regulations, the emergence of substitute products, and shifts in customer
trends. Once the information is gathered, a matrix is constructed. By using the matrix,
organizations attempt to develop strategies that will allow them to pursue opportunities that
will leverage their strengths and overcome their weaknesses and identify ways to use its
strengths to overcome vulnerabilities to external threats and establish a defensive plan to
prevent the organization’s weaknesses from making it susceptible to external threats. For more
on this topic, check out Robert Bradford and Peter Duncan, and Brian Tracey’s book,
Simplified Strategic Planning: A Guide for Busy People who want Results Fast!

Step 2: Screening.

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Not every idea is a good idea. It’s important to establish specific criteria to help quickly
determine whether to continue or drop a potential new product or service. Using agreed upon
criteria helps eliminate poor projects from the idea-hopper quickly. Even if an idea doesn’t turn
into product, keep it in the hopper because it can prove to be a valuable asset for future
products, and a basis for learning and growth.

Step 3: Concept testing.

As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important
to note, it is different from market testing. In addition to checking patents and other legal
issues, and conducting design due diligence, now is the time to start developing the value
proposition, positioning and messaging framework, so you can begin testing the concept with
existing and prospective customers. The key question to answer at this step is “Does the
potential customer understand, need, or want the product/service?” A product whose value
proposition doesn’t resonate in the market will not go far.

Step 4: Metrics for Success

The New Product Development process is an ideal time to establish metrics that will be used to
monitor and measure progress as well as success. Include activity metrics, such as average time
in each stage, as well as output and outcome metrics that measure the value of launched
products, rate of product adoption, and percentage of sales from the new product.

Step 5: Market Test

No product should come to the market before it is primed. Market tests are critical. Testing
panels, focus groups, alpha and beta testing all provide valuable information allowing product
improvements. Not to mention helping to generate a small amount of buzz.

Step 6: Launch Plan

You’ve perfected the technical aspects of the product. You’ve honed the value proposition.
You have the product processes in play and all the accessories to support the product, such as
landing pages, white papers, technical literature, demonstrations, sales materials and
presentations, and so on. Now it’s time to create the launch plan. Remember that your plan
needs to include elements to support these stages in the consideration process: inform/educate,
persuade and motivate.

The informative stage seeks to convert an existing need into a want or to stimulate interest in a
new product. We’d recommend you build your strategy around informative programs because
they are important for promoting complex and technical products. The purpose of these
initiatives should be to increase awareness, explain how the product works, suggest uses for the
product, and build company image. Once the product enters the growth stage of its life cycle
then persuasive initiatives will be needed to stimulate consideration. These programs typically
focus on encouraging brand switching, changing perception, etc.

Advertising and public relations can be very effective for gaining attention and developing
interest and desire. These tend to be less effective at producing action. Sales promotions tend to

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be more effective at the desire and action stages of the purchasing decision process. Personal
selling techniques have the greatest impact at the interest and desire stages.

Step 7: Market Momentum

Your new product is ready for prime time. The product has been validated and you are
experiencing market traction. Customers are purchasing your good or service – perhaps these
are early adopters. This is a good time to check back in with the market to understand what is
required for the early and late majority, and even the laggards to consider your offer. This may
require you to make market strategy refinements and build out additional customer journey
maps to support your demand generation, customer acquisition, and market share targets.

Step 8: Post Launch Review and Continuous Improvement

A product launch serves as an opportunity to review your NPD process efficiency and look for
continues improvements. Most new products are introduced with introductory pricing.
Continue to explore ways to continuously differentiate customer needs as your product ages.

New product development hinges on your ability to synthesize customer insights and market
intelligence, to create an innovative product to meet customers’ needs. It is the responsibility
of Marketing to help identify product innovation opportunities, gather market requirements,
segment the market, select the right target markets, define the value proposition and
communicate the value of new products to the target markets

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CONCLUSION

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CONCLUSION

NPD theories have emerged from same-place/same-time environments to provide a deeper

understanding of effective NPD processes (Brown & Eisenhardt, 1995). While it is almost
taken for granted today that cross-functional teams outperform individuals in development
activities, little is known about the relative effective- ness of teams versus individuals in the
context of NPD project review decisions. Our results suggest that teams make more effective
NPD project continuation deci- sions than individuals. We believe that our research is an
important step in under- standing factors that impact the effectiveness of NPD project review
decisions. As organizations face increasing global competition, reduced product life cycles,
mass customization, and the increased need to quickly respond to custom- ers, more and more
firms are managing the NPD process across temporal and geo- graphic boundaries
(McDonough et al., 1999). Yet, there is a paucity of research on dispersed virtual teams and the
technologies that support them (cf. Fjermestad & Hiltz, 1998-1999), especially in the NPD
context. Our results indicate that the effectiveness of decision-making teams at project review
points is magnified when teams are dispersed and communicate through asynchronous media.
We believe our research provides insights regarding how communication technology can be
used to effectively support an important business process-new product develop- ment

New product development is the one of the key factors for progress and competitive advantage
in each country. Latvia has a low innovation performance in comparison with other EU
countries because of the lack of innovative companies, lack of investments in research and
development, insufficient cooperation among science, higher education and industry
sectors. Different researchers use distinctive innovation measurement models, like the
Diamond Model, the Funnel Model, the Innovation Value Chain Model, e.t.c. More applied
model, which characterizes innovation, new products, and technological development
processes, is a NASA model. This model is adopted by the European Space Agency and the
European Commission with minor changes. The authors of this research study offer an
important step in the solution to this problem – to perform an analysis of innovation processes
stage by stage. The authors propose a new model, which allows evaluating every stage of the
innovation process, to identify the main problems that hinder innovation. This model allows
developing concrete proposals for improving the innovative climate in the country

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