Introducti

on
Product Development strategy
Given the rapid changes in consumer tastes technology arid competition
companies must develop a steady stream of new products and services A
firm can obtain-new products m two ways. One is through acquisition by
buying a whole company a patent or a license to produce someone else s
product The other as through new-product development m the company s
own research -and-development department By new products we mean
original products product improvements product modifications and new
brands that the firm develops through its own research-and-development
efforts.

When an organization introduces a product into a market they must ask

themselves a number of questions.

1. Who is the product aimed at?

2. What benefit will they expect?
3. How do they plan to position the product within the market?
4. What differential advantage will the product offer over their
competitors?

New products continue to fail at a disturbing rate. One source estimates that
more than 90 percent of all new products fail in within 2 years Another-
study suggested that of the staggering 25,000 new consumer food, beverage,
beauty, and healthcare products to hit the market each year, only 40 percent
will be around 5 years later Moreover failure rates for new industrial
products may be as high as 30 percent.
Why do so many new products fail? There re several reasons Although an
idea may be good the market size may have been overestimated Perhaps the
actual product was not designed as well as it should have beer Or maybe it
was incorrectly positioned in the market priced too high or advertised poorly
A high-level executive might push a favorite idea despite poor marketing
research findings- Sometimes the costs of product development are higher
than expected, and sometimes Competitors fight back harder than Expected.
However the reasons behind some new product failures seem pretty obvious
Try the following on for size.
Review of
Literature

Product strategies
When an organization introduces a product into a market they must ask
themselves a number of questions.

• Who is the product aimed at?

• What benefit will they expect?
• How do they plan to position the product within the market?
• What differential advantage will the product offer over their
competitors?

We must remember that Marketing is fundamentally about providing the

correct bundle of benefits to the end user, hence the saying ‘Marketing is not
about providing products or services it is essentially about providing
changing benefits to the changing needs and demands of the customer’
(P.Tailor 7/00)

Philip Kotler in Principles of Marketing devised a very interesting concept

of benefit building with a product

For a analysis the book of Principles of Marketing by P.Kotler.

Kotler suggested that a product should be viewed in three levels.

Level 1: Core Product. What is the core benefit your product offers?.
Customers who purchase a camera are buying more then just a camera they
are purchasing memories.

Level 2Actual Product: All cameras capture memories. The aim is to ensure
that your potential customers purchase your one. The strategy at this level
involves organizations branding, adding features and benefits to ensure that
their product offers a differential advantage from their competitors.

Level 3: Augmented product: What additional non-tangible benefits can you

offer? Competition at this level is based around after sales service,
warranties, delivery and so on. John Lewis a retail departmental store offers
free five year guarantee on purchases of their Television sets, this gives their
`customers the additional benefit of peace of mind over the five years should
their purchase develop a fault.

Idea generation

New product development starts with idea generation the systematic search
for new product ideas. A company typically has to generate many in order to
find a few good once. According to one well-known management
consultant, For every 1 000 ideas, only 100 will have enough commercial t0
promise to merits a small sca1e experiment only 10 of those will Warrant
substantial financial commitment and of those a couple will turn out to be
unqualified successes. “His conclusion?“ If you want to find a few ideas
with the power to enthrall customer, foil competition, and thrill investors’
you must’ first generate hundreds and potentially thousands of
unconventional strategic ideas.

Internal Idea Sources

Using internal sources the company can find new ideas through formal
research and development. It can pick the brains of its executives Scientists
engineers manufacturing staff Sand sales people Some companies have-
developed successful entrepreneurial programs that encourage employees to
think up and develop new product ideas. For example 3M s well known 15-
percent rule allow employees to spend 15 percent of their tine bootlegging
—working on projects of personal interest whether or not those project
directly benefit the company.
Companies some times look for creative innovation approaches that
overcome barriers to the free flow-of new product ideas For example firms
like Eureka’ Ranch—a well known new product hatchery —employ both
method and madness in helping companies to jumpstart their new product
idea generation process.

External Idea Sources

Good new product idea also come from watching and listening to customers
The company can analyze customer questions and complaints to find new
products that better solve consumes problems Company engineers or
salespeople can meet with and work. Alongside customers to get suggestions
and ideas The Company can conduct surveys or focus groups to learn about
Consumer needs and wants. Heinz did just that when its researchers
approached children who consume more than half of the ketchup sold find
out what would make ketchup more appealing to them The answer change
the color So, Heinz developed and launc1iedEZ Squirt green ketchup that
comes iii a squeezable bottle targeted at kids Blastin Green ketchup was a
smash hit, so Heinz followed up with an entire rainbow of EZ Squirt colors,
including Funky Purple Passion Pink, Awesome Orange, Totally Teal, and
Stellar Blue. The EZ Squirt bottle s special nozzle also emits a thin ketchup
stream, “so tykes can autograph their burgers (or squirt someone across the
table though Heinz neglects to mention that).” In all the new line earned the
Company a 5 percent increase in sales ii the first year after hitting the
grocery shelf.
Consumers often create new products and uses on their own and companies
can benefit by putting them on the market. For example for years customers
were spreading the word that Skin-so-soft bath oil and moisturizer was also
a terrific bug repellent. Whereas some Consumers Were content simply to
bathe an water scented with the fragrant oil others carried it in their
backpacks to mosquito-infested campsites or kept a bottle on the deck of
their beach houses Avon tuned the idea into a complete line of Skin-So-Soft
Bug Guard PLUS lR335® products including the Insect Repellent Gentle
Breeze Moistures Sun block Lotion SPF 30 a combination moisturizer insect
repellent and sunscreen.

The search for new-product ideas should be systematic rather than

haphazard. Otherwise few new ideas will surface and many good ideas will
sputter and die Top management can avoid these problems by installing an
idea management system that directs the flow of new ideas to a central point
where they can be collected reviewed and evaluated hi setting up such a
system the company can do any or all of the following.

•
Appoint a respected senior person to be the company s idea manager.

•
Create a cross-functional idea management committee consisting of
people from R&D, engineering purchasing operations finance and
sales and marketing to meet regri1rly and evaluate proposed new
product and service ideas.

•
Set up a toll-free number or Web site for anyone who wants to send a
new idea to the idea manager.

•
Encourage all company stakeholders-employees suppliers,
distributors, dealers—to send their ideas to the idea manager.
 •
Set up formal recognition programs to reward those who contribute
the best new ideas.

Idea Screening

The purpose of idea generation is to create a large number of ideas. The

purpose of the succeeding stages is to reduce that number. The first idea-
reducing stage is idea screening, which helps spot good ideas and drop poor
ones as soon as possible. Product development costs rise greatly in later
Stages, so the company wants to go ahead only with the product ideas that
will turn into profitable products.

o The object is to eliminate unsound concepts prior to devoting

resources to them.
o The screeners must ask at least three questions:
 Will the customer in the target market benefit from the
product?
 What is the size and growth forecasts of the market
segment/target market?
 What is the current or expected competitive pressure for
the product idea?
 What are the industry sales and market trends the product
idea is based on?
 Is it technically feasible to manufacture the product?
 Will the product be profitable when manufactured and
delivered to the customer at the target price?

Many companies require their executives to write up new-product ideas on a

standard form that can be reviewed by a new-product committee. The write-
up describes the product, the target market, and the competition. It makes
some rough estimates of market size, product price, development time and
costs, manufacturing costs, and rate of return. The committee then evaluates
the idea against a set of general criteria. For example, at Kao Company, the
- large Japanese consumer-products company, the committee asks questions
such as these: Is the product truly useful to consumer and society? Is it good
for our particular company?
Does it mesh well with the company’s objectives and strategies? Do we have
the people, skills, and resources to make it succeed? Does it deliver more
value to customers than do competing products? Is it easy to advertise and
distribute? Many companies have well-designed systems for rating and
screening new-product ideas.

Concept development and testing

An attractive idea must be developed into a product concept. It is important

to distinguish between a product idea, a product concept, and a product
image. A product idea is an idea for a possible product that the company can
see itself offering to the market. A product concept is a detailed version of
the idea stated in meaningful consumer terms. A product image is the way
consumers perceive an actual or potential product.

o Develop the marketing and engineering details

 Who is the target market and who is the decision maker
in the purchasing process?
 What product features must the product incorporate?
 What benefits will the product provide?
 How will consumers react to the product?
 How will the product be produced most cost effectively?
 Prove feasibility through virtual computer aided
rendering, and rapid prototyping
 What will it cost to produce it?

Concept Development

After 10 years of development, DaimlerChrysler is getting ready to

commercialize its experimental fuel-cell-powered electric car. This car’s
nonpolluting fuel-cell system runs directly on methanol, which delivers
hydrogen to the fuel cell with only water as a by-product. It is highly fuel
efficient (75 percent more efficient than gasoline engines) and gives the new
car an environmental advantage over standard internal combustion engine
cars or even today’s stupefacient gasoline-electric hybrid cars.
Last year, DaimlerChrysler put 60 “F-cell” cars on the road in Japan,
Germany, and the United states to test their worth in everyday operation.
Based on the tiny Mercedes A-Class, the car accelerates quickly, reaches
speeds of 90 miles per hour, and has a 280-mile driving range, giving it a
huge edge over battery-powered electric cars that travel only about 80 miles
before needing 3 to 12 hours off recharging. Fuel cell systems are also being
tested in busses, trucks, and other vehicles.
Now DimlerChrysler’s task is to develop this new product into alternative
product concepts, find out how, attractive each concept is to customers, and
choose the best one. It might create the following product concepts for the
fuel-cell electric car:
Concept 1 A moderately priced subcompact designed as a second family car
to be used around town. The car is ideal for running errands and visiting
friends.
Concept 2 A medium-cost sporty compact appealing to young people.
Concept 3 A inexpensive subcompact “green” car appealing to
environmentally conscious people who want practical transportation and low
pollution.
Concept 4 A high-end SUV appealing to those who love the space SUVs
provide but lament the poor gas mileage.

Concept Testing

Concept testing calls for testing new-product concepts with groups of target
consumers. The concepts may be presented to consumers symbolically or
physically. Here; in words, is
concept 3: An efficient fun-to drive fuel cell-powered electric subcompact
car that seats four.
This methanol powered high-tech wonder provides practical and reliable
trans potation with virtually o pollution It goes up to 90 miles per hour and
unlike battery-powered electric cars, it never needs recharging It s priced,
fully equipped at $20000.
For some concept tests a word or picture description might be sufficient.
However a more concrete and physical presentation of the concept will
increase the reliability of the concept test Today some marketers are finding
innovative ways to make product concepts more real to consumer subjects
For example some are using virtual reality to test product concepts. Virtual
reality programs use computers and sensory devices (such as gloves or
goggles) to simulate reality A designer of kitchen cabinets might use a
virtual reality program to help a customer ‘ see how his or her kitschier
would look and work if remodeled with the company’s products. After being
exposed to the concept consumers then may be asked to react to at by
answering questions such as those. The answers will help the company
decide which concept has the strongest appeal For example the last question
asks about the consumers intention to buy Suppose 10 percent of the
consumers said they definitely would buy and another 5 percent said
“obab1y ‘The company could project these figures to the full population in
this target group to estimate sales volume Even then the estimate is uncertain
because people do not always carry out their stated intentions.

Marketing Strategy development

Suppose DaimlerChrysler finds that concept 3 for the fuel cell powered
electric car tests is best The next step is marketing strategy development
designing an initial marketing strategy for introducing this car to the market.

The marketing strategy statement consists of three parts. The first part
describes the tar get market the planned product positioning; and the sates,
market share, and profit goals for the first few years. Thus:
The target market is younger well educated moderate to high income
individuals couples or small families seeking practical environmentally
responsible transportation The car will be positioned as more economical to
operate, more fun to drive, and less polluting than today s internal
combustion engine or hybrid cars It is also less restricting than battery
powered electric cars which must be recharged regularly. The company will
aim to sell 100 000 cars in the first year at a loss of not more than $15
million In the second year the company wall aim for sales of 120,000 cars
and a profit of $25 million.

The second part of the marking strategy statement outlines the product s
planned price distribution and marketing budget for the first year:
The fuel cell powered electric car will be offered an three colors—red white
and blue—and will have optional air-conditioning and power drive features
It will sell at a retail price of $20,000—with 15 percent off the list price to
dealers. Dealers who sell more than 10 cars per month will get an additional
discount of5 percent on each car sold that month An advertising budget
of$5Q million will be split 50-50 between a national media campaign and
local advertising. Advertising will emphasize the car’s fun spirit and low
emissions. During the first year, $100,000 will be spent on
marketing research to find out who is buying the car and their satisfaction
levels.
Business analysis

Once management has decided on its product concept and marketing

strategy it can evaluate the business- attractiveness of the proposal. Business
analysis involves a review of the sales costs, and profit projections for anew
product to find out whether they satisfy the company’s objectives. If they do
the-product can move to-the product development stage. To estimate sales,
the company might look at the sales history of similar products and conduct
surveys of market opinion. It can then estimate minimum and maximum
sales to assess the range of risk. After preparing the sales forecast,
management can estimate the expected costs and profits for the product
including marketing R&D operations accounting and finance costs. The
company then uses the sales and costs figures to analyze the new product’s
financial attractiveness.

o Estimate likely selling price based upon competition and

customer feedback
o Estimate sales volume based upon size of market and such tools
as the Fourt-Woodlock equation
o Estimate profitability and breakeven point

Product development

So far for many new product concepts the product may have existed only as
a word a thawing or perhaps a crude mock-up If the product concept passes
the business test it moves into product development Here R&D or
engineering develops the product concept into a physical product. The
product development step however now calls for a large jump in investment
It will show whether the product idea can be turned into a work
able product. The R&D department will develop and test one or more
physical versions of the product concept R&D hopes to design a prototype
that will satisfy and excite consumers and that can be produced quickly aid
at budgeted costs. Developing a successful prototype can take days,
weeks, months, or even years. Often products under go rigorous tests to
make sure that they perform safely and effectively,
or that consumers will find value in them. Here are some examples of such
product tests:
Procter & Gamb1e (P&G)spends $150 million on 4,000 to 5 0O studies a
year test in everything from the ergonomics of picking up a shampoo bottle
to how long women can keep their hands in sudsy water. On any given day
subjects meet an focus groups e11 their dirty laundry to researchers put
prototype diapers on their babies bottoms and rub mysterious creams on
their faces Last year one elementary school raised $17000 by having
students and parents take part in P&G product tests Students tested
toothpaste and shampoo and ate brownies while their mothers watched
advertising for Tempo tissue P&G s paper wipes packaged to fit in a car.
At Gillette almost everyone gets involved in new product testing. Every
working day at Gillette, 200 volunteers from various departments come to
work unshaven troop to the second floor of the company’s gritty South
Boston plant and enter small booths with a sink and mirror. There they take
instructions from technicians on the other side of a small window as to
which razor, shaving cream or after shave to use The volunteers evaluate
razors for sharpness of blade, smoothness of glide and ease of handling In a
nearby shower room women perform the same ritual on their legs,
underarms and what the company delicately refers to as the bikini area. We
bleed so you. 11 get a good shave at home says one Gillette
employee.

Test marketing

If the product passes functional and consumer tests, the next step is test
marketing the stage at which the product and marketing program are
introduced into more realistic market settings. Test marketing ’gives the
marketer experience with marketing the product before going to the great
expense of full ‘introduction. It lets the company test the product and its
entire marketing program-positioning strategy advertising distribution
pricing branding and packaging and budget levels. The amount of test
marketing needed varies with each new product Test marketing costs can be
high, and it takes time that may allow competitors to gain advantages.

o Produce a physical prototype or mock-up

o Test the product (and its packaging) in typical usage situations
o Conduct focus group customer interviews or introduce at trade
show
o Make adjustments where necessary
o Produce an initial run of the product and sell it in a test market
area to determine customer acceptance
 When the costs of developing and introducing the product are low or when
management as already confident about the new product the company may
do little or no test marketing In fact test marketing by consumer package-
goods firms has been declining in recent years Companies often do not test
market simple line extensions or copies of successful competitor products
For example. P&G introduced its Folgers’s decaffeinated coffee crystals
without test marketing and Pillsbury rolled out Chewy granola bars and
chocolate covered Granola Dips with no standard test market. However
when introducing a new product requires a big investment or when
management is not sure of the product or marketing program a company
may do a lot of test marketing. For instance Lever USA spent 2 years testing
its highly successful Lever 2000 bar soap in Atlanta before introducing it
internationally. Frito-Lay did 18 months of testing in three markets on at
least five formulations before introducing its Baked Lays line of low fat
snacks. And Nokia test-marketed its N-Gage cell phone/mobile game player
extensively in London before introducing it worldwide.

Standard test Marketing

Using standard test markets, the company finds a small number of

representative test cities conducts a full marketing campaign in these cities
and uses store audits consumer and distributor surveys, and other measures
to gauge product performance. The results are used to forecast national sales
and profits discover potential product problems and fine tune the marketing
program.
Standard test markets have some drawbacks. They can be very costly and
they may take a long time—some last as long as 3 to 5 years Moreover
competitors can monitor test market results or even interfere with them by
cutting their prices in test cities increasing their pro motion or even buying
up the product being tested. Finally test market give competitors a look at
the company’s new product well before it is introduced nationally Thus
competitors may have tune to develop defensive strategies and may even
beat the company s product to the market For example while CLOROX®
was still test marketing its new detergent with bleach in selected markets
P&G launched Tide with Bleach nationally Tide with Bleach quickly
became the segment leader GLOROX® later withdrew its detergent Despite
these disadvantages standard test markets are still the most widely used
approach for major in-market testing However many companies today are
shifting toward quicker and cheaper controlled and simulated test marketing
methods.
Control Test Marketing
Several research firms keep controlled panels of stores that have agreed to
carry new products for a fee Controlled test marketing systems like
ACNielsen’s Scan track and Information Resources Inc s (IRI) Behavior
Scan track individual consumer behavior for new products from the
television set to the checkout counter.
In each Behavior Scan market WI maintains a panel of shoppers who report
all of their purchases by showing an identification card at check-out in
participating stores and by using a handheld scanner at home to record
purchases at nonparticipating stores. With in test stores, IRI controls such
factors as shelf placement price and ia-store promotions for the product
being tested IRI also measures TV viewing in each panel household and
sends special commercials to panel member television sets Direct mail
promotions can also be tested.

Commercialization

Commercialization is the process or cycle of introducing a new product into

the market. The actual launch of a new product is the final stage of new
product development, and the one where the most money will have to be
spent for advertising, sales promotion, and other marketing efforts. In the
case of a new consumer packaged good, costs will be at least $ 10 million,
but can reach up to $ 200 million. In general one can say that it will cost
about a dollar for each dollar of sales turnover achieved.

Commercialization is often confused with sales, marketing or business

development. The Commercialization process has three key aspects:

1. The funnel. It is essential to look at many ideas to get one or two

products or business that can be sustained long-term
2. It is a stage-wise process and each stage has its own key goals and
milestones
3. It is vital to involve key stakeholders early, including customers

Commercialization of a product will only take place, if the following four

questions can be answered:

When?

The company has to decide on the introduction timing. When facing the
danger of cannibalizing the sales of the company’s other products, if the
product can be improved further, or if the economy is down, the launch
should be delayed.

Every single bank in Nigeria today has been commercialized. But its sad
enough to know that most of these banks are not straight forward in their
various dealings with their clines/customers.

Where?

The company has to decide where to launch its products. It can be in a single
location, one or several regions, a national or the international market. This
decision will be strongly influenced by the company’s resources, in terms of
capital, managerial confidence and operational capacities. Smaller
companies usually launch in attractive cities or regions, while larger
companies enter a national market at once.

Global roll outs are generally only undertaken by multinational

conglomerates, since they have the necessary size and make use of
international distribution systems (e.g., Unilever, Procter & Gamble). Other
multinationals use the “lead-country” strategy: introducing the new product
in one country/region at a time (e.g. Colgate-Palmolive).

To Whom?

The primary target consumer group will have been identified earlier by
research and test marketing. These primary consumer groups should consist
of innovators, early adopters, heavy users and/or opinion leaders. This will
ensure adoption by other buyers in the market place during the product
growth period.

How?

The company has to decide on an action plan for introducing the product by
implementing the above decisions. It has to develop a viable marketing mix
and create a respective marketing budget.

Test marketing gives management the information needed to make a final

decision about whether to launch the new product. If the company goes
ahead with commercialization— introducing the new product into the
market—it will face high costs The company may have to build or rent a
manufacturing facility. And it may have to spend in the case of a new
consumer packaged good between $10 million and $200 million for
advertising sales promotion, and other marketing efforts in the first year.
The company launching a new product must first decide on introduction
timing. If DaimlerChrysler s new fuel cell electric car will eat into the sales
of the company s other cars its introduction may be delayed If the car can be
improved further, or if the economy is down, the company may wait until
the following year to launch it.
Next, the company must decide where to launch the new product—in a
single location, a region the national market or the international market. Few
companies have the confidence capital and capacity to launch new products
into full national or international distribution. They will develop a planned
market rollout over time. In particular small companies may enter attractive
cities or regions one at a time Larger companies, however may quickly intro-
1uce new models into several regions or into the full national market.

There are the following step of commercialization.

o Launch the product

o Produce and place advertisements and other promotions
o Fill the distribution pipeline with product
o Critical path analysis is most useful at this stage

Organizing for new product Development

Many companies organize their new product development process into the
orderly sequence of starting-with idea generation and ending with
commercialization Under this sequential product development approach one
company department works individually to complete its stage of the process
before passing the new product along to the development next department
and stage. This orderly step-by step process can help bring control to
complex and risky projects. But it also can be dangerously slow. In fast
changing highly competitive works markets such slow but sure product
development can result in pro4uct failures lost sales arid profits and
crumbling market positions Speed to market and reducing new product
development cycle time have become pressing concerns to companies in all
industries.
In order to get their new products to market more quickly many companies
are adopting a faster team-oriented approach called simultaneous product
development (or team bad or collaborative product-development) Under this
approach company departments work closely together through cross
functional teams overlapping the steps in the product development process
to save time and increase effectiveness Instead of passing the new product
from department to department the company assembles a team -of people
from various departments that Stays with the new product from start to
finish. Such teams usually include people from the marketing finance
design, manufacturing and legal departments and even supplier and
customer companies.
top management gives the product development team general strategic
direction but no clear cut product idea or work plan It challenges the team
with stiff and seemingly contradictory goals— turn out carefully planned
and superior new products but do it quickly —and then givers the team
whatever freedom and resources it needs to meet the challenge In the
sequential process a bottleneck at one phase can seriously slow the entire
protect In the simultaneous approach, if one functional area hits snags it
works to resolve them while the team moves on.
The Data Collection

Primary Data

BOOKS

Principal of Marketing (Eleventh Edition)

Part III

Chapter# 9

Page # 274,276,280,282

Web site

www.learnmarketing.net

www.wikipedia.org
 www.infotrends.com

Secondary Data

Organization

P&G Pakistan Private (Ltd)

Web site

www.pg.com

Practical Study

Procter & Gamble Pakistan Pvt Ltd

WHO WE ARE

Three billion times a day, P&G brands touch the lives of people around the world. We are
one of the largest and strongest portfolios of trusted, quality, leadership brands. At P&G,
the people who develop and build the brands are the foundation of our success.

• Building Diversity in the Organization

• Developing Skills and Nurturing Talent
• Providing Quality Assurance, Meeting Safety Standards

OUR COMMITMENT

At P&G, we believe in giving back to the communities we live in. Corporate social
responsibility is close to P&G’s heart. P&G develops and runs several initiatives and
programs aimed at helping communities and improving people’s lives, especially
children.

OUR HISTORY
P&G commenced operations in Pakistan in 1991. Headquartered in Karachi, our goal was
to become the finest global consumer goods company operating locally in Pakistan. To
fulfill this goal, we are serving Pakistani consumers with 12 brands that strive to make
their everyday lives better.

PRODUCT INFORMATION

We are committed to providing products of consistently excellent quality and standards

— products that have a positive effect on the lives of the world's consumers. As we
continue to succeed in this aim, we can keep growing as a marketing community.

PRODUCTS RANGE
Data Analysis

Why are some companies so successful at new product development? And

how do some businesses make it seem so easy – one new product winner
after another? Consider Procter & Gamble: Total sales at P&G increased by
$8 billion in 2004, with new product winners playing a important role. The
IRI cites P&G as the clear winner in its annual New Product Pacesetters
report: In the non-food category, five P&G new products were in the top ten
best-sellers, with Prilosec OTC and Crest Whitestrips Premium in the #1 and
#2 positions.
Exceptional performance in product development in companies such as P&G
is no accident. Rather, it’s the result of a disciplined, systematic approach
based on best practices. This article highlights many of the key factors that
distinguish best performing businesses, such as P&G, from the rest. To show
proof that these best practices really do have an impact on performance,
we present research conclusions from a recent major APQC study.2 Not
surprisingly, P&G, an exemplary company in new product development, has
implemented many of these practices; thus, we use the company as a superb
a case illustration to show many of these best practices in action. Authors’
notes: In this article, we use the term “new products” to mean any change to
the product visible to the consumer or customer; these include true new-to-
world products as well as new items in an existing product line, significant
modifications and improvements, and extensions. The term “customer”
means immediate customer, for example a retailer; and the term “consumer”
means the end user.
The Innovation or Initiatives Diamond to guide new product development
Four major factors or forces drive a business’s new project performance,
according to the APQC (American Productivity & Quality Center) best
practices study. The Innovation Diamond3 in Exhibit 1 illustrates these four
points of performance:
• Having a product innovation and technology strategy in place for the
business.
• Having an effective and efficient idea-to-launch process or Stage-
Gate® system.
• Resource commitment and focusing on the right projects – portfolio
management.
• People – having the right climate and culture, effective cross-
functional teams, and senior management commitment to new product
development.

Procter & Gamble’s management in the 1990s subsequently transformed the

triangle into their Initiatives Diamond, shown in figure P&G’s major “aha”
was that there is no one key to success in product innovation, and thus
management stepped back
from a focus on individual initiatives and looked at the broader picture. For
example, having a great idea-to-launch process is not sufficient – it’s not a
standalone driver of positive performance.
P&G’s Initiatives Diamond serves as a guide for each business’s product
innovation efforts, and helps to focus management’s attention on what is
important to success. Here’s what Bob McDonald, P&G’s Vice Chairman of
Global Operations, says: “The Initiative Diamond played a significant role
in improving the business results in P&G’s Fabric & Home Care global
business unit. This work brought us a new discipline to manage our
innovation programs, and yielded a major increase in the in-market success
of our initiatives. We aligned our organization on how to use Stage-Gate®
success criteria and portfolio and resource management to deliver better
innovations for the consumers we serve.
About Marketing

Did you know P&G invented the concept of brand, brand management and
even the Soap Opera (originally designed to showcase our soap powders on
TV)? Over the years, we¹ve remained consistently on the cutting edge of
marketing always finding new and exciting ways of reaching consumers. So,
it’s not surprising that some of the world’s best marketing pros started here.
Here, you will lead a brand’s strategic choices and vision, product and
commercial innovations, and marketing elements across all media, while
collaborating with multi-function teams and agency partners. You will need
to make tough calls to a build a brand’s market shares and deliver profit to
P&G shareholders. Join us today if you¹re ready to challenge paradigms and
push creative boundaries to propel brand building to a new level. A degree is
required.

Concept Development

There is following example of concept development Procter & Gamble’s

and Kimberly Clerks moist toilet papers tested after launch received an F in
AcuPOLL Both companies spent millions to launch these products but have
since withdrawn them from the market Consumers saw Wet toilet paper as
unique but didn’t find the benefit to be all that compelling AcuPOLL has
found that-just being different doesn’t lead to market success.

Product Development

Procter & Gamb1e (P&G) spends $150 million on 4,000 to 5 0O studies a

year test in everything from the ergonomics of picking up a shampoo-bottle
to how long women can keep their hands in sudsy water On any given day
subjects meet an focus groups e11 their dirty laundry to researchers put
prototype diapers on their babies bottoms and rub mysterious creams on
their faces. Last year one elementary school raised $17 000 by having
students and parents take part in P&G product tests Students tested
toothpaste and shampoo and ate brownies while their mothers watched
advertising for Tempo tissue P&G s paper wipes packaged to fit in a car.
Conclusion &
Recommenda
tions
Conclusion
The strategy behind the developing and implementing of product is not an
easy thing most of organization struggling in this part of business. As I
mention in my practical study Procter & gamble says this process the
initiative. The whole process is not based on well idea which can took from
research department internal or external sources of organization. Idea
screening is also very important it is essential to pick the positive values of
idea and refine the negative one. Marketing strategy and business analysis is
also significant potion. With out dealing market situation and competitor
movement it is very dangerous to work some new product development.
According to P&G initiative management diamond innovation strategy and
measure is the top of this diamond. Product development is not an easy stage
its contain different kind of planning like resources planning, strategic
planning. The resources of any organization play a vital role in product
developing big organization normally rely on there internal resources which
are much benefited for them. If we conceder all the part of test marketing it
is the key of conclusion the organization understand who much they are
good in research or they have good idea of market. The organization also
know who much they are superior to read the market condition a bad result
of test marketing can create a bad effect of organization soil.
Commercialization is also imperative. High class commercialization can
create a huge impact and arrange fine plate foam for the product. P&G are
working in Pakistan from a wile there product developing process is totally
out of Pakistan but they lunch there product rapidly in this region and for
this they need high quality commercialization. In Pakistan P&G doing well
in product commercialization and the proof is there product success.
In my opinion P&G is one of the best non food product organization which
not only sell there product in Pakistan but they also introduce the new one.
Recommendation
As I already admire this P&G doing well in our region they working
on new product and introduce in our country. But they research in other
countries and in the result of there research they develop new product
according to the research which is belong from that region where the
research held. So P&G also lunch there research in Pakistan and develop the
product. These product represent us and also it is according to our needs.

References

BOOKS

Principal of Marketing (Eleventh Edition)

Part III

Chapter# 9

Page # 274,276,280,282
Website

http://learnmarketing.net/product.htm
http://en.wikipedia.org/wiki/New_product_development
http://www.npd-solutions.com/strategy.html

http://www.infotrends.com/public/Content/MRD/Projectdescriptions
/productconcepttesting.html

http://www.businessplans.org/Market.html
http://www.proddev.com/pdf/Succeeding_at_New_Products_the_PG_
Way.pdf
www.pg.com