A NEW PRODUCT DEVELOPMENT ON MARKET STRATEGY

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1 A NEW PRODUCT DEVELOPMENT ON MARKET STRATEGY MADA SRIKANTH REDDY, MBA K. MAMATHA, Assistant Professor Dr. T. SRINIVASA RAO, Professor &HOD DEPARTMENT OF MBA INSTITUTE OF AERONAUTICAL ENGINEERING,DUNDIGAL,HYDERABAD ABSTRACT Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc. It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level. It can be found out what market characteristics your target market has. With market research, companies can learn more about current and potential customers. Most of the Realtors and businessmen use Internet next to News paper for advertising. Most of the Realtors and businessmen have own websites. I have found that Most of the Realtors and businessmen think website is the easiest way of advertising. As per my Survey I found that many online Advertising sites serve somewhat important to Realtors. As Most of the Realtors and businessmen think Online advertising is Expensive so it will be better to use penetration method. As most of the websites do not provide clear information with images so it will be better to include images in our website. Most of the Advertisement websites target only realtors so it will be better to provide an opportunity for businessmen like Developers, Suppliers, etc. Most of the buyers buy on installment basis so it will be better to provide information of financial institutions or bankers who provide credit facility. I. INTRODUCTION The purpose of market research is to help companies make better business decisions about the development and marketing of new products. Market research represents the voice of the consumer in a company. A list of questions that can be answered through market research: What is happening in the market? What are the trends? Who are the competitors? How do consumers talk about the products in the market? Which needs are important? Are the needs being met by current products? A simple example of what market research can do for a business is the following. At the company Chevrolet they brought several disciplines together in a crossfunctional team to develop a concept for a completely new Corvette. This team enabled the marketers to come up with an alternative concept, one that balanced 4 attributes: comfort and convenience, quality, styling, and performance. This was considered radical because comfort and convenience were not traditional Corvette values. However, market research demonstrated that consumers supported the alternative concept. As a result the new Corvette was a huge success in the market. There are two types of Market research, Primary and Secondary. [Burns 2001] For starting up a business there are a few things should be found out through market research in order to know if your business is feasible. These are things like: Market information Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats. The most basic form of market information is the best quotation and last sale data, including the number of shares, with respect to a particular security at a given time. [Market research 2006] Examples of market information questions are: Who are the customers? Where are they located and how can they be contacted? What quantity and quality do they want? What is the best time to sell? What is the long-term or historical price data over a number of years? Page No:1720

2 What is the expected production in the country? Market segmentation Market segmentation is the division of the market or population into subgroups with similar motivations. Widely used bases for segmenting include geographic differences, personality differences, demographic differences, use of product differences, and psychographic differences. Market trends The upward or downward movements of a market, during a period of time. The market size is more difficult to estimate if you are starting with something completely new. In this case, you will have to derive the figures from the number of potential customers or customer segments. [Mar 1998] But besides information about the target market you also need information about your competitor, your customers, products etc. A few techniques are: Customer analysis Competitor analysis Risk analysis Product research Advertising research In the last chapter you can read how to perform market research, with interviews and questionnaires, but there is already a lot of information available. Market research firms and industry experts publish much of their information on websites, and in trade and business magazines. Reference sites index these magazines, many offer the texts online and if not the libraries stock them. Trade associations publish many listings and statistics on their websites as well as in hard copy publications. So there is already a lot of information available. Perform market research This chapter introduces the steps involved in the market research process. It also provides you with a brief preview of each of the steps necessary to conduct a market research effort. As you can see in figure 1, the market research process has 4 basic steps. These steps include: Defining the research problem Establishing the research design Collecting and analyzing data Formulate findings Figure 1 is the meta-process model of market research. The model shows every activity that must be performed. And every activity has a few sequential activities. Every sequential activity is connected with an arrow which implies that these activities need to be carried out in a pre-defined order. Figure 1: Meta-process model for Market research The study is specifically aimed at; Highlighting and emphasizing the importance of marketing research on new product development. To examine the effect / extent of marketing research contribution to new product development. Examine circumstances under which marketing research is more likely to be used in the stage of new product development. Identify the factors that influence marketing research on new product development Also recommend as the need arises in order to create customers satisfaction II. NEW PRODUCT DEVELOPMENT The NPD process consists of the activities carried out by firms when developing and launching new products. A new product that is introduced on the market evolves over a sequence of stages, beginning Page No:1721

3 with an initial product concept or idea that is evaluated, developed, tested and launched on the market (Booz, Allen & Hamilton, 1982). This sequence of activities can also be viewed as a series of information gathering and evaluation stages. In effect, as the new product evolves, management becomes increasingly more knowledgeable (or less uncertain) about the product and can assess and reassess its initial decision to undertake development or launch. Following this process of information gathering and evaluation can lead to improved new product decisions on the part of firms by limiting the level of risk and minimizing the resources committed to products that eventually fail. The NPD process differs from industry to industry and from firm to firm. Indeed it should be adapted to each firm in order to meet specific company resources and needs (Booz, Allen & Hamilton, 1982). Many researchers have tried to develop a model that captures the relevant stages of the NPD process (Ulrich & Eppinger, 2011; Wind, 2001; Cooper, 2001; Crawford, 1987; Scheuing, 1974). A number of detailed NPD models have been developed over the years, the best known of which is the Booz, Allen and Hamilton (1982) model, shown if Figure 1, also known as the BAH model, which underlies most other NPD systems that have been put forward. This widely recognized model appears to encompass all of the basic stages of models found in the literature. It is based on extensive surveys, in depth interviews, and case studies and, as such, appears to be a fairly good representation of prevailing practices in industry Figure 1. Stages of New Product Development (NPD) STAGES OF NEW PRODUCT DEVELOPMENT The stages of the model are as follows: New Product Strategy: Links the NPD process to company objectives and provides focus for idea/concept generation and guidelines for establishing screening criteria. Idea generation: Searches for product ideas that meet company objectives. Screening: Comprises of an initial analysis to determine which ideas are pertinent and merit more detailed study. Business Analysis: Further evaluates the ideas on the basis of quantitative factors, such as profits, Returnon-investment (ROI), and sales volume. Development: Turns an idea on paper into a product that is demonstrable and producible. Testing: Conducts commercial experiments necessary to verify earlier business judgments. Commercialization: Launches products. TYPES OF MARKETING RESEARCH Marketing research techniques come in many forms, including: Ad Tracking periodic or continuous in-market research to monitor a brand s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005) Advertising Research used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad s ability to get attention, communicate the message, build the brand s image, and motivate the consumer to purchase the product or service. (Young, 2005) brand equity research - how favorably do consumers view the brand? brand name testing - what do consumers feel about the names of the products? Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer consumer decision process research - to determine what motivates people to buy and what decisionmaking process they use customer satisfaction studies - exit interviews or surveys that determine a customer's level of satisfaction with the quality of the transaction demand estimation - to determine the approximate level of demand for the product distribution channel audits - to assess distributors and retailers attitudes toward a product, brand, or company Internet Strategic Intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion Page No:1722

4 formers" Marketing Effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products. Positioning research - how does the target market see the brand relative to competitors? - what does the brand stand for? price elasticity testing - to determine how sensitive customers are to price changes sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc. store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market III. RESEARCH METHODOLOGY Data Collection Tools Primary Data: The data collected was /is primary data. It requires to meet the objectives of the project was obtained mainly as primary data to know the opinion of the respondents about the process of advertising. Secondary Data: Secondary Data includes the collection of information from several journals, reports, magazines and through internet etc. Sample Design: A sample design of 50 respondents was taken and segmented into Realtors, Suppliers, Developers and Constructors. Type of Questionnaire: The questionnaire consists of open ended, multiple choice dichotomous and closed ended questions. To evaluate the true picture of advertising process, the data was collected, classified, analyzed and interpreted the results were converted into percentages and numbers so as to know the correct figure of preference. IV. DATA ANALYSIS AND INTERPRETATION 1. How do you Advertise your business? The above table discloses the facts that most of the respondents i.e., 40% use newspaper for advertising, 30% of them uses their own advertisement tools.,28% of the respondents are using online media for advertising.only2% of them are using Television as their advertising tool. 2. Do you think website is the easiest way of advertisement? The above chart reveals that 58% of respondents are thinking website is an easiest way of advertising, 42% of them do not agree with these. So, there is an increasing demand in Online advertising. Page No:1723

5 3. How do you expose your ventures to public? Looking at the above scenario we can easily say that most of the respondents use internet for selling purpose. The figures include 15% supplying purpose 30% for buying,40% selling and 15% others. V. CONCLUSION In this paper we conclude that New product success still remains the critical challenge for companies. Many companies are aware of the major role new products must play in their future and quest for prosperity: companies are constantly searching for ways to revitalize, restructure and redesign their NPD practices and processes for better results Looking at the above picture 40% of the respondents use newspapers, 38% use internet, 20% of the respondents are using their own way. By these we can conclude many respondents are advertising their ventures through Newspapers and Internet. 4. What is the purpose of your watching these sites? Marketing research would lead to higher NPD success, and that the integration of marketing research would be the most important of the factors contributing to success in NPD organization. Companies which use marketing research intensively and understand consumer response in great depth are more likely to have higher success rates. The more extensive use of marketing research appears to be related to more experience in doing NPD and a larger role for new products in the companies. Use of marketing research also allows companies to set quantitative goals for new products, and more carefully evaluate performance after launch. Also most organizations can be regarded as pace setters or market leaders in their various markets, if only they take time in doing marketing research on New Product Development. BIBLIOGRAPHY Marketing Management : Philip Kotlar Principles of Marketing : Philip Kotlar Marketing Research : G.C.Berri Marketing Research : D.D.Sharma Page No:1724