Professional Documents
Culture Documents
Class : M08A
The first stage in the new product development is idea generation. This stage
is where idea to put adding value to a product is being generated. The next
stage is idea screening. The ideas generated are screened for implications
whether the ideas are relevant for the product development or not. For
instance, the ideas are screened to cover issues such as resources and
finance to develop this new product. This stage is followed by the product
development and testing stage. This involves the production of prototype and
test marketing for potential customers. This is where feedbacks from these
potential customers are crucial for the firm to allow it to assess the possible
reactions to the new product and to further the firm’s marketing mix in order
to sell the developed product successfully. The prototype would be altered
until final product is produced. After that, the product has to undergo the
business analysis stage where management will view into the legal, financial
and resource viability to launch the new product. The final stage is the
commercialization ( on what scale?)- use the diifusion process as a
justification! of the develop product or the launching of the product. The
product will be distributed to retail outlets and various promotional
campaigns will be done to commercialize the new developed product. During
this stage, the firm is most likely to create awareness among potential
customers about the existing of the newly developed product.
5 marks
The major drawback of funding the R&D in the fact paced technological era is
it the product will become outdated fast. This is because when newly
developed product has just been launched, it will take only a short time for
other firm in the market to come up with a better and developed product due
to the advancement of technology. Besides that, manufacturing process
becomes simpler and faster. Thus, it is highly probable for a firm to produce
in the quantities required faster and more cost efficient, something that is
unattainable back then, ….so how this un-avail the finance?? Internal finance
& lenders???. Another problem of financing R&D is the financial or cost
constrain. This is because, the development of products during this era is
more expensive compared to that during the yesteryears. As technological
boundaries have been pushed forward, the cost of even modest new product
development has risen sharply due to the more advanced utilities and
research. In fact, new discovery is made each day through research and the
cost of carrying out research that is only useful for a temporary period is just
not worthy. Another constrain is, rapid technology change also means rapid
change of customers’ tastes because people nowadays are easily bored with
products. People are not as loyal to a product as they used to. It means that
the products have increasingly shorter life spans. This means the less time is
available to recover the development cost and at the end, the firm is unable
to compensate for the money invested to develop the product. The answer is
to the ‘ problems of R&D in…not ‘problems of financing….’…be careful to look
at the key phrases.. 5/8
c) Analyse the effects of having a balanced product portfolio.
Name sign logo symbol slogan identity differentiation legal protection price
inelastic packaging price promotion distribution individual brand family brand