Do we really need so many new products in the market? This
is certainly a tricky question. We are in mad race at the market place. I often
get reminded of a tale of African lion and a deer in their race for survival.
For survival the lion has to run faster that the slowest deer and the deer has
to run faster that the fastest lion. This is the race for survival. We have now
reached such a stage in market, where we have to keep running just to stay at a
place. The faster you run; you can be ahead of others. One of the reasons for
this race is the shortening of maturity phase in PLC of the products. The
consumer demands are changing every day. What was sought after yesterday is not
needed today. Samsung, Apple and many others are introducing new products at
frequent intervals may be at the cost of previous versions of newer products. Thanks
to shifts in consumer taste or purchasing behavior, increase in GNI, technological
innovations and demographic trends. These all factors are catalysts for creating
opportunities for new products.
The age old concept of five stages (some authors recommend
eight stages) viz. Idea Generation, Screening, Concept Development, Product
Development and Commercialization is valid but there are changes in the
approach. There is no doubt that ideas generally guide the process of new
product development, but the way ideas are coming forward is different today. Today
it is far more important to observe and listen, and the way we do it is
different. The social media, internet has great importance in how we “listen
and observe”. Thanks to technology. Observing the world around us and
discovering customer problems or needs is critical. OLA in India has to an
extent succeeded in identifying the customer need. OLA and other aggregators
have their own niche and that makes the co-founder of OLA a youngest super rich
in India. It was the idea that created this business but just the idea is not
enough.
Determining the Market Potential is more important. Thorough
research is to be carried out to ascertain how large the market for the product
is, how many potential customers are out there and what/how is the competition.
In case of tangible product investment are higher due to raw material
procurement, manufacturing, inventories and physical distribution therefore
before committing the company's human and financial resources for developing a
product prototype and bringing it to market, make sure that a thorough research
is done.
Apart from conducting research and understanding the
statistical jugglery it is imperative to thoroughly test the idea by talking to
current customers and prospects, as well as industry participants such as
vendors, sales personnel and distributors. Their feedback is also useful in
proving that there is a viable market for your product idea. Create a product
concept, take customer’s viewpoint.
Idea is to be designed, manufactured and delivered in
financial and time framework. Once there is a green signal at this stage then
the embarking upon further journey is advisable to follow the steps of product
development and commercialization. However time is the essence of all these
activities. The process of finding an idea, evaluating it, creating the product
and implementing a marketing plan for it can stretch over a longer period. The
changing consumer needs and technological changes can stump the efforts and it
would be too late to realize that the new product developed was needed a year
back and not today. There is a need to think ahead. Need to be proactive to
consumer needs, not just reactive. Be proactive and plan ahead. Don’t land up
in a situation that the need for the product is eliminated by the time the
product is ready. There is also need to plan for funding and HR, many times
this is not done and then the resource constrains contribute to product
failure.
Be on a traditional path for new product development and
subsequent business plan but take a different approach. The factors like shifts
in consumer taste or purchasing behavior, technological innovations and
demographic trends have changed the canvas and will keep changing. The
traditional approach may not work in this scenario, thus the need to think and
act differently. I get reminded of blue ocean strategy to make competition
irrelevant and offer something unique that offers a competitive advantage. And
this advantage has to be sustainable in market.
Another important issue that has emerged in this globalized
world is consideration to IPR. With WTO as watchdog and different legal systems
in place the new product development has another dimension of concern.
The customers are increasingly becoming solution or service
oriented. Six sigma may not be possible for everyone, thus service and
information dissemination becomes extremely important. Most of the companies
are going for outsourcing this activity which adds another dimension of
complexity. The business plan has to have provisions for this. Uncertainty over
the maturity phase of the new product exists and this forces one to be
proactive for product/brand extensions, adding new features, and for value
additions. The core benefit of cell phone is gone. This tiny gadget has more
capabilities than the super computer US had years back. The iPhone commercials
are out to position the product as a superior video recorder rather than a cell
phone. Is it because of change in consumer need/usage or because the Apple PMT is
proactive? This can be debated but proves the point. The photographic material
company like Kodak considered Fuji as its competitor and both would have never
dreamt of competition from cell phone manufacturers for their products.
Musicians and music companies like HMV, RCA, got trounced by digital
revolution. It is getting difficult to understand who your competitor is and
will be. Best selling products can get obsolete and unknown products can rule
the market. We kept on worrying for world economy in relation to US recession,
Greece problems, but less than a month back China emerged in forefront of the
global economic issues. Can China problems help India to grow? Can we develop
the products that will replace Chinese innovations or duplications? This is the
extent of uncertainty in the market. Developing business plans keeping all
these known and unknown issues is more complex.
Once due consideration is given to all aspects discussed so
far, and then the major activity of STP has to be carried out. Forecasts and budgets
will be in place. This elaborates the financials. The balance sheet, P&L
and eventually BE will be understood. The STP will guide to design marketing
strategy that needs to be properly implemented for desired results. Good
strategy and good implementation will ensure success.
The new product development in the past was never as complex
as it is now. Today one need not be a scientist like Edison or James Watt or
Graham Bell to offer new products, undoubtedly they were great, but today one
certainly has to be a good product manager to get new products developed.
