New Product Development Lesson Answers
LM Ltd is considering diversifying its activities and moving into the PDA (Personal Digital Assistant) market. Right now it is just an idea, but one which they are seriously considering. A project team has been established to oversee a possible launch of a PDA under the LM brand.
Task: Work through the eight stages of new product development to see how a PDA could be launched within the market.
Stage One: Idea Generation
The company could first of all look at competitor products to try to get some ideas about exactly what today's PDA's offer. They could also set up consumer focus groups to discover why PDA's are purchased , what functions are most commonly used, what they dislike about them, and how they would improve them. Retail focus groups could also be established to discover what PDA's have a quicker turnaround time then others and why. The collection of ideas at this stage should help LM ltd discover what types (s) of PDA's they could bring onto the market.
Stage Two: Idea Screening
The project team will have to shift through all the ideas they have generated from their focus groups and competitor research and select a feasible development for their PDA. Their PDA must have some form of unique selling proposition
Stage 3: Concept development and testing
LM Ltd after finalising the idea for their PDA, will have to take that idea and present it to their consumer market and retail outlets that would eventually sell them. What do they think about this new PDA. Does it plug a current hole in the market? Is there a perceived benefit? Any feasible ideas and suggestions will have to be taken on board and evaluated.
Stage 4: Marketing strategy and development
The PDA has passed the concept test, now the team has to put together a marketing strategy. This marketing strategy will include a marketting mix strategy for the PDA, the positioning strategy it will take within the market., the segmentation tactic it will adopt and so on.
Stage 5: Business Analysis
A detailed breakdown of costs of producing the product, markets share forecasts, sales and profitability are thrashed out to make sure that developing this product will be financially worth while for the company.
Stage 6: Product development
A prototype of the PDA will be developed by research and development and tested amongst the target market. Is the PDA successful in offering the benefit to the end user. Is it superior to competitors? If there are problems with the prototype then the PDA will have to be modified.
Stage 7: Test Marketing
The PDA will be test marketed with a selected region, possibly a city. How are consumer reacting to it? How are retailers reacting to it? What are the thoughts of consumer electrical magazines? Will the feed back LM LTD collect from this stage mean that they may have to make changes to one or some of the elements of the marketing mix?
Stage 8: Commercialization
Finally LM Ltd has reached commercialisation stage. Timing is crucial. LM Ltd could launch during christmas time or launch the product just within city areas first before they go full market entry.
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