Companies are competing to sustain and improve their market share by introducing new products that meet or exceed

customers expectations in terms of quality, innovation, cost, service and delivery time. As such, there is a need for a New Product Introduction and Development A product can be considered new under the following situations:New-to-the-world products ,New product lines ,Additions to existing product lines, Improvements and revisions of existing products, Repositioning, Cost reductions

Stages of new product development Before the introduction of a product into the market, it goes through several stages of development. These stages are known as stages of new product development. It includes the following: Idea generation: Companies seek new ideas to enhance the performance of the existing products and the innovation of new ideas. This stage is called idea generation stage. There are many sources for idea generation. It may be from customers, dealers etc. Employees throughout the company can also be a source of idea. Toyota claims that its employees submit two million ideas annually over 85% of which are implemented. Companies also find good ideas by researching competitors products and services. They can find out what the customers like or dislike about their competitors products. Ideas can also come from investors. External research, surveys industrial publications research and development etc. But the main source of idea generation is the customers by their grievances and complains and feedback. However, although ideas can flow from many sources, it is not feasible to implement all the ideas generated due to lack of time and capital. Idea screening: The main purpose of idea generation is to collect a larger number of ideas. However, not all ideas can be commercially viable. Therefore, the companies filter the less viable ideas with the help of systematic process. Companies can use various parameters to screen the ideas such as market size, technical capabilities, potential competition etc. Addressing the following issues will also help the companies to analysis the attractiveness of ideas. Whether the product idea match the existing products of the company. The degree to which the new product can cannibalize the sale of the existing product. Companys ability to produce and market the product.

Buying behavior and the probable changes in the environment. While screening the ideas, an organization may commit two types or errors. Drop error where the firm rejects a very good idea. Cro error where a company selects a poor idea.

Concept testing and development: All ideas that survive in the process of screening will be studied in details. They will be developed into mature products. At this stage, the idea is submitted for the external evaluation to get a feedback from the market. It helps a firm are organization to collect important information like customers initial reactions towards the product development. During this stage, new product idea is described in the form of one or more benefit that is then presented to a sample of potential customers for their reactions. Marketing strategy: Following a successful concept test, the new product manager will develop a preliminary strategy plan for introducing new product in the market. The plan consists of three parts. The first part describes the target market size, structure and behavior for the first few years. The second part outlines the planned price distribution strategy and marketing budget for the 1st year. The third part of marketing strategy plan describes the long run sales and profit goals and the marketing mix strategy over time.

Business analyses. After management develops the product concept and market strategy, it can evaluate the business attractiveness. Business analyses are the first in-depth financial evaluation of new product to be developed. Here management needs to prepare sales cost and profit projections to determine whether they satisfy company objectives. If they do, then concept can move to the development stage. SWOT analysis will be conducted at this stage by the organization. It also includes the following: Total sales estimation:These are the sum of estimated first- time sales, replacement sales and repeat sales. Its method depends upon whether the product is one time purchase(an engagement ring), an infrequently purchased products like toaster, auto mobile etc. or a frequently purchased products like consumer and industrial non durables.

Estimation costs and profits. The R&D, manufacturing, marketing and financial departments estimates the costs. The profitability of the new product is estimated through various financial tools. The simplest technique is the breakeven analysis in which the management estimates how many units of the product the company would have to sell to break even with the given price and cost structure. If the management believes that sales could easily reach the break even number, it is likely to move the project into development stage. Product development In this stage, detailed technical analysis is conducted to know whether the product produced at costs is low enough to make the final price attractive to the customer. Here a working model or a prototype is developed to disclose all tangible and intangible attributes of the product. A product protocol is prepared which is a detailed downiest containing the important attributes that are expected in the product. Once the protocol has been developed, it is handed over to the research the development department to develop the prototype of the product.

Test marketing: The test marketing is the stage where the product is introduced in a few selected cities. During this stage, the company has to fate the following expense: High advertisement High manufacturing cost. High distribution cost etc. For testing the product, marketer needs to make the decision on the following issues. The no. of cities in which the product is to be tested. Geographic location of the cities. Time to carry ort test marketing Through this exercise, company can know the customers response, feedback, suggestions, complaints and any other changes required to be done for product modification. After successfully laughing the product in selected cities the company launches the new product in all other cities. Commercialization: The results of the test marketing help marketers to decide the changes that are needed in the marketing mix before entering into the market. It also helps the marketer to decide the amount of production distribution strategy, selling efforts and other issue like providing

guarantees, service after sales etc. the product enters the market during the commercialization stage. Example New product development and Nano A promise is a promise, said Ratan Tata, Chairman, Tata Motors, on 10th January, 2008, when the Nano was first displayed at the Auto Show in Delhi. The Nano project didnt grab the attention of only Indians; the entire world had their eyes glued to the worlds cheapest car. A truly Peoples Car, this time is from India. Though the dealer price is Rs. 1 lakh, the price on road, when it will be launched, will reach around Rs. 1,25,00 but it will be still more affordable and will be more eco-friendly than most other cars giving a mileage of around 23km/liters. The price of the car is such that a lot of rich and HNIs, if interested, can buy the car just by a single swipe of their credit cards. Providing a car worth rupees one lakh car was the dream of the chairman of Tata motors Mr. Ratan Tata. And with high qualified IT skills people he has shown the Indian talents to whole the world.

As seen before, A product can be considered new under the following situations: New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of existing products Repositioning Cost reductions As far as Nano is concerned, it falls into new to the world products in the context that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis.

It can also be considered as new product in the since of cost reduction as its the first time in the history that such a cheap car is produced. The story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of todayan eager, ambitious nation with a combination of engineering talent, a desire for low costs and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nanoon average aged between 25 and 30has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in an unexpected side-benefit called "organizational innovation".