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1. Idea Generation
This is where all ideas concerning a product are generated. The ideas may be numerous, but, at any given time, an organization can only develop one idea at a time, given the scarcity of resources. Ideas generated could come from both existing and potential customers, competitors, scientists, sales representatives, top management, employees, distributors or suppliers among others.
2. Idea Screening
All the ideas from stage 1 are screened and evaluated realistically. The company’s aim is to identify ideas that are worth developing in terms of their feasibility given the resources available within the organization. The management, therefore, must determine the ideas that warrant further study.
3. Business Analysis/Feasibility Stage
Through forecasting the management reviews future sales, costs, profit estimates to determine how they comply with the company’s objectives. An idea that survives up to this stage is expanded into a concrete business proposal.
Management should;
i) Identify the production features for the product
ii) Estimate the market demand and the product’s profitability.
iii) Establish a program to develop the product.
iv) Assign responsibilities for further study for the product’s feasibility.
Several techniques can be used to determine whether they comply with the company’s objectives.
i) Break-even analysis.
ii) Pay-back period
iii) Rate of return on investment (ROI)
4. Product Development
Following the successful feasibility study, marketers must develop a full product concept. That is, ideas on paper converted into a physical product or developed into a concept that appeals to the customers. For example, pilot models or small quantities may be manufactured or samples of the product distributed to encourage trial ability of the consumers. A corresponding target market is used to test the concept. The management can then come up with other evaluations to determine the production feasibility of the product.
5. Test Marketing
Here, the idea is tested with the target market to see their behaviour and attitude towards the new product. Market tests and other commercial experiments are conducted to ascertain the feasibility of a fall-scale marketing program in limited geographic areas. At this stage, design and production variables may have to be adjusted as a result of test findings. The management must make a final decision regarding whether or not to launch and market the product commercially.
Titany answered the question on October 6, 2021 at 12:54
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