Product Development (Niche Development)

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Successful marketing programs are built around two essential elements i.e. products and markets. The product is very important to marketers because it is the heart of an organization’s marketing mix as all other variables of the marketing mix are built on product. Without a good product that possess adequate want-satisfying capabilities; a fair pair, persuasive promotion campaign and an excellent distribution channel have no value.

What is a product?

Alderson (1957) defined a product as “a bundle of utilities consisting of various product features and accompanying services”. This product is provided by the seller who sells a particular combination of features and associated service. What this implies is that a product comes into play in an exchange and this is why it is sometimes referred to as what a seller has to sell and what a buyer has to buy.
Product development is the creation and adjustment of goods and services in order to satisfy consumer’s demand. It is in an adjustment in a company’s product mix in response to changes in buyers’ preferences. This is why the provision for satisfaction should be primary in any product development effort. Consumers pay their money to obtain satisfaction and not in specific technical features, hence any product to developed should aim at solving some problems either for industrial user or the ultimate consumer.
Product development is often used as a competitive tool to achieve organizational goal. A marketer, therefore, may introduce a new product, modify an existing product or eliminate another product according to the situation in the market. This further explains why new products are seen in the market everyday while some old products can no longer be found. Product development may take a long time to achieve because of the several un-successful attempts by many marketers to create a product. Basically there are three types of product development.
1.      Development of a completely new product.
2.      Improvement of existing product.
3.      Determination of new uses for existing product.

Development of a Complete New Product:

In order to develop a complete new product, a marketer ca adopt any of the following approaches:
a.      Embarking on fundamental research such as experiment carried out on various components, compositions and combinations of raw technology and training of new manpower specifically for the purpose of deriving a product that will perform new functions or create solutions to specific problems. This new product essentially must offer innovative benefits.
b.      Determining and identifying unmet needs and attempting to develop those products to satisfy such needs through goal directed research and development process.

Improvement of Existing Product:

This is the most physical approach to development. It means changing one characteristics of your product with the objective of satisfying the needs and wants of the customers better and preferably at a lower cost. Product improvement involves:
a.      Market research to obtain facts about customers’ consumption pattern of goods and to identify what goods meet their consumption expectations in terms of taste and preferences.
b.      The analysis of existing products to determine the strengths and weaknesses i.e. durability, rate of spoilage, ease of handling and adaptability to many uses.
c.       Adaptation of the products in line with the facts obtained after each of these process, the production department becomes involved in deciding what new materials would be required. What moulds for reshaping the existing product? What designs would be most appropriate as well as determine possible requirements of procuring new machine against the utilization of existing machines?

Determination Of New Uses And Applications:

This involves the finding of new uses for the existing products by identifying and promoting new uses, which have not been known of existing products. Some of such new uses might come out of adapting waste-materials to create new products from the existing products.


The new product development process is a seven-stage process; a successful new product will pass through each of these stages before it is finally launched in the market. As the product progresses from the first stage in the process it can be dropped if it is found not be feasible, this implies that it is not all product ideas that see the light of the day.

Idea Generation:
the new product development starts with the search for ideas. The idea is about something new, which will help the organization (you) achieve its objective. While some organizations get their product ideas by chance, others develop systematic approaches for generating new product ideas. New product ideas can come from many sources, which may be internal or External
The following people constitute the internal sources of idea i.e. marketing managers, researchers, sales personnel, engineers and other employees. On the other hand, for external sources of ideas, the customers, distributors, competitors, research centers or laboratories, educational institutions and members of the public are important.

Idea Searching Or Evaluation:
The first filter in the product development stage is the idea screening or evaluation. Many companies set up an idea screening committee while some others vest the screening of new ideas on the new product department or other formally appointed group. The task of the screening committee or other formally appointed is to evaluate new product ideas using two criteria.
a.      Promising ideas, which match the company’s objectives and resources. Such ideas with the greatest potentials move on to the next stage.
b.      Non-promising ideas that are inconsistent with the organization’s new product strategy. These are rejected and eliminated.

Concept Testing:
A successful product idea from the screening stage is developed into a concept. A product concept is an elaborated version of the idea expressed in meaningful consumer terms. To develop a product concept from a product idea, the following question s must be answered:
Who will use the product?
What primary benefit should the product provide?
Pro concept testing follows development and it is unusual to develop several concepts out of a  product idea. Concept testing involves the presentation of the product idea to a selected group of consumers to determine their initial reactions. This can be done by oral, symbolic or written description of the product ideas (sometimes with a few drawings). However, the more the tested concept resemble the final product or experience, the more dependable concept testing is.

Business Analysis:
The business analysis stage evaluates the business attractiveness of the proposal using sales, cost and profit projections and matching these to company’s objectives. The business analysis stage seeks for market information and it involves the followings:
a.      Profit analysis
b.      Evaluation of market demand
c.       Product features and requirements in terms of raw materials, personnel costs etc.
d.      Environment and competitive factors.

Product Developments And Testing:

This involves the research and development and/or engineering department, which translate the product from just an idea or a word description or a drawing into a technically and commercially viable project. The process involves the physical manifestation of the essence of these is to have a product that possesses enough characteristics that meet.
After development is usually expensive as a successful prototype take time (days, week or months) to materialize, while more than one physical version of the product concept may be developed. The essence of these is to have a product that possesses enough characteristics that meet.
After development, the product must pass through testing (carried out in the laboratory to determine), the product shell life, wear out rates, problems resulting from improper usage, maintenance schedules consumer testing can also be carried out by bringing out by consumers to the laboratory for product testing.
Market Testing:
After passing the laboratory test the next stage is to test the product in a real life setting to determine whether the market will accept it or not. In order to have a successful test, the firm (you) places on the product a brand name, packaging, and a marketing programme and attempts to determine geographic area chosen to represent the intended market and the result got, generalized for the entire market. Although the cost of conducting market tests is high. It is still preferable where the risk of product failure is high.
Modification Stage:
The results of market tests may reveal that certain changes need  to be carried out on the one or more attributes of the product or in the marketing mix before it is finally launched into the market. For example, the result of market test may suggest need to modify the distribution plans to include more retail outlets.

This is the stage where the product is finally launched into the market. The company (you)faces its greatest challenges in this stage in terms of cost, decision and risk. The company must make  commercialization decision on when (time to launch), where (geographic strategy),how (inductor market strategy) and to whom (target-market prospects). The decision to commercialise sets several tasks in motion which include:
a.      Ordering production materials and equipment
b.      Starting up production
c.       Building inventories
d.      Shipping the production to field production points
e.      Training the sales force
f.        Advertising to potential customers.

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