Creating a Niche Market for Your Product Range Abstract to Concrete Ideas: The process of new product development starts with the search for new ideas. Abstract ideas are molded in such a way to suit the market needs. Business persons who want to capture a major share of the market have to think out of the box, to tide over the competition. Small things can make a big difference. Monotonous pattern of thinking will not help you in the long run to survive and sustain in the market. The Significance of R&D: The objective is to obtain ideas for new products, new attributes for the existing products and new usage for the existing product line. Why do you think so much of investment goes into research and development? The fruits of such R and D activities are reflected in the form of improved sales turn over. Market updates on a daily basis also gives you an excellent feedback about the new products that throng the market. Think about this, it is not possible for every organization to invest such huge sums in R and D which demands technically qualified personnel to carry out the research activities and it is next to impossible that each and every firm in the market can establish the necessary infrastructure for the purpose of research. SWOT Analysis: What might be the solution? Companies generally rely on internal sources, customers, competitors, distributors, suppliers and others for new product ideas. The sales force of a firm can provide excellent inputs as they meet customers on a regular basis. Through SWOT analysis, a company can make a conscious, deliberate and systematic effort to identify opportunities that can be profitably exploited. Top management should encourage the employees to think more imaginatively to create a niche market for its product range. The management has to prioritise its objectives first and channelise the efforts of employees accordingly. Picture Courtesy : The power of Product Thinking Steps to be followed in new product development: Generation of new product ideas Screening of ideas – It serves the purpose of reducing the large number of ideas generated, to spot the good ones and drop the bad ones. Concept development and testing – An inherent idea must be developed into a product concept, should include the customer, the major customer benefits and the features defining it. Development of marketing strategy – This is helpful in launching the product at the right time and right place to the right people. Business analysis – A review of cost versus profit analysis, estimated size and growth rate of the market segment, estimated sales and market share for the new product in the light of financial feasibility. Development of the product – If the business analysis gives a satisfactory report as to the rate of return on investment and pay back period, the R and D department goes ahead with manufacturing the prototype which is the preliminary version of the final product. Test marketing – It provides an opportunity to understand market response to the new product and its proposed marketing programme in a more realistic market environment than in simulated conditions. Commercialization – The product is released into the market, distribution channels are established, thus initiating its life cycle. The success of new products can be attributed to two aspects, one is creativity and the other being...

What Do You Mean by New Product Development? In business and engineering, new product development (NPD) is the complete process of bringing a new product to market.   Innovate or Die: Product management should be viewed form a broader perspective by business firms, in that, it has to include new product development as part of the action plan, apart from appraising the existing product line, positioning them effectively and taking brand decisions wisely. “Innovate or die’, is the modern entrepreneurial slogan. Unless organizations innovate and introduce new products, they cannot survive in the competitive market. Strategies defining the organization’s future are built upon the portfolio of new products.     Picture Cortesy: Coschedule Need for new product development: People always welcome change and new product development is an opportunity for the firms to meet the changes in consumer demands.   They are a source of competitive advantage. Your new product may infuse a fresh lease of life to your sagging profits.   New products may turn out to be the star performers of your firm and provide long term financial return on your investment.   Some firms take the smart strategic choice of using the idle capacity of their plant for manufacture of a new product that may utilize the existing production and operation resources to an optimum level.   They capitalize on research and development. Products that create a wave are a result of research on market trend and consumer preference. Firms can make it, if their research is customer-centric rather than product-centric.   They provide opportunities for reinforcing or changing strategic direction. It is wiser to discontinue production of a product that does not find acceptance and divest the funds in a beneficial venture.   They leverage marketing and brand equity. Big corporate firms while introducing new products make a big publicity, so that it can attract potential investors and consumers.   They enhance the corporate image. You cannot expect a firm to make it big with a single product line or confined to one area of development. The growth of a company is evident only when it ventures into multifarious disciplines reflecting its capacity for expansion and diversification.     Picture Courtesy: Staenz Also if a company grows, the growth of the stake holders is rest assured as the company would be in a position to offer decent dividends with bonus. Even if a growing company ploughs back its profits for expansion, it is again a good thing for the investors as further expansion obviously means growing profits.   They affect human resources-a new product is perceived differently by different people. It is a need satisfying concept with benefit for buyers; a bundle of need satisfying features for marketers; a way to add value for intermediaries; an opportunity to design for R and D and a chance; to assemble and process for the production department.   They meet environmental threats-Until recent times, products were not subjected to environmental evaluation, but the recent crises regarding global warming and pollution has been an eye opener for all nations which are enforcing much rules and regulations, demanding for production aimed at environmentally safe products.   New product development is a multi-dimensional concept, inherent in most organizations. The process is initiated when the organizations are subject to market pressure and the firms are left with no choice other than to take up the challenge. A List of Productivity Terms Automation – The use of robots or other automatic equipment to do certain tasks Business Productivity – The amount of goods or services produced by a business from a set amount of resources Capital Goods – Manufactured or constructed items that are used...

The management of conversion or transformation process which accepts inputs and delivers usable goods and services is what is called “operations management.” The inputs may be in the form of, capital, material, labor, technology, information, machines etc. The process takes place in an effective and efficient manner through operations planning, design, management and control. Don’t forget to download the 3 page Project Planner Printable at the end of this post 👇🏻 Absolutely Free Earlier it was called, production or manufacturing management. Since operation is a general term in a productive environment whose output may be goods or services, the term operations management has become more appropriate. The Aim of a Good Operational Management Would be High level of productivityCompetitive cost and qualityTimely deliveryProducing goods as per the requirements of the consumer, that is customer oriented.Flexibility and responsiveness in the production of goods and services Production or operation in the three important sectors of an economy, namely, agriculture, industry and service, creates national wealth and serves as an index for the growth of that economy. One has to understand the link between operations management and other functional areas to appreciate its scope. The goals of the operations strategy has to necessarily be in tandem with the overall corporate strategy to accomplish the goals of a firm. Scope of Operations Management From marketing department, cues regarding customer preference and market segmentation in terms of product, price and volume are supplied to the production department, based on which the production planning is concluded. From Research and development comes the product design and process technology. Human resource is an integral part of production process and also a crucial input. Man power planning by the human resource department plays a major role in recruiting, selecting, training, evaluating and empowering labor force. Operations Strategy The great diversity in products and services available in the market should be taken into consideration before deciding on your operations strategy. At one end we have custom made products that are designed and manufactured to suit the specific needs of the consumers. For instance, custom made shoes, shirts, suits, furniture etc. Here the emphasis is on quality and delivery where the customer is not very much bothered about the price. At the other end manufacturers go for highly standardized products that are available “off the shelf.” Say, home appliances, detergents, soaps etc., here the product differentiation is very minimal and the focus is on competitive pricing as the material is available in plenty. Economy of Scale A customized product would require a manufacturing set up that can handle a wide variety of general products. The sequence of operations for each product would vary in the manufacturing system making a customized product. So, a process oriented manufacturing system is designed, where similar facilities doing similar operations are grouped together and departmentalized. Standardized products go for a product focused manufacturing system, to reduce the “through put” time as large volumes are required. To be cost effective, each product should have a dedicated line of production to take advantage of the “economy of scale.” Intermediate types of products also find their place in the market and they are produced in a production layout that has a mix of product and process orientation. Here a whole range of products and services are created for the benefit of the customers. In a long term basis, manufacturers should aim to develop new technology, environmentally viable products, increase R and D activity, update skills of work force and managers and focus on development of new products, process and innovations....

Capital Budgeting- Long Term Resource Planning What is Capital Budgeting? Capital Budgeting refers to the process of planning expenditures that give rise to revenues or returns over a number of years. The process of investment analysis is essential to have a sustainable advantage in the competitive market and to stabilize the profits through resourceful strategic business units. The firm’s management must be on the alert to explore the opportunities present in the market. Obsolete product lines and changes in consumer tastes may present additional problems to a business enterprise affecting the profitability and growth. When a firm decides to venture into projects that demand huge investments, the management has to scrutinize the economic feasibility of such projects. The process of capital investment is also crucial because the projects are for the most part irreversible. Say, for example, if a business firm purchases a special type of machinery, and after installation, if the firm reverses its decision to sell the merchandise due to some technical reasons, it will have only a very small second hand value. Business firms based on the cash flow of the project and the capital recovery period do long-term investment. Why do firms opt for capital budgeting. The reasons may be: To replace worn out equipments that will affect the production efficiency To replace obsolete equipments to install new and more efficient ones To expand production facilities in lieu of increasing demand for the firm’s products and to capture new markets To divest the surplus funds from other business units and to rotate the funds, as idle funds will not generate any revenue To develop new products Research and development Investments made to comply with government regulations, such as projects undertaken to meet government’s health and safety regulations, pollution control and to satisfy other legal requirements. People Involved The proposals for new projects come from the internal environment, such as department heads, executives, employees and of course the management. Experts in product development, marketing research, industrial engineering examine the investment proposals and they may regularly meet with the heads of other divisions in brainstorming sessions to zero in on the proposals. This free course from Udemy is Ideal for people interested in entrepreneurship, fintech, big data, startups, finance, private equity, VCs, & investing. https://www.udemy.com/crowdfund-investing-101-the-basics-of-equity-crowdfunding/ Departments Involved While the firm’s top management makes the final say or decision to undertake or not a major investment project, the process is likely to involve most of the firm’s divisions. Each department has to present its view on the feasibility and viability of the project. The marketing department- on the demand for the new or modified products that the firm plans to sell The production, engineering, personnel and purchasing departments- on the estimation and cost of the investment projects The financing department on- how the required investments funds have to be raised. Thus, the process of expenditure analysis can truly be said to integrate the operation of all the major divisions of the...