New Product Development and Innovation 1 Culture at Dubai Internet City (DIC) Essay
New Product Development and Innovation 1 Culture at Dubai Internet City (DIC)
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New product development is very important for an organization whatever be it is - New Product Development and Innovation 1 Culture at Dubai Internet City (DIC) Essay introduction. So this assignment evaluates how Dubai Internet City should create an effective new product for itself. The new product development idea should be more systematic than from haphazard or straight. The innovative culture of the company has also been discussed. There are also suggestions for the organizations.
As the consumer’s demands are changing firms are now creating their products according to the buyers. New product development is the development of the original product, product improvement and modification and new brand via the firm’s own research and development efforts 2. A firm can get new products in 2 ways. One is acquisition and the other is new product development. But one thing has to keep in mind that new product development may be risky also. New ideas are continuing to fail at a high rate. But one company should consider that why new products fail. There are several reasons for the failure. For Dubai Internet City new product development is vital. Many famous organizations are opening their branches in Dubai Internet City.
There was no problem in the idea generation in the organization. The organizations employees generated the idea very efficiently about launching a new product. But the problems occurred when applying test marketing and commercialization. NPD Process compare with best practice by providing the following functions such as plan a project portfolio, pipeline management 3 with resource planning and analysis of it, templates for delivering documents, provide process flexibility and it also allows selection of product development process 4. Phase gate process with tracking phases is also important. My company can learn from this that it should not ignore the importance of experiment marketing and commercialization. Suggestion for managing product development project in future is discussed below.
There are some steps in the new product development. Such as
It means the search for the new ideas that the company can introduce in the market. Dubai Internet City can take new ideas for increasing its capacity. But for many ideas one or two will come up at the end. There are many internal and external sources for idea generation. Internal idea sources are research and development and its executives, scientists, engineers and manufacturing staff. It should develop successful “entrepreneurial” programs that may intrigue employees to think up and develop new product ideas. It 5 can give more convenient services to its customers. The external ideas sources are mainly are the customers. Customers often creates new product and they use it. Company should look into the customer’s mind that will help to understand what new product should be made. Competitors are also good resource of ideas. Dubai Internet City can look up the competitor’s ads and take decision of the new product. Competitors product can be bought or used and analyze how do they work and their sales can also be scrutinized. Distributors and suppliers can also contribute in the new product development. Reseller can inform about the consumers demand and suppliers can also tell companies about the new ideas, concepts, and techniques and materials.
To detect good ideas and remove the bad ones, idea screening is used. The reason for idea generation is to make large number of ideas. As the product development can be very costly, companies are interested in idea screening from the very beginning. Dubai Internet City can require their executives to write up new product ideas on a standard form where that can be reviewed by the new product development committee. The write up should describe the product, the target markets and the competition 6. It makes rough estimate of the market size, production price, development time and cost, manufacturing costs, and the rate of return. The committee can evaluate the idea against a set of general criteria.
Concept development and testing:
To state the idea in the meaningful consumer term, Concept development and testing is used. Dubai Internet City can distinguish among a product idea, product concept and product image. A product idea is an idea for the product that the company can see it in the market. A product concept is a detailed version of the idea stated in meaningful consumer terms. And product image refers to the way buyers see or understand an actual or potential product. Through concept development the Dubai Internet City can make concepts, which is part of new product development, and then it can test its concept. Concept testing means testing the product in the group of target customers to find out that whether the consumers have a strong request for the product or not. As the customers of Dubai Internet City are Microsoft, Intel, and Oracle Corporation and Sun Microsystems and many more, it can test its customers. The service or product may be presented in front of the consumers by physically or symbolically.
Marketing strategy development:
It is important for new product development and it involves 3 steps. The 1st part is target market and the planned product positioning and the sales, market shares, and the profit goals for the first few years. Here the target market is the company in the city. The second step involves outlines of the product-planned price; distribution and marketing budget for the 1st year. The 3rd part consists of long run sales; profit goals 7 and the marketing mix strategy.
It is review of the sales, costs and the profit projections for a new product to understand whether the factors can satisfy the company’s objectives or not. To estimate these factors the company can look up the similar products sales and costs.
It means developing the product concept into a workable project where investment is involved.
It is the stage of new product development in which the product and the marketing program are tested in more realistic market settings. If the product passes functional and consumer tests then the next step is test marketing. It is the stage at which the product and the marketing programs are introduced in the more realistic market setting. Test marketing gives the marketer experience with marketing the product before going to the great expense of full preamble. It lets the company test the product and its entire marketing program. The amount of test marketing needed varies with each new product. Test marketing cost may be high 8. And it takes time that may allow competitors to gain advantage. When the costs of developing and introducing the product are low or when the management is already confident about the new product the company may do little or no test marketing. In fact test marketing by consumer package goods firms has been declining in recent years. Companies often do not test market simple line extensions or copies of successful competitor products. Although test-marketing costs can be high they are often small when compared with the costs of making a major mistake. There are three kinds of test marketing. The 1st one is standard test marketing. It involves using markets widely. Using standard test markets the company finds a small number of representatives test cities, conducts a full marketing campaign in these cities and uses store audits, consumer and distributor surveys and other measures to gauge product performance 9. The results are used to forecast national sales and profits discover potential product problems and tuning. But it also has some problems. They can be very costly and they may take long time to judge the marketing criteria’s. And competitors may monitor test market results and or even interfere with them by cutting their prices in the test cities, increasing their promotions or even buying up the product being tested. Finally test markets give competitors a look at the company’s new product well before it is introduced nationally. Thus competitors may have time to develop defensive strategies and may even beat the company’s product in the market. Despite these disadvantages, standard test markets are still the most widely used approach for major in market testing. However many companies today are shifting toward quicker and cheaper controlled and simulated test marketing methods. Next type of test market is controlled test market. Several research firms keep controlled panels of stores that have agreed to carry new products for a fee. In this test marketing detailed scanner information on each consumer’s purchases is fed into a central computer, where it is combined with the consumers demographic and TV viewing information and reported daily 10. Thus behaviour scan can provide store-by-store, week-by-week reports on the sales of tested products. Such panel purchasing data enables in depth diagnostics not possible with retail point of sale of data alone 11. Including repeat purchase analysis buyer demographics and earlier, more accurate sales forecasts after just 12 to 24 weeks in market. Most importantly the system allows companies to appraise their specific marketing efforts. Controlled test markets such as behavior scan, usually cost less than standard test markets. Also because retail distribution is forced in the first week of the test, controlled test markets can be completed much more quickly than standard test markets. As in standard test markets, controlled test markets allow competitors to get a look at the companies’ new product. And some companies are concerned that the limited number of controlled test markets used by the research services may not be delegate of their products markets or target consumers. However, the research firms are experienced in projecting test market results to broader markets and can usually account for biases in the test markets used. Next one is simulated test marketing. Companies can also test new products in simulated test marketing. The company or research firm shows ads and promotions for a variety of products including the new product being tested to a sample of consumers. It gives consumers a small amount of money and invites them to a real or laboratory store where they may keep the money or use it to buy items. The researchers note how many consumers buy the new product and competing brands. This simulation provides a measure of trial and the commercials effectiveness against competing commercials 12. The researchers then ask consumers 13 the reasons for their purchase or non-purchase. Some time later they ask the consumers by phone or other media to determine product attitudes, usage, satisfaction, and repurchase intentions.
Using high standard computer models the researchers then project national sales from results of the simulated test market. Dubai Internet City can also apply this method. This firm can begin to use interesting new high tech approaches to simulated test market research such as effective reality and the Internet. Simulated test markets overcome some of the disadvantages of standard and controlled test markets. They usually cost much less can be run in eight weeks and keep the new product out of competitors view. Yet because of their small samples and simulated shopping environments many organizations do not think it as an accurate or reliable or dependable as larger, real world test. Still it is used extensively often as pretest markets. Because they are cheap and fast they can be run or test quickly assess a new product or its marketing program. If the pretest results are strongly positive, then the product might be introduced without further testing. If the results are very poor, the product might be dropped or substantially redesigned and retested. If the results are good but indefinite, the product and marketing programs can be tested further in controlled 14.
At the end the company may introduce the product in the market, which is known as commercialization. Test marketing gives the management the information needed to make a final decision about whether to launch the new product or not. If the company goes ahead with commercialization it will face high costs. The company must build or rent a manufacturing facility 15. And it might need to spend millions of dollars. The company must keep in mind the timing of the product. If one product eats the market share of other products of the same company then it is the result of the dreadful timing.
The Innovation Culture:
Culture is the set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important establishments. And innovation culture of an organization refers to the development in the organizations by innovation. And an organizations cultural environment refers to institutions and other forces that affect societies basic values, perceptions, preferences and behaviour. Dubai Internet City has always been innovative. Through its innovative ideas and plans and implementation of the plans it has been able to attract the most famous organizations of the world. Many famous organizations have a branch here.
Suggestion For Improvement:
Dubai Internet City can improve its service by introducing new technologies for mobile phone and new software like VOS 16 to increase its potentiality. It may also introduce new gadgets or widgets to improve its service.
An entrepreneurial new product may be share each companies shareable things over Internet and mobile phones. A technology may be introduced to browse the documents of a computer by a mobile phone. Many countries have high-speed Internet speed. And by following these countries technology Dubai Internet City can bring high speed Internet. Internet can be highly efficient to conveying the performance in a company. Many new products are coming every week, which can be used to increase its potential power to be the market leader.
As Dubai Internet City has no shortage of share capital the company can introduce this technology to boost its performance. And it should increase its position in the market.
Dubai Internet City has already got a valuable position in the mind of its consumers. And it is looking forward to increase its performance 17. By introducing precise new product it can not only keep its 18 position but also become one of the most successful organizations.
Kotler, Philip. (02 March 2003) Principal of Marketing. New Delhi: Prentice Hall of India.
Philip Kotler and Gary Armstrong, (2004). Principles of Marketing. New Delhi: Pearson Education, 10th edition, chapter 10, page 313-327.
1 Innovation through of Strategic Community Management
2 Meaning of new product
4 Mission Statement
5 Dubai Internet City
6 To develop its own market
7 Long term goals
8 Weakness as a part of SWOT
11 Important for decision making
12 Principles of change management
13 Survey about the new product
14 Or standard test markets
15 As a strategy
16 Vista operating system
17 To increase its profit