New Product: Various Stages of Development Definition of 'Product'
In the ordinary words, the term 'product' means such thing which has its easily-recognizable physical existence. The product has some physical and chemical characteristics.
In marketing, the concept of the term 'product' is quite wider. In the opinion of Philip Kotler; A 'product' is a cluster of related material services and indicating descriptions having the capacity of providing satisfaction and facilities to the purchaser.
From the above views, it becomes clear that a `product' is not merely the combination of some physical and chemical characteristics, but it is a - symbol of that pleasure, facility and comfort which a purchaser buys in the form of that product. The purchaser purchases any product only for the reason that it possesses the quality of satisfaction of his need.
In the opinion of William J. Stanton, Production is a combination of material and abstract characteristics, which includes the packaging, shade, price, goodwill of the seller and also the services provided by the seller which the consumer considers to be satisfying his needs.
Development of New Product
In this age of tough competition, it has become necessary that for the development of new things efforts be undertaken continuously. For this purpose, some organizations separately set up a Product-Planning Department. By the 'new product' is meant some new invention or such a thing which the company was not manufacturing earlier.
Stages of Development of New Product
The development of a new product might be divided into the following stages:
(1) Origin of a New Idea. The development of any new product commences with the origin of a new idea. The new ideas might come up from the side of the sales representatives of the company, the consumers, distributors or the high-level managers of the company.
(2) Evaluation of the Idea. After having got the new idea, it has to be evaluated. Many a times, the idea has to be dropped. The evaluation of the new idea is undertaken in the background of the market potential and possibilities, the availability of the raw materials, the provision of the raw materials, the company's resources, reasonable profit, condition of the plant and machinery, etc.
(3) Commercial Analysis. In the commercial analysis, the cost and the demand of the product has to be studied. For the study of the costs, the equilibrium point analysis is resorted to. The point of equilibrium has no level of profit or loss. In the demand analysis, the knowledge regarding this matter is acquired as to what shall be the probable demand of that commodity and whether the producer shall be able to sell the same up to the point of equilibrium.
(4) Product Engineering. In this stage, consideration is taken upon the actual product probabilities. In it are included the, kind of the new product, its grade or level, size, color and form, its standard size. We have also to trace out as to whether our produced product shall be liked by the customers, whether we would be able to make all the provisions for its production and whether our patents could be registered or not
(5) Test Marketing of the Product. Within this step, after producing the goods at somewhat lower stage, it is sent to the market on trial for the analysis of the equi-marginal utility and ascertaining as to what is the attitude of the consumers towards the product, what improvements will be required to be effected, which shall be the best medium for its distribution and what shall be the condition of the demand and competition of the commodity (product).
(6) Production of Products on Commercial Level. If the product has passed through the above mentioned five stages, the large-scale production of the same is started. This is the final stage of the product development.
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