NEW PRODUCT DEVELOPMENT

New Product Development



New Product Development

Introduction

In the recent years, speed - to - market and accelerated product development methods have come under scrutiny in pharmaceutical industry. Research agrees that accelerated product development may be crucial for pharmaceutical corporations to cut costs, provide first-to-market competitive advantages, and secure patent protection. However, when such method were not employed under moderation, the time pressures can cause the development team to unintentionally or intentionally overlook many hidden hazards which may lead to potential failures.

This is particularly true in regard to the risks of product development in the pharmaceutical industry, particularly the amount of costs involved with research and development, the high failure rate of products under the scrutiny of the FDA, as well as latter costs of litigation and withdraw when hazards were identified when the product had developed its position in the market. This paper examines product development processes for Pepsi.

Analysis

The Coca-Cola versus Pepsi competition is perhaps the most well known rivalry in the history of marketing. Coke has long enjoyed the home field advantage, having become entrenched as the most popular and identifiable cola throughout the world. Although it has carved itself a substantial portion of the market, Pepsi has struggled to match the sales revenue of Coca-Cola; until recently. Although Pepsi has never come close to equaling Coke cola market share, they have become more aggressive and adept than Coke in cornering the non-carbonated beverage market.

It is in this market that Pepsi is seeking to obtain a sustainable competitive advantage over Coke. It their quest to acquire and develop new products, will the use of the PTSTP method help Pepsi develop new products in order to obtain a sustainable competitive advantage?

Product

A product is defined in three levels; core, actual, and augmented. The core of the product is the benefit it offers the consumer. For the example of colas, it could be refreshment, energy (sugar and caffeine), alertness, or just pleasure. The soda itself is the actual product. The augmented product for a cola could be the recognition and status gains perceived by drinking that particular brand. Or it could even be the weight loss from sticking to diet colas (Natalie Zmuda, 2008,pp 1-41).

New Product Development (NPD)

Improving and updating product lines is crucial for the success for any organisation. Failure for an organisation to change could result in a decline in sales and with competitors racing ahead. The process of NPD is crucial within an organisation. Products go through the stages of their lifecycle and will eventually have to be replaced There are eight stages of new product development. These stages will be discussed briefly below:

Stage 1: Idea generation

New product ideas have to come from somewhere. But where do organisations get their ideas for NPD? Some sources include:

• Within the company i.e. employees

• Competitors.

• Customers

• Distributors, Supplies and others.

Stage 2: Idea Screening

This process involves shifting through the ideas generated above and selecting ones which are feasible and workable to ...