Product strategy and product development

It is highly important that every firm has a new-product development process. Managers must decide what their core competencies are and develop programs to improve their products and services for customers while carefully considering outsourcing non-essentials. The key points from this chapter are as follows: A product is an offering of the firm that satisfies the needs of customers. It is a bundle of benefits, including brand name, design, country of origin, price, packaging, and services. The product lifecycle is the underlying reason for the necessity of a product development process, since products are usually replaced by newer technologies over a period of time. Managers must develop a product strategy that includes understanding how many products should be included in a line and how many product lines are necessary. Various products may be in different stages of the product lifecycle in specific countries. Managers must understand where each product stands along that curve in order to manage its marketing properly. New-product development times are shrinking, and global customers are looking for the latest technology throughout the world. A firm must work hard to excel on the determinant attributes, ones that customers use to make decisions about products or services to purchase. A good new-product development process will weed out the poor ideas, while allowing the successful ones through. A too-tight process will eliminate all new ideas, and a too-loose process will allow costly failures to come to market. Marketing plan development and product development must be simultaneous. The forming and managing of new-product teams across world markets is a challenging task that requires team leadership and cooperation. Country of origin can have a significant effect on a product’s success. A manager must develop an overall world strategy for their brands, seeking global brands only where economies may be realized. Packaging and labeling are especially important in international business because of shipping requirements and the need to recycle packaging. Quality plays a key role in business purchasing decisions. ISO 9000 is a basic requirement in many industries, and the Six Sigma approach is becoming critical to many buyers. Firms must decide whether to make or buy all the products and services they use or offer. Global outsourcing requires sophisticated analysis of all costs. Where vulnerability from outsourcing is low and tight control of particular suppliers is not important, outsourcing may be the best choice.