MGB105 Business Management | New Product Development Process

New product development is the process of introducing and bringing new product in the marketplace. The need to develop new products can be due to changes in the consumer preference, increased competition, and new technology. Innovation in business is crucial because of changing market needs. Numerous new ideas are identified which can fulfil the demand of the people. Hypothetically, for developing new product and launching it in the market nestle is choosing gym juice as a product. Development of new product requires identifying target audience (Thrassou, Vrontis, Chebbi, & Yahiaoui, 2012). Before launching any product, the organisation undertakes market research for identifying target audience. Another important research technique is brainstorming where creative thinkers from outside or inside the organisation helps in product development. Nestle must have analysed various marketing environment analysis such as SWOT and pestle analysis. When nestle launches its new product that is a gym juice, Nestle should communicate to chefs, employees who will assist in the production of new product. The content should be nutrients rich that can attract the most customers. The chefs may give sample of a unique gym juice consists of high protein, vitamins, and minerals (Anderson, 2008). 

Employee acceptance the proposal of a new product

An employee should have strong product argument that can support every new idea of a product. The employee should have good communication and presenting skills. The product idea must solve any problem of the consumers and have the ability to generate maximum revenue. The product launching should have relevant reason that can meet the demand of the people. The presentation in the meeting should define the target audience, and develop marketing campaign methods to reach the target audience. The employees can incorporate a set plan for a product presentation (Saeidi, Sofian, Saeidi, Saeidi, & Saaeidi, 2015). Moreover, the managers seek how product launching will benefit them and the company. Preparing to introduce and launch new product, it is crucial undertaking for any business. The company has to invest considerably huge time, money, and resources to develop a new product. A strong internal communication is important for new product launch. Communicating the product to company employees make them responsible to help the workers to increase productivity. The presentation can have two sessions-

• First session can outline the market research that inspires new branding strategy (Rothaermel, 2015). Market research gives critical information and direction. It focuses on market needs and demands, pricing, distribution channels, and motivate to buy. Researchers are critical to all decisions. The employees present the current market share of each product they manufacture. The employee convinces how the market share of the company will be wider by launching new product. After collecting the market data, the company identifies nature of different audiences. Therefore, the company can strategize marketing campaigns accordingly.
  
  
• The second session can outline key elements of business strategy. The launching procedure of the product should assist to accomplish mission and vision strategy of the organisation. This session includes discussion about new product development process. Test the new product in the market (Grant, 2016). However, the distributor and sales organisations can be comfortable selling it. Finally, the organisation need to promote the product through advertising, promotional literature, samples, website, seminars, and technical literature. Time, research, and planning assist in increasing the possibility of success.

Youth is very much fond of gym activities. Youth is advised to take proper diet by their trainers when exercising. Nevertheless, no single fruit juice contains all the appropriate contents, which are advised to take during workouts. Therefore, nestle kept identifying the market needs and finally had an idea to launch the gym juice. The idea generated by the employee is responsible for idea screening. Employee must have explored various product ideas. However, employee found to bring the gym juice as a product.

• Creating brand ambassador- Certain managers who plays important role in corporate communications can represent the new product as a brand ambassador because the manager have good image on the part of company. These managers can play a role of brand ambassador because of their diversified personality traits such as positivity and, enthusiastic supporter.
  
  
• Produce sales staff- Before launching the product in the market, the company has to identify its marketing strategies through which the company can promote its product across the target audience. The company can offer free samples to the target market. Their positive feedback will add to product ability to penetrate the market.
  
  
• Marketing and promotion of new gym juice will be critical. The need for promoting the product is attractive packaging. The company have to opt the marketing strategies in accordance with the specified customers. The company can use various modes of marketing such as television, F.M. channel, newspaper, and radio. The pricing strategy plays an important role in launching new product. The higher prices of the gym juice may imply a negativity among the consumers for the juice not to buy it. The company should introduce its product at low price with best quality. So that, low price can attract maximum audience. To promote the product internally, the people in the management discuss the objective of the launch. The company focuses on the strategies to position their product at the marketplace. The aim of launching a new product is to solve the prevailing problem of the customers through supplying the particular product. Discussing the great idea of the product and encourage open discussion involving all the level of managers. These product strategy meetings are positive and futuristic conversations.

New product affecting the company environment

The introduction of new product in the internal environment affects the working of the organisation. The focus of the managers adjusts to all product being manufactured. Manufacturing new product can either create complexities in the organisation structure or allow the organisation to ripen the organisation. If there is proper division of labour, it is possible that each team of labour may efficiently contribute to the organisation`s growth. There are various effects on the organisation due to new product development-

Value of employees- The strength of employees is an important internal factor. Check whether workers are excited to work on new product or they are of afraid that their work can create loss (Nuryakin, Aryanto, & Setiawan, 2018). Check whether employees are motivated or not. If not, workers will produce better results. For new product, employee and department collaborate on ideas. Company starts operating new current processes for new products. Before the processes, the company has to recognise that how far are the processes ethical. Strength has favourable effect on the business working whereas weaknesses can have harmful effect on the product (Wagner, & Hollenbeck, 2014).

Company culture- By exploiting the additional internal resources and meeting the demanding global competition, company creates value for its product. These resources should create a unique product, which has unique advantages and core competencies. Core competencies are capabilities that create firm`s competitive advantages over rivals. Core competencies in new product distinguishes it from the competitor`s product. Core competencies do not develop over time. Various organisational processes are applied to deploy different resources and capabilities. 

The driving force behind new product development is change and uncertainty. One problems that organisation faces is how to cope up with the uncertainties and risk evolving from globalisation, internationalisation, short life cycle of the product, brand and increasing pressure to innovate. New product development is the best way to manage demand for the certainty that is caused by innovation, market, seasonality, supply chain management, and market situations (Zsidisin, Hartley, Bernardes, & Saunders, 2015). These uncertainties indicate demand the need to be flexible towards the expectations of consumers for reducing the delivery lead-time and increasing number of introduction of new product. The importance of new product development has limited to product development process, labour skills, job design, available technology, and material management. Coordination between these activities is crucial and critical for developing products. To overcome the coordination problem, the three main variables has to remain flexible. The variables are- technology, competences, and development process. For greater success, the key contributors to success of new product are commitment from senior management, clear division of team to delegate authority to improve new development strategy and good communication within the internal stakeholders and across the external stakeholders. 

Threat of Competitors

Rivalries among industry players can affect industrial profits because of increased innovation, increased marketing through advertising, increased product improvements. A company, who continues operation since last few years will enjoy competitive advantage over new entrants. Therefore, existing firm enjoys customer trust. A monopoly industry earns the most profit (Palandeng, Kindangen, Timbel, & Massie, 2018). However, when there is large number of firms operating in the same industry. Competition level among the industries is at the peak because of availability of large number of product resource providers. In addition to existing competition, price competition is more likely create complexities because products and services can be identical, which encourages price competition to acquire market share. Especially in fast moving consumer goods, industry where fixed cost is high in beginning and marginal cost is low (Valuation academy, 2018). This forces competitors to cut the prices below average costs to regain some of fixed costs. The new product named gym juice proposed by Nestle Company has many competitors. The various competitors for gym juice to Nestle are-

• Blueprint- Blueprint is the bestseller of green juice. It provides six pounds of green leafy in every bottle (Brue, 2013). In every bottle, the staple found at wholesome food consists of kale, spinach, celery, parsley, lemon, apple, romaine, and ginger. It also provides three more flavours other than green juice. It also provides cleaner drinks that assist in proper cleansing of digestive system. The most popular renovation cleansing drinks are winning the existing market (BluePrint, 2018).
  
  
• Pressed juicery- The pressed juicery was started in California, U.S. It provides best quality cleansers, which assists in, weight loss, and proper digestion. Antioxidants help to neutralise free radicals in the body that helps to fight diseases and reduce the risk of cancer. It provides a three-day cleanser, which has positive reviews and cleaner increases Cyanobacteria and Bacteroidetes after the intake of cleanser. The product named Greens 3 is a top seller, which contains kale, romaine, parsley, cucumber, apple, lemon, ginger, and spinach.
  
  
• Liquiteria- The liquiteria was the first organisation who introduced cold pressed juice in New York City that helps in serving health balances to the customers. The cold pressed juice has vitamins, minerals, and nutrition rich contents. The liquiteria menu offers a wide range of cold pressed juice, super food smoothies, herbal supplements, cleansing options to give not only the energetic live but thrive it. Liquiteria provides a mixture of super foods and herbal blends to enhance the health. Fat burners accelerate the fat burning process, which decreases sugar cravings (Liquiteria, 2018).
  
  
• Juice Press- Juice Press was founded in 2010. The mission of its existence is to create the wellness brand on the planet. The vision is to bring healthier and transparent lives. In last 7 years of its existence, it has inaugurated more than 70 retail stores. The company ensures that transparency, community, and integrity define Juice press. The company has delicious line-up smoothies. The company claims that their selection cannot be compared to any other organisation. Therefore, they provide such a high quality product to customers. The immune boosters are ginger firewall coconut water, ginger firewall and rehab shot, ginger turmeric tonic and volcano. The content in these immunity boosters have low calories (Juicepress, 2018).

Nestle will face high competition from the existing manufacturer. Nestle has to build new strategies so that the new product can have unique advantages. New product should have competitive advantages over others to win the market share. Companies can make strategic moves to acquire competitive advantages (Cusumano, Kahl, & Suarez, 2015). A strategy of leadership in various factors such as quality, innovation, and cost helps to develop competitive advantage in a new product (Adams, Jeanrenaud, Bessant, Denyer, & Overy, 2016). Any new product can acquire competitive advantage by various strategies-

Cost leadership- As nestle has been one of the largest company in food and beverage sector since 1866. Reported, Swiss food giant posted 7.2 billion net income of nestle. The Swiss food giant also reveals that nestle is growing by 2 to 4% in 2018 (Turak, & Bercetche, 2018). The data clearly represents that nestle has covered its fixed cost, attained break-even point and earns a fat profit. Nestle, by becoming an effective cost producer, the company can offer a price to customers that the competitors cannot match. A company can make number of strategic moves to cut costs, that includes either investing in productive technology and equipment or outsource manufacturing to low cost producer.

Innovation- Innovation, as a strategy gives organisation competitive advantages by developing new products with a different feature, which distinguishes it from its competitors. Focus on the product features that can offer exceptional value and unique benefit to customers (Han, Kwon, Chung, & Son, 2017). Nestle can add more beneficial supplements such as drinks that meet specific deficiency in human body. A person who suffers from the deficiency of basic carbohydrate, vitamin C, or sugary fat can be a target for the company. Nestle can ensure to provide fresh packed juice without adding preservatives (Herrera, 2015).

Customer Experience- Exceptional services provided to the customers add to the sustainable unique form of competitive advantages. To achieve customer loyalty and trust, sales channels must provide high level of information and marketing material, which uses customer information to target certain audience (Cui, & Wu, 2016).

Partnership- A partnership strategy can help to improve the competitive advantage by working with the partners, which may bring new ideas. Integrating operations with partner in the supply chain management can enable to innovate operations. Sometimes, Partnership agreement comes in existence due to lack of resources available. However, Nestle have enough capital to add a new product in its offerings. However, to acquire new features in the product, the company can shake hands to incorporate unique feature in the product.

Knowledge- The research undertook by the company to identify the target audience could build a strong competitive advantage by capturing and sharing the knowledge of experts for the product (Sørensen, & Jensen, 2015). There are various technology which are operated by the experts that help the organisation to reduce the overall cost. The researchers also segments the markets according to its types such as demographic segmentation, geographic segmentation, distribution and price segmentation which assists the organisation to serve the niche market.

Conclusion

In today`s era, new product is recognised as the life blood of any organisation because grabbing new opportunities emerges to give maximum profit. A firm with a successful new product ripens larger profits which shapes the company`s future. Developing and managing products is critical to organisation growth. The development of new product focuses on the target audience. The process of new product development consists of generating idea, screening the ideas, expanding the ideas to business analysis, market testing, and commercialisation. The research process helps to ascertain the problems involved in the cost of developing a new product. Launching activity of new product invites competition of existing firms. The above study clearly elaborates that competitors who are already enjoying popular standing in the market are the existing organisation. However, the company should create competitive advantage in the new product. Competitive advantages such as cost leadership, innovation, partnership, knowledge and consumer experiences. New product manipulates the operation of the organisation. The introduction of new product can either contribute to great earning or create chaos among the employees. Before the introduction of new product, organisation should divide the labour into different teams. Each team should be responsible to particular product manufacturing.

References

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