Product development

• Development

• Technical development in laboratory
• Production of prototype
• Carried out by research and development department

• Test marketing

• Test marketing of product
• Less expensive to make mistakes on smaller scale

• Launch and commercialisation

• Solve problems found during test marketing
• Decide on marketing package it will use to give the product launch the greatest chance of success

Constraints on new product development

• Availability of finance and resources

• Profit margins squeezed
• Financial & HR unable to develop new products

• Cost

• Cost of developing new products may be prohibitive
• Less time to recover development plans as products have increasingly shorter life spans

• Market constraints

• Little point in company developing new product unless consumers are prepared to purchase it at a price which can cover development and production costs

• Legal constraints

• Legalization must be taken into account