Unit 22 Product and Service Development

Introduction

This unit explores the journey from ideas generation through to the launch of a new product or service. It examines the processes behind new product development (NPD) and it also considers the potential risks involved. Through the combination of theory and practice students will develop knowledge and understanding and be able to apply that knowledge within either an organisational or entrepreneurial context.Almost every day we encounter new products and services through a variety of marketing promotions. But how do they get from a single idea to, in some cases, becoming a household item and brand? How did, for instance, the mobile phone, e-books, 24/7 banking services and fast food become part of our lives? Moreover, why do some products enjoy a long and profitable life span, whilst others disappear almost overnight? What are the secrets to success?

Learning outcomes

LO1 Explain and demonstrate processes involved in new product or service development

The product/service concept:

• Definition and meaning of both product and service concept, including tangible and intangible attributes.
• The level of customer integration in product/service development and marketing.
• The product–service system to support sustainable performance.

New product/service development:

• Ideas generation, ideas screening/selection, creative methods, concept testing (marketing research) and business analysis.
• Risks associated with new product/service development: competitor activity, customer behaviour, macro factorial and internal technical changes, levels of investment and change of strategic aims.

Minimising the risk of new product failure:

• compatibility, trialability, observability and complexity.

Minimising the risks in service management:

•  intangibility, perishability, inseparability and variability.
• The use of digital technology in researching, designing, testing and development of new products and services.
• Software systems for New Product Development (NPD).

LO2 Assess the life-cycle stage of the products or services in a company’s portfolio and evaluate whether innovation, adaptation or renovation are needed for the individual products or services

Products and services:

• Five product levels
• Core benefits, basic product, expected product, augmented product and potential product.
• Market classifications of products and services within both B2C and B2B contexts.

Product life-cycle and services:

• Different forms and operation of a product life-cycle.

Product life-cycle management:

• repositioning and revitalising the product.

Product line and service management choices:

• Standardisation vs adaptation.
• Macro factors and their influence/impact upon the development of new/adapted products and services.
• Trends and the role of innovation.

LO3 Design and pitch a new/renovated product or service

• New product development or service innovation:
• Market testing.
• Product launch (linking to marketing communications) and distribution.
• Guidance on designing and pitching new/adapted products/services.
• New or improved service launch, marketing communications and generating consumer interest.

LO4 Demonstrate an ability to critically reflect on the skills of team working, creative development and presentation

Cognitive skill development:

• Theories of and approaches to reflective learning and development.
• Team working skill development.
• Creative product/service development and entrepreneurship.

Resources

• COOPER, R.G. (2011) Winning at New Products: Creating Value through Innovation. 4th Ed. New York: Basic Books.