PRODUCT DEVELOPMENT OBJECTIVES

 It is very important to clearly state the objective of the product-development effort in order to provide direction for product-development decisions. Generally, product-development programmes may be designed to implement the corporate marketing plan or to implement the marketing strategy for a given product or product line.

There are four basic types of product-development programmes, each of which is designed to fulfil specific objectives. These programmes include:

(i)    Product-line modification programmes

(ii)    Product-line extension programmes

(iii)    Complementary-product programmes

(iv)     Diversification programmes.

An organisation may employ any one or a combination of these programmes to achieve different product-development objectives.

PRODUCT-LINE MODIFICATION PROGRAMMES 

These programs are generally employed with the primary objective of enhancing sales of the present line.

They may be useful in implementing a customer-retention marketing strategy for the purposes of:

meeting changing buyer needs meeting new competitive offerings or improving satisfaction with the product.

This objective of enhancing sales of the present line can be achieved by: redesigning or reformulating the product to provide new benefits or to improve product quality; or by using multiple packaging in order to reduce competitors’

We may note that product modification programmes may enhance sales just by stimulating primary demand through increasing the rate of purchase. For instance, major design changes may result in a faster replacement rate for durable goods. In particular, modest packaging changes can lead to more rapid consumption of the product.

PRODUCT-LINE EXTENSION PROGRAMMES 

The primary objective of product-line extension programmes is to reach a new segment of a market. Basically, these programmes may be employed to:

acquire competitors’ customers in segments where a firm presently does not have an offering, or stimulate demand among current non-users of a product form.

In these two situations above, an entirely new product must be created with product features distinguishing it from the current offering.

COMPLEMENTARY-PRODUCT PROGRAMMES

Complementary product programmes seek to introduce products that can be generally used with existing products. The objectives of these programmes may be two-fold: either to enhance sales of existing products or to establish sales growth in related markets.

Complementary products have been found to enhance the sales of existing products. For example, a flash attachment to a camera will enable the customer to use the product in more situations, and will thus enhance the quality of the photographs taken. In another way, a complementary product may be introduced simply to take advantage of a company’s brand name, image, or sales force. For example, a tyre manufacturing firm may add the production of tubes as complementary products.

 DIVERSIFICATION PROGRAMMES

Diversification programmes are designed to establish a firm in new markets in order to achieve objectives such as new growth opportunities or sales stability. Generally, diversification is a policy of adding new products to serve new markets.