POM

2. PRODUCT DEVELOPMENT
In Business ,
new product
development (NPD)
is the complete process of
bringing a new product to
market

3. PRODUCT DEVELOPMENT
Product development
means making changes in
the size, design, color,
shape, characteristics,
packing etc. of the product.

4. It may include addition of a new product line,
addition of a new product item in a particular
product line,
elimination of existing product or product line &
changes in the size, color, design, packing,
characteristics,
and prices of the product & discontinuation of
the unprofitable item or product line.
PRODUCT DEVELOPMENT

5. NPD Process Structure
The development process is basically comprised of
three main phases:
Fuzzy front-end (FFE) is the set of activities
employed before the formal and well defined NPD or
stage-gate process.
Product design starts with the development of the
new product and it ends at pre-commercialization
analysis stage.
Fuzzy back-end or commercialization phase
represent the action steps where the production and
market launch occur.

6. REASONS FOR NEW PRODUCTS
There are at least 3 reasons for which new
products should be developed.
 1st
, new products become necessary for meeting
the changes in consumer needs.
 2nd
, new products become necessary for making
new profits.
 3rd
, new products become necessary for combating
environmental threats.

8. CATEGORIES OF NEW PRODUCTS
BOOZ, ALLEN & HARMILTON have identified 6
categories of new products, such as:
1: New to the world.
2: New to the product lines.
3: Additions to the existing product line.
4: Improvements & revisions of existing products.
5: Repositioning.
6: Cost reductions.

9. FACTORS OF NEW PRODUCT DEVELOPMENT:
Adequate market demand.
The product should fit into company’s present
market structure.
The idea should fit into the company’s present
production structure.
The product should fit as per the financial
resources available.
Adequate distribution in depth & breadth.

10. NEW PRODUCT DEVELOPMENT PROCESS

11. NEW PRODUCT DEVELOPMENT PROCESS
Idea Generation
Idea Screening
Concept Development and Testing
Business Analysis
Prototyping & Market testing
Technological Implementation
Commercialization

13. Kentucky Fried Chicken

14. Kentucky Fried ChickenKentucky Fried Chicken
Mission Statement.
“To sell food in a fast, friendly
environment that appeals to pride
conscious, health minded consumers”

15. “No body’s cooking like KFC today and
we are the chicken experts”
“There is no competitor for spicy
chicken which is made by KFC”
KFC specialized in chicken and
they say :-

16. Introducing New Product
KFC BROWNIES

17. PRICING POLICY FOR
PRODUCT OF BROWNIES
Manufacturing Cost = Rs. 75
5% Marketing Cost =Rs. 4
Total Cost = Rs. 79
16% G.S.T +15% RETAIL MARGIN = Rs. 20
Total retail Price = Rs. 99

18. INTRODUCING chocolate BROWNIES
 Right now there is no dessert in KFC’s menu. Therefore we plan to
introduce Chocolate Brownies for chocolate lovers. We expect to catch
the interest of a regular loyal customer base with its vast selection of
brownies, including not-so-traditional flavors.
 We will focus on…
 · Providing the highest quality product.
 · Competitive pricing.
 · New ideas and flavors.
 · Local markets, with a special focus on coffee shop and bakery
customers.
 We will sell chocolate brownies coupled with exceptional customer
service in a warm atmosphere. Customers can dine-in and enjoy a
warm or cold beverage to complement their brownie. Toppings will also
be available when customers dine in for children, as well as the young
at heart. We will also offer carry-out so customers can enjoy the treats
at their own convenience.

19. Target Market Segment Strategy
We have specifically targeted segments of people
with an appreciation for delicious desserts and a
need for comfort and relaxation. KFC is a haven for
the busy & successful who want to treat themselves
to something soothing and a little sinful! It doesn't
take a lot of time, yet is so rewarding.
These people will value the high quality product
presented. Our customers will also appreciate the
fun and fast service - whether celebrating a birthday
or stopping in for a break between shopping.

20. Competition and Buying Patterns
 Although we are opening up a new product, there is no doubt that we
are competing with a variety of similar businesses. We need to compete
against the ideas that dessert is something that only follows a special
dinner and needn't be any better than a frozen cake. We want every day
to be a reason to celebrate. And being able to have a vast array of
options for your favorite chocolaty treat is an idea that appeals to
everyone.
 The comfort factor plays an important role in consumer decisions about
sweets. Both the atmosphere and staff of KFC excels at warm &
friendly. At the same time, the menu will reflect familiar favorites such
as chocolate chunk or turtles, while there will be flavors for the more
adventurous as well, such as pistachio brownies. We will use the
highest quality product; sometimes paring the ordinary with the exotic,
but we will always present our brownies in a stylish and ethically
pleasing, but still unintimidating manner.

21. Marketing Strategy
 Our marketing strategy will be education of the consumer and
subsequent word of mouth. Customers will be reached through
neighborhood advertising, special promotions, and most importantly,
word of mouth.
 Location also plays a crucial role in marketing and promotion. KFC is
located in high-traffic retail area. This area offers many incentives to
business operating there because of the high-end reputation and
affluent residents nearby. Also, the area is popular amongst tourists
who come to see Multan’s cantonment area, cantonment garden and
lake which is not so far, which will be most beneficial.
 We will target progressive and generally well-educated and affluent
consumers who are interested in high quality brownies experience and
are dissatisfied with the limited selection and lack of personal service
found in grocery store bakeries and neighborhood cafes and coffee
shops.

22. Promotion
Promotion is the method used to inform and educate the chosen
target audience about the organization and its products. Using
all the resources of promotion:
Advertising
Sales Promotion
Public Relations
Events and Experiences
Coupons, Discounts and Bundled packages
An organization finds most of its meanings and survival
through promotion.
At KFC, Promotion is the main tool to bring all chicken lovers
attention towards its delicious one-of-a-kind product, the Fried
Chicken.