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NPD Case Study

Here are the answers to your questions: 1. a. Market share is the percentage of an industry or market's total sales that is earned by a particular company over a specified time period. b. Licensing is a legal agreement where the owner or developer of a product, technology, idea, or brand allows others to make or sell a product or use their brand name or technology in exchange for a fee or royalty. 2. Research and development is crucial in the process of new product development. It allows companies to identify customer needs and technological opportunities, develop new product concepts, test prototypes, and refine products before commercial launch. This helps ensure new products have features customers want and are viable in the market. 3

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Girish Jadhav
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206 views9 pages

NPD Case Study

Here are the answers to your questions: 1. a. Market share is the percentage of an industry or market's total sales that is earned by a particular company over a specified time period. b. Licensing is a legal agreement where the owner or developer of a product, technology, idea, or brand allows others to make or sell a product or use their brand name or technology in exchange for a fee or royalty. 2. Research and development is crucial in the process of new product development. It allows companies to identify customer needs and technological opportunities, develop new product concepts, test prototypes, and refine products before commercial launch. This helps ensure new products have features customers want and are viable in the market. 3

Uploaded by

Girish Jadhav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Case Study

on
New Product
Development
New product design and development
The term 'new product' refers to:

•A new and innovative product different to anything else


currently sold on the market

•A significant upgrade of an existing product containing new


features

•A product 'perceived' to be different by customers

Ultimately 'product' is the most important element of the


marketing mix. A firm can have exceptionally slick marketing
techniques or very low prices, but if customers do not want its
products, the firm will fail!

”Our plan is to lead the public with new products rather than
ask them what kind of products they want. The public does not
know what is possible, but we do.”

Akio Morita, co-founder of Sony Corporation


Product Design
• The power of design must not be underestimated.
• Design plays a crucial role in sales and to redesigns of products and/or
packaging which lead to increased sales and growth in market share.
• Customers does not just look for appearance or aesthetic appeal but also look
for functions, quality, reliability and performance;
• For Gucci, its USP is as a fashion icon, where beauty and aesthetic appeal
is paramount.
• A Mercedes car is certainly not focused on economic manufacturing, and
customers pay for its features and quality.
• Customers are willing to pay a high price for exclusivity and expensive
materials.
New product development process
New Product Development (NPD)

• Consider
the sector of your choice and follow the New Product
Development process to develop New Product.
• Explain the things you would consider at each stage of NPD.
Place the following products
and brands on a design mix
diagram.

• A Rolex watch

• A Ferrari sports car

• Kellogg's cornflakes

• A Dell computer

• A Smart Phone

• An XBox

• An iPad

• A Magnum ice cream


Case Study
The video recorder wars: The winning formula

• A battle took place in the mid 1970s between manufacturers of video cassettes
and their associated players. Although Philips was first to market with its Video
Cassette Recording system released in 1972, Sony, as with its Walkman concept,
was first to really attract the market with its Betamax video format released in
1975. It quickly gained market dominance until challenged by JVC's VHS. These
two formats were joined a year later by the Philips V2000; all of these system
being incompatible with each other. The Philips machine despite having several
superior features never really gained significant market share - not all of the
superior features were offered on the cheaper Philips models, which also suffered
from poor video quality and a lack of mechanical reliability. For all these reasons
the format never gained substantial market share and was withdrawn in 1985,
leaving the Sony and JVC to battle it out for video supremacy.

• Sony was confident that its superior performance and high market share would see
it defeat the new JVC upstart, but it made the cardinal marketing blunder of not
responding to the needs of its potential customers.
Continue…..

• Although consumers were impressed with Sony's marketing and the quality of its
players, they wanted something quite different. Sony initially restricted the
recording time of its player to one hour; suitable for television programmes, but
not for the recording of films which formed the basis of a growing video rental
market. Movie and video studios turned their backs on Sony and JVC were able to
offer by far the largest range of rental titles on its 'Long Play' system. In addition,
consumers wanted an affordable video player. JVC had made the decisive strategic
move of licensing its technology to a range of electronic manufacturers;
competition between which kept the price of VHS recorders well below that of
Sony's machines. Despite the perceived quality advantage of the Sony, demand
was price sensitive and by 1981, the market share held by Betamax tapes had
fallen to below 25%.

• In 1988, Sony began to market its own VHS machines and at that point it was
evident that the Betamax format was dead. In recent years, both Betamax and
VHS have been replaced by DVDs. The last Sony Betamax machine was
manufactured in 2002 and the last dedicated JVC VHS unit was produced in 2007.
Questions
Question 1
Define the following terms:
a. Market share
b. Licensing
Question 2
Explain the importance of research and development in the process of new
product development.
Question 3
Analyse the relationship between the product life cycle and the marketing mix.
Question 4
Research the format war between Sony and JVC and answer the following
question:
Using the example of the video recorder market discuss whether Sony could
have maintained the competitive advantage of its Betamax format over the rival
VHS system.

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