Product Development is the process of finding out the possibilities of producing a product. It includes the decisions as to – whether it would be feasible or not to produce the product and whether it would be profitable or not for the enterprise to do so. The term “Product Planning” has been defined by the following eminent authors.
- William J. Stanton: “Product development encompasses the technical activities of product research, engineering and design.”
- Lipson and Darling: “Product development involves the adding, dropping, and modification of item specifications in the product line for a given period, usually one year”.
Principles of Product Development
The following are the main principles of Product Development:
Principle of Standardization
This principle stresses on the fact that there must be pre-determined standards for the product. These standards may relate to the size, colour, form, packing, physical, and chemical attributes, etc. In India, Bureau of India Standards (BIS) has been established to determine the standards of various products.
Principle of Simplification
This principle stresses that production process of the enterprise must be as simple as possible. The types of products, the size of products, designs and form of products must be minimum in number. It makes the process of preparation and implementation of marketing programmes easy and reduces the costs of production, storage and distribution.
Principle of Specification
This principle stresses that the firm must try to achieve leadership and to be expert in a particular field. The purpose of the principle is to avoid unnecessary product diversification, which helps in increasing the efficiency of workers and results in economy in its costs and provides maximum satisfaction to consumers.
The co-ordinated application of above principles gives an ideal and lucrative form to the product-mix of the firm.
Advantages of Product Development
- Helps in producing the goods and services of best quality.
- Provides maximum possible satisfaction to the consumers by producing goods and services according to the needs and wants of the consumers.
- Helps in achieving stability in the demand.
- Increases the life-cycle period of the product.
- Helps in expanding the market area of the firm.
- Minimizes the possibilities of obsolescence of products.
- Helps in facing the competition successfully and effectively.
- Increase the goodwill of the enterprises.
- Increases profit earning possibilities of the enterprise.
- Increases customer loyalty towards the products of the firm.