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.