9 Stages of Product Development

NEW PRODUCT LAUNCHSTAGES OF PRODUCT DEVELOPMENT

(grand-finale)Under guidance of Prof. V V Ramasastry

ANAND TUTEJA 1B-40NANDITA KATIYAR 1B-54 ARUN PUNDIR 1B-43GAURAV ROHATGI 1B-41SHRAVAN RASTOGI 1B-59RASWINDER JIT SINGH 1B-31RUPAL NIMBHORKAR 1B-33

http://sims.edu/default.aspx

1. CLASSIFICATION OF HEALTHCARE INDUSTRY

2. OVERVIEW

3. FACTS ABOUT OUR COMPANY

4. CLASSIFICATION OF TIME MEASURING

INSTRUMENTS

5. IDEA GENERATION

6. IDEA SCREENING

7. CONCEPT DEVELOPMENT & TESTING

8. MARKETING STATEGY

9. FINANCIAL ANALYSIS

10. PROTOTYPE DEVELOPMENT & TESTING

11. TEST MARKETING

12. COMMERCIALIZATION

13. LIFE CYCLE MANAGEMENT

CLASSIFICATION OF HEALTHCARE INDUSTRY

The healthcare industry can be classified as

1) Medical service providers

2) Diagnostic service providers

3) Third party service providers3a) Clinical trials

3b) Healthcare convenience service providers

3c) Medical Transcription & Telemedicine

3d) Health Insurance Providers

3e) Others (laundry , caterer etc)

4) Bio-pharmaceutical manufacturers

5) Medical Devices manufacturers

OVERVIEW

• The healthcare industry is expected to increase in size

from its current € 12.72 billion to € 29.6 billion by 2012.

• India will spend € 33.8 billion on healthcare in the next

five years as the country, on an economic upsurge, is

witnessing changes in its demographic profile

accompanied with lifestyle diseases and increasing

medical expenses.

• Revenues from the healthcare sector account for 5.2

% of the GDP and it employs over 40 lakh people.

• By 2012, revenues can reach up to 7 % of GDP and

direct and indirect employment can double.

OVERVIEW (contd….)

• Private healthcare will continue to be the largest

component in 2012 and is likely to double to € 26.41

billion.

• It could rise by an additional € 6.5 billion if health

insurance cover is extended to the rich and middle

class.

• Coupled with the expected increase in the

pharmaceutical sector, the total healthcare market in

the country could increase to € 39.22 - 54 billion (6.2-

8.5 per cent of GDP) in the next five years.

OVERVIEW (contd….)

• BP measuring watch has a huge untapped potential in

the Indian market as India has one of the largest number

of Hypertensives in the world. (164 per 1000 in urban and

157 per 1000 in rural areas – 2005 WHO report)

• Such watches exist in foreign markets but have still not

been introduced in the Indian markets.

• This watch gives the option of storing the record of

fluctuations in BP and thus helps in continuous

evaluation of the patient by the cardiologist.

• There is negligible competition in the Indian market and

the technology is already existing so there will be low

R&D costs.

FACTS ABOUT OUR COMPANY

1. Ours is a medical devices manufacturing company with strong technological and R&D expertise. (Artistic designing is not our strength)

2. Our company is trying to foray into the time measuring devices industry.

3. Ours is a company that is financially sound enough to venture into small & medium projects.

4. Our company has strong distributorship network in small electronics & medical devices industries only.

CLASSIFICATION

OF TIME

MEASURING

INSTRUMENTS

Watches

Wrist watch

Pocket watchStop Watch Others

Mechanical

winding

Automatic

winding

Clocks

Wall clocks Table clocks

Instrument

panel clocksSundials

With

alarmWithout

alarm

STAGE 1 :

IDEA GENERATION

IDEA GENERATION

POSSIBLE SOURCES OF INFORMATION : Need gap Study

Feedback from the customers

Internal - R & D, employees

External market research

Competitors

Trade shows & fairs

Seminars & workshops

OBJECTIVE : Systematic generation of maximum no. of

ideas coherent to Market Opportunity, Company Objectives &

Company Resources.

BRAIN STORMING : 7 of us made a group &

had a detailed discussion regarding possible new

ideas and finally arrived at the following 15 ideas.

The brainstorming session had the following

features :

•No negative comments on any idea•People encouraged to give wild ideas•People were allowed to modify others’ ideas

1. Daily use stopwatch

2. Sundials

3. Radio alarm clock

4. Car clocks with weather forecasting & navigation

5. Pen watches

6. Auto turn-off devices

7. Toy & fancy clocks

8. Antique clocks & watches

9. BP measuring watches with alarm system

10. Jewellery watches

11. Chest watches

12. Chess stopwatches

13. High precision watches

STAGE 2 (GATE 1) :

IDEA SCREENING

OBJECTIVE : To reduce the no. of ideas by dropping the poor ideas & spotting good ideas.

OUR METHODOLOGY : Screening in 2 steps

STEP I : Brief analysis of Product

TMS

Competitor

Rough estimate of market size

Rough estimate of product price

Rough estimate of time & cost

Rough estimate of ROR

By doing this first step we eliminate 8 of the 15 ideas.

IDEAS ELIMINATED :

1. DAILY USE STOPWATCH : Minimum possibility of new innovative features that can be added & minimum margins available.

2. SUNDIALS : Market size is very small & distribution capability in that market is weak.

3. RADIO ALARM CLOCKS : Market size small due to decreasing popularity of bulky radios.

4. CHESS STOPWATCHES : Distribution ability is restricted in the sports market.

5 . PEN WATCHES : Distribution insufficient in stationery segment.

6 . ANTIQUE CLOCKS & WATCHES : Unsustainable DA & market saturated due to too many competitors.

7 . JEWELLERY WATCHES : Distribution insufficient in the jewellery market. Moreover jewellery designing is not company’s core competency.

8 . TOY & FANCY CLOCKS : Distribution insufficient in toys segment.

STEP II : Detailed analysis of the remaining ideas by

allocating the following weightages & checking for compatibility of the opportunities with the company’s

objectives & resources :

Strategy & objectives 20 %

Marketing skills & experience 25 %

Financial resources 15 %

Distribution capability 15 %

Production capabilities 15 %

R&D capabilities 10 %

Idea Rating (CAR CLOCKS WITH

WEATHER MONITORING & FORECASTING)

New Product

Success Factor

Relative

Imp

Fit Between Product Idea & Company Capability Idea Rating

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy

& Objectives 0.20 0.14

Marketing Skills

& Experience 0.25 0.15

Financial

Resources 0.15 0.09

Channels of

Distribution 0.15 0.045

Production

Capability 0.15 0.12

R&D Capability 0.10 0.08

1.00 0.625

Idea Rating (AUTO TURN OFF DEVICES)

New Product

Success Factor

Relative

Imp

Fit Between Product Idea & Company Capability Rating

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.09

Channels of


Production



1.00 0.755

Idea Rating (BP MEASURING DEVICES

WITH ALARM SYSTEM)

New Product

Success Factor

Relative

Imp


0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.12

Channels of


Production



1.00 0.915

Idea Rating (CHEST WATCHES)

New Product

Success Factor

Relative

Imp


0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.12

Channels of


Production



1.00 0.91

Idea Rating (HIGH PRECISION WATCHES)

New Product

Success Factor

Relative

Imp


0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.12

Channels of


Production



1.00 0.725

Idea Rating (CUSTOMIZED WATCHES & CLOCKS)

New Product

Success Factor

Relative

Imp


0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.135

Channels of


Production



1.00 0.850

Idea Rating (INSTRUMENT PANEL CLOCKS)

New Product

Success Factor

Relative

Imp


0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Company Strategy


Marketing Skills


Financial

Resources 0.15 0.12

Channels of


Production



1.00 0.785

So finally on the basis of these scores, we have short-listed the following 4 ideas in this stage which will further go to CONCEPT DEVELOPMENT & TESTING STAGE

1. BP measuring watches with alarm system

2. Chest watches

3. Instrument panel clocks

4. Customized clocks

STAGE 3 (GATE 2) :

CONCEPT

DEVELOPMENT

& TESTING

CONCEPT

STATEMENTS

BLOOD PRESSURE MEASUREMENT

WATCHES WITH ALARM SYSTEM• Wrist watches.

• Can measure blood pressure, pulse rate & body temperature using embedded high

technology sensors.

• Will beep & vibrate if BP goes beyond a certain level which can be prefixed by the

operator.

• Can keep a full track of all fluctuations in the blood pressure over a period of time

and thus helps in good follow-up of the patient. So it will help the doctor also in

monitoring the patient.

SEGMENTS : a) Health conscious peopleb) Established Hypertensivesc) People at high risk of developing Hypertension

BENEFITS :a) Self monitoring by patientb) Help in controlling emotions & angerc) Easy & accurate follow up by the doctor

OCCASIONS OF USE :a) Throughout the dayb) Periods of stress & anxiety

CHEST WATCHES• Comes with a chest belt which has a sensor that measures & transfers vital signs like

body temperature, blood pressure, pulse and respiratory rate to the wrist watch which

displays these readings. Gives the benefit of self-monitoring & control.

• Suitable for athletes, sportspersons & health conscious people.

• Can be used during workouts, jogging & otherwise household work also.

CUSTOMIZED CLOCKS AND

WATCHES

Will bear the brand name & logo of

company. Customization can be done in

straps, dials, needles & frames.

Will target the kids & youngsters.

Can be used as gift item.

INSTRUMENT PANEL

CLOCKSSEGMENT : Scientists, Researchers, Labs

BENEFITS : Quality, Accuracy & Precision

OCCASIONS : Experiments, Academics

EVALUATION

TECHNICAL VIABILITY 8 8 7 8

PRODUCTION AT LOW COST 9 9 9 9

FINANCIAL VIABILITY 8 8 9.5 7

DISTRIBUTION VIABILITY 9 9 9 9

BRANDING / MARKETING 7 7 8.5 8

TOTAL 41 41 43 41

CH

ES

T W

AT

CH

CU

ST

OM

ISE

D

CLO

CK

S

BP

ME

AS

UR

EM

EN

T

WA

TC

HE

S

INS

TR

UM

EN

T

PA

NE

L C

LO

CK

S

ANALYSIS OF THE SOURCE OF D.A.

MARKET SIZE 7 9 9 8

MARKET GROWTH 6 8 8.5 8.5

PROFITABILITY 8 9 9 8

COMPETITION 8 7 9 8

RESTRICTION 7 7 5 7

TOTAL 36 40 40.5 39.5

CH

ES

T W

AT

CH

CU

ST

OM

ISE

D

CLO

CK

S

BP

ME

AS

UR

EM

EN

T

WA

TC

HE

S

INS

TR

UM

EN

T

PA

NE

L C

LO

CK

S

ANALYSIS FOR THE ATTRACTIVENESS OF T.M.S

D.A. 41 41 43 41

T.M.S. 36 40 40.5 39.5

TOTAL 77 81 83.5 80.5

CH

ES

T W

AT

CH

CU

ST

OM

ISE

D

CLO

CK

S

BP

ME

AS

UR

EM

EN

T

WA

TC

HE

S

INS

TR

UM

EN

T

PA

NE

L C

LO

CK

S

Total of D.A. & T.M.S.

12

Watches

Stop watches

Wrist watches

Stand alone

Sundials Alarm clocks

Desktop clocks

Radio Alarm Watches

Wrist watches

Car clocks

GPS enabled

Auto synchronizing

watches

Specialized watches

Health

Parameter monitoring

watched

Metered Dosage watches

Adventure

Parameter monitoring

watches

GPS and Waypoint

Sport

Water resistant

All Weather

Specialized

High Precision

Atomic clocks

Research

Antique clocks

Grand father clocks

Collectibles

Wrist watches

Digital

Analog

Pocket watches

Technological Break Down Structure

Market Break down structure

Regular Users

Affluent People

Students

Fashion Conscious users

Office Goers

Children

Adventurers

Specialized Users

Scientists

Long haul Drivers

Patients

Health Conscious people

Aviators

Factory Workmen

Model Type Movement Display Price Features

Car clocks Wired to Car battery Digital/Analog Low To High Features like lap timers/

Radio alarm clock Battery/AC power Digital HighMultiple alarms, Radio,

Versatile

GPS Watches Battery Digital HighWaypoint tracking ,

Weather functions

Specialized health

WatchesBattery Digital High

Health monitoring,

Recording, alarm functions

Jewelry or luxury

watches

Hand cranked/Battery/

crystal/eco drivesAnalog Very High

High resale value,

Fashionable, Customizable

and Novelty Factor

Sport watches

Hand

movement/Battery/Ha

nd wound/ Solar

Digital or analog Low to High

Water resistant/weather

proof/ Lap timers/stop

watch functions/Rugged/

Scratch resistant

AntiqueManual or hand

crankedAnalog Very High

Novelty Factor,

Collectible, High resale

value,

Kids Battery Digital or analog Low to mediumCustomizable, fashionable

, Rugged

PDC FOR BP

MONITORING WATCHES

Market Related Criteria For BP

monitoring wrist watches1-poor 2-Fair 3-Good 4-very Good 5- Excellent

Market demand for product 5

Market Need for product 4

Uniqueness relative to competition 5

Competitive Advantage 5

Ability to explain product to consumer 4

Trade channel for product 4

Company’s understanding of the product 4

Customers acceptance of product 4

Synergy of new product with current product offered 5

TOTAL 40

Technology Related Criteria for BP

Monitoring watchesUniqueness of Technology 5Potential life cycle of Technology 4Ability to develop the technology 5Ability to patent the technology 5Ability to keep the development cost under control 2Ability to manufacture the technology 4Applicability of technology to future product 5Ability to keep the minimum potential risk associated with the

technology2

TOTAL 32

Background Arena Goals/

Objective

Special

guidelines

To Provide

precision

electronics

and medical

devices

Company has

strong R & D

capabilities and

a heritage of

high precision

medical

devices

Company aims

to capture

35 % of the

market share in

two years

To Provide

accurate and

reliable

BP/Pulse/Temper

ature

measurements

with up to 2 hours

of data storage

Mission Statement

• We are an established watchmaker in the

Premium and value segment and aim to

capture 35% of the Medical and health

conscious market in 1 year by providing

benefits like real time Health diagnostics

and Monitoring.

PDC FOR CHEST WATCHES

Market related criteria for Chest watches

1-poor 2-Fair 3-Good 4-very Good 5- Excellent










TOTAL 35

Technology related criteria –

Chest watches1-poor 2-Fair 3-Good 4-very Good 5- Excellent

Uniqueness of Technology 3Potential life cycle of Technology 3Ability to develop the technology 5Ability to patent the technology 5Ability to keep the development cost under control 2Ability to manufacture the technology 5Applicability of technology to future product 5Ability to keep the minimum potential risk associated with the

technology3

TOTAL 31


Objective

Special

guidelines

To Provide

precision

electronics

and medical

devices

Company has

strong R & D

capabilities and

a heritage of

high precision

medical

devices

Company aims

to capture

35 % of the

market share in

two years

To provide an all

in one medical

diagnostic system

with alarm

fucntions

Mission Statement

• We are an established precision electronics

supplier in the medical and electronics

segment and aim to capture 10% of health

conscious and patients in two years by

providing an all in one health monitoring

system.

PDC FOR INSTRUMENT

PANEL CLOCKS

Market related criteria for

Instrument panel clocks











TOTAL 31

Technology related criteria -

instrument panel watches1-poor 2-Fair 3-Good 4-very Good 5- Excellent


technology2

TOTAL 24


Objective

Special

guidelines

To Provide

precision

electronics

and medical

devices

Company has

strong R & D

capabilities and

a heritage of

high precision

medical

devices

Company aims

to capture

35 % of the

market share in

two years

It will

incorporate user

assignable

parameter

monitoring and

real time

monitoring

functions.

Mission Statement



segment and aim to capture 30% of

industrial and aviation displays segment in

two years by providing benefits like

precision displays and real time monitoring

of user assigned parameters

PDC FOR

CUSTOMIZED WATCHES

Market related criteria for Customized clocks











TOTAL 33

Technology related criteria -

Customized clocks1-poor 2-Fair 3-Good 4-very Good 5- Excellent


technology3

TOTAL 28


Objective

Special

guidelines

To Provide

precision

electronics

and medical

devices

Company has

strong R & D

capabilities and

a heritage of

high precision

medical

devices

Company aims

to capture

35 % of the

market share in

two years

To provide a

completely bare

bone product with

a variety of add

on and inter

changeable

casings and

straps.

Mission Statement



segment and aim to capture 30% of the

customized watches and fashion segment in

two years by providing benefits like

changeable dials and snap on straps and

changeable casings.

Aggregate Total

Market Score Technology

Score

Score

BP Monitoring

Watches

40 32 72

Chest Watches 35 31 66

Instrument

Panels

31 24 55

Customized

Watches

33 28 61

Competitors of BP Measuring Device

As this is a new concept , there is no direct competitor of this device.

However indirect competitors exist , namely

Sphygmomanometer

Electronic inflatable measuring devices

High Price Branded Wrist Watches

• The perception maps are plotted on the following parameters :

Price VS Quality

Ease of use VS Quality

Ease of use VS Price

Product Perception Map : PRICE - QUALITY

SPHYGMOMANOMETER

ELECTRONIC INFLATABLE

MEASURING DEVICE

HIGH PRICED

BRANDED WATCHES

BP MEASURING

WATCHES

Product Perception Map : EASE OF USE - QUALITY

SPHYGMOMANOMETERELECTRONIC INFLATABLE

MEASURING DEVICE

HIGH PRICED

BRANDED WATCHES

BP MEASURING

WATCHES

Product Perception Map : EASE OF USE - PRICE

SPHYGMOMANOMETERELECTRONIC INFLATABLE

MEASURING DEVICE

HIGH PRICED

BRANDED WATCHES

BP MEASURING

WATCHES

DETAILED CONCEPT DESCRIPTION

1. FORM : A sturdy & sleek watch with sensors on the

underside.

2. QUANTITY : 1 per pack with the instruction booklet & an

extra free strap.

3. MATERIAL : Made of bio-compatible non allergic rust free

material.

4. AESTHETICS : Sleek & stylish. Available in 4 colors –

Navy Blue, Grey, Lemon & Pink. Strap also available in

various colors. Completely mimics the appearance of a

normal watch.

BELIEVABLE CLAIMS : The watch monitors the

BP regularly. Beeps if there is an abnormal

increase due to anxiety or emotions & warns the

patient to be in control. Also stores weekly data

that can be transferred to the doctor’s PC for

monitoring & follow up.

TECHNOLOGY : Made of the latest German

technology. Fool proof tried & tested.

COMFORT : Very comfortable. Has a velvet

cushion coating on the underside of the strap. Soft

non irritable sensors on the underside of the body.

8. REASON FOR PREFERENCE : It’s the first of its kind in the market. Gives extreme emotional flexibility to the hypertensive patients.

9. AFFORDABILITY : Priced at a competitive 300 rupees.

10. RISK FREEDOM : Made of reliable non allergic & comfortable material. No side effects.

11. VALUABILITY : Price considerably low as compared to the benefits offered hence increases the value tremendously.

12. CONTRAINDICATIONS : People with artificial pacemakers installed in their bodies should not use this watch as it interferes with the frequency of the pacemaker.

People with Siderosis should also avoid the watch.

13. AVAILABILITY : Available at all major surgical stores. Tie ups with major pharmacy chains. Also available through the internet channel.

14. ACTIONABILITY : Easy to wear, maintain & replace batteries.

15. SHELF LIFE : Unlimited. However battery life restricted to 6 months.

16. PORTABILITY : Can be worn anywhere, even in water during swimming or in gym during exercise. Easy to carry. Provided with a shock insulating case.

17. EASE OF USE : Just program it according to doctor’s instructions & wear it. Everything else will be taken care of by the watch.

STAGE 4 :

DEVELOPING A

MARKETING STRATEGY

Marketing Strategy Development – ITERATIVE PROCESS

OBJECTIVE : To find an AFFORDABLE, BALANCED & COST EFFECTIVE marketing strategy.

TMS SIZE : 90,00,000 hypertensives out of a total of 5 crore

hypertensives in India.

TMS STRUCTURE :

Upper Class & Upper Middle Class

Primarily Urban

Medical NGOs working for social welfare

TMS BEHAVIOR :

Health Conscious People

People having blood pressure problems

Patients away from doctors & requiring continuous monitoring

PLANNED PRODUCT POSITIONING :

SHORT TERM GOALS :

1st year :

SALES : Rs 12,00,00,000 /-

PROFIT / LOSS : Loss of Rs. 2,43,90,000 /-

2nd year :

SALES : Rs 13,75,00,000 /-

PROFIT / LOSS : Profit of Rs. 31,00,000

I. Product Variants – Watches will be available in

different strap sizes and body colors – Navy blue, grey, lemon,

pink.

II. Pricing Strategy –

Maximum in first year and then gradually decrease to compete with competitors.

Skimming layer by layer.

Differential Pricing i.e. prices will be different for individual customers,

corporate customers, NGOs.

III. Distribution

Tie ups with Hospitals

Doctors

Pharmacies

NGOs

Health Associations

Internet Channel

Direct Selling through exclusive outlets in 4 Metros

Exclusive kiosks in big hospital campuses.

IV. Promotion Strategy

Advertising budget – Rs. 5 crore

Split 50:50 national : local

1/3rd into TV , 1/3rd into newspapers, 1/3rd into direct selling & tie ups

Special offers for senior citizens i.e. > 65 yrs of age

Long run sales & profit goals.

Product quality –To start high & continue to improve through R&D.

Price – Moderate.

Variants expand over the year.

Promotion Budget- To increase each yr by 2-5 %

With initial Ad /sales promotion split of 65 : 35 evolving eventually to 50 : 50 by

the end of 3rd year.

STAGE 5 (GATE 3) :

FINANCIAL ANALYSIS

CASE DETAILS

No. of hypertensives in India= 5 crores

Target market segment= Upper middle class and upper class primarily urban

Target population= 9,000,000

Cost per unit 1st year = Rs 3000 per unit

2nd year = Rs 2500 per unit

3rd year = Rs 2000 per unit

REALISTIC SCENARIO

OPTIMISTIC SCENARIO

PESSIMISTIC SCENARIO

Financial Objectives

1. Payback time < 4 yrs

2. BEP (sales value) < Rs. 15 Crore

3. Maximum Loss < Rs 5.5 Crore

4. IRR for first four years must not be < - 10 %

5. All the above conditions must be fulfilled even

in the pessimistic scenario.

Realistic Scenario

•Discounting rate= 15%

•Maximum investment exposure = Rs3.5 cr

•Payback = 1.8 years

• IRR = 3.5 %

Optimistic scenario

• Sales go up by 10%

•Cost of goods sold come down by 10%

•Discounting rate = 15%


•Payback = 1.2 years

• IRR = 6 %

Pessimistic scenario

•Sales come down by 10%

•Costs of goods sold increase by 10%


•Payback = 3.77 yrs

•IRR = - 4.75 %

The concept clears the financial objectives of the company even in

the Pessimistic Scenario.

Hence we proceed further !

• Awareness

• Trial

• Availability

• Repeat Purchases

• The no. of hypertensives in India are approximately 5 crore.

• The target population is upper middle class and the upper class which is approximately 9 million.

• Through aggressive marketing campaigns 60 %can be made aware of the product

• 30 % of the target market can be expected to try the product

• 5 % of these customers willing to buy the product

• 50 % of availability of the product in the existing distribution channel

No. of units sold in First year

= 9000000 X 0.6 X 0.3 X 0.5 X 0.05

= 40,500

Price of each unit = Rs 3000 /-

Sales = 40500 X 3000

= Rs 12,15,00,000 /-

Sensitivity Analysis

TARGET

POPULATION

AWARENESS TRIAL AVAILABILITY REPEAT

PURCHASE

PURCHASE

FREQUENCY

9000000 0.6 .3 .5 .05 1

9000000 0.61 .3 .5 .05 1

9000000 0.6 0.31 .5 .05 1

9000000 0.6 .3 0.51 .05 1

9000000 0.6 .3 .5 .051 1

9000000 0.6 .3 .5 .05 2

40500

41175

41850

41310

41310

81000

•The most important parameter is the

PURCHASE FREQUENCY but watch

being a search good is generally not purchased

more than once a year.

•Therefore TRIAL RATIO which is the next

most important parameter should be

considered & focused on.

( EXPECTED / ESTIMATED

COMMERCIAL VALUE )

CON-

CEPT

NPV

(in Rs

cr)

PROB

OF

TECH

SUCCESS

PROB

OF

COMM

SUCCESS

DEV.

COSTS

(in Rs

cr)

MKTNG

COSTS

(in Rs

cr)

ECV

BP

WATCHES

33.65 0.9 0.4 3.5 5 4.114

STAGE 6 (GATE 4) :

PROTOTYPE

DEVELOPMENT

AND TESTING

1. TARGET MARKET SEGMENT..

Class: Upper middle , Elite class

Age: 35 to 80 years

Profile: Health conscious people, established

hypertensives, people with high risk of

developing hypertension

2. POSITIONING

Check your blood pressure ,keep a

weekly record of it, transfer this

data to your doctor, get an

appointment

- all this while on the move wearing

your favorite watch.

3. PRODUCT ATTRIBUTES..

Blood pressure measuring device inbuilt in a wrist watch.

Bluetooth compatibility for data transfer and a mini memory card for data storage

Stylish looks

Waterproof

Alarm enabled

4. COMPETETIVE COMPARISION..

No competition as it’s the first of its kind

However indirect competitors exist , namely

• Sphygmomanometer

• Electronic inflatable BP measuring devices

• High Price Branded Wrist Watches

5. AUGMENTATION DIMENSION

Free one year warranty

Safe and durable

Competitive post sales service

Monitors your blood pressure and avoids risk of heart attack by warning you in case your blood pressure increases due to anger, excessive exercise, exertion etc.

6. TIMING

Product launch after diwali i.e. 3rd/4th week

of November as a new innovative product

7. MARKETING REQUIREMENTS

One month prior to launch

Advertisements in newspapers, radio,

televisions

Tie up with pharmaceuticals so as to provide

doctors with a complementary watch and

promote our product.

Provide hospitals with posters

~40,000 units in 1year

8. FINANCIAL REQUIREMENTS

• We have sufficient funds

• Breakeven: By 1.8 years

• Development cost required: Rs 3,50,00,000

• Marketing cost required:

• Rs 5 crore for the 1st Year

• Rs 3.5 crore for the 2nd Year

9. PRODUCTION REQUIREMENT

Cutting edge technology

Highly sensitive sensors

Nano technology

10. REGULATORY REQUIREMENTS..

ISO 14971: 2007 (It specifies a process

for a manufacturer to identify the

hazards associated with medical

devices)

HMU certification

Indian Medical Association Recognition

11. CORPORATE STRATEGY..

Top management committed to for

development while middle management

responsible for product management.

KAIZEN

Our corporate competency is our distribution

network and patented superior technology.

12. POTHOLES..

High maintenance

Initial discomfort of use (slightly bulky)

STAGE 7 (GATE 5) :

TEST MARKETING

TEST MARKETING

Gives opportunity to test the product & the Marketing

program :-

• Positioning Strategy.

• Advertising .

• Distribution

• Pricing

• Branding and packaging

• Budget levels

CONSUMER PRODUCT

TESTING

Standard Test

Markets

Controlled Test

Markets

Simulated Test

Markets

STANDARD TEST MARKETS

• Find small no of representative test cities.

• Conduct full marketing program /campaign

• Use store audit, consumer & Distributor surveys to gauge product performance.

• Use results to forecast national sales and profits, discover potential product problems & fine tune marketing program.

• Length of test marketing 15 – 20 days and analysis 10 days

• Tie ups with Fortis hospital, Delhi as a test market.

• Tie up with them as the product to be used, to be promoted

to all patients, with high or low BP and also to senior

citizens.

• Offer attractive schemes and discounts to the hospitals on

bulk purchases.

• Ad campaigns in all media : TV commercials , newspaper,

radio, internet, billboards.

• Hoardings all over town.

• Collaborations with hospital for introduction at medical

seminars and meets.

• Promotional pamphlets to be provided outside hospitals.

• Have stalls and counters in seminar, meets and gatherings.

• Give free merchandise to aware people of the product, with

different slogans and depictions (caps , t-shirts , badges, pens)

STAGE 8 :

COMMERCIALIZATION

LAUNCH & COMMERCIALIZATION..

• Direct marketing.

• Introduced in various hospitals.

• Ad campaigns in all media : TV commercials , newspaper, radio,

internet.

LAUNCH & COMMERCIALIZATION..

• Brand ambassador : Famous Heart Specialist

NARESH TREHAN

• Tagline: YOUR HEALTH IN YOUR HANDS

• Hoardings all over town, in hospitals.

• Free Health Checkups in various cities.

• Expanding to other metros and tier one cities.

• Slowly moving to tier two cities.

• Refreshing the advertisement campaign.

• Link the advertising to the commonwealth games. (Delhi)

• Develop telephone based or online processes for order

placements and service requests.

• Set up a helpline for people who want more information.

STAGE 9 :

LIFE CYCLE

MANAGEMENT

FOLLOWING ACTIONS ARE VISUALIZED

• Constant maintenance of focus as laid down

• No Gap

• Maintain motivation and zeal in the team

• KAIZEN = Improvement

• Meeting / conferences / interaction on weekly basis

• Constant visit by mgmt to different cities on promotional rounds.

• Expanding to tier two cities

• Adding new designs.

• Refreshing the advertisement campaign.

Process Improvement cycle

EXECUTE

THINK

PLAN

LEARN

Documents

9 Stages of Product Development