Strategic Report on Innovation and New Product Development Process

Question: Discuss about the Strategic Report on Innovation and New Product Development Process. Answer: Introduction The competitiveness of an international company is dependent mostly on the steps that it undertakes before introducing new products in the market in addition to its innovativeness. According to Hyrup et al (2012), Innovation is the process of inventing an idea which is put into practice by creating a service or goods that customers will pay. Innovation involves the use of imagination or information in generating useful products or services (Johnston and Bate 2013).The buyers purchasing power is increased and more profits are realized by a business that embraces innovation in their products or services. The process of introducing a new product in the market is called New Product Development (Cui, Chan, and Calantone 2014). Objectives Discussion on how the growth of Heinz company have been facilitated through innovation Explanation on the process that Heinz Company takes in New Product Development. Discussion Innovativeness The Heinz Company has been very innovative to capture its market internationally. The innovation has been enabled by incorporating the following into its production. Innovative Packaging Packaging provides strong brand personalities, makes the products stand out and communicates the benefits of the products .The packaging helps to differentiate the products between competitors and hence enhance brand identity (Rundh 2013).The packaging techniques for the products of the Heinz Company have been unique compared to the competitors. The products that Heinz produces have a unique logo that is very attractive for the customers and is the main reason why the customers purchase the products in bulkiness. The growth of this company has therefore been linked to innovative packaging. Brand Name The brand name of the products should be able to reinforce the product promise. The customer brand loyalty is mostly determined by the brand name of the products. According to Kapferer (2012), the brand name affects the customers perception of the products and act as an intervening variable for the customers to purchase a certain product. The brand name change the psychological perception of the products by the customers which makes them regard the product as of high quality and in turn make the customers prefer the products from other products that act as a substitute (Brodie et al 2013).The Heinz Company has been taking a lot of time before establishing the brand name for its products. Different brand names are developed and the customers choose the best brand name for a new product before being introduced in the market. The brand name for products has therefore been the main contributor to the growth of Heinz Company. After-sales Service Customers repeat their purchasing if their initial buying experience was not faulty. After sale service is vital for the company as it boosts a competitive edge against other market players. The majority of the customers want high-quality post sales services for them to buy goods in bulkiness or spending more money on services or goods. The after sale services include reverse logistics, instant customer care, transport of goods to the buyer premise and return product management (Velamuri, Bansemir, Neyer and Mslein 2013). The Heinz company has launched the after sale services department to deals with the customer after the goods are sold. After the establishment of this department, the company has immensely increased the sale volume for the produced products resulting to growth. Product Pricing Innovative marketing strategies involve psychological pricing of products. According to Hinterhuber and Liozu (2014) certain prices for the products impose a psychological impact on the customers which convince them to buy the product. Odd pricing forms an example of psychological pricing where the price of the products is expressed to almost a round number for example prices like $29.99 and $3.97. The customer perceives products with odd prices to be cheaper than they actually are, hence tend to buy more products. The customers perceive the price $ 29.99 as being $20 rather than 30$. The demand for the products with odd pricing is thus increased compared to those with even pricing. The marking of goods at the lowest possible price is important as the decision making of the customers on the price of the product is changed and hence buys the product. The use of introductory prices for new products in the market is also a form of innovation. The introductory prices are low prices that a new product is sold to customers and after the customers are used to buying the product the prices are slightly raised to avoid a loss to the company. The Heinz Company has introductory prices for new products in addition to integrating odd pricing for its products to induce the customers to buy the products. The psychological pricing has been one of the contributors to the growth of the company internationally. Blending Blending involves mixing one substance with another so that it can form one mass. Blending is one of the methods that a business can include in its innovative ideas. The blending of products improves their quality, smell, and color (Cagan and Vogel 2012). The Heinz Company has been at the forefront in blending its products to ensure that the product provides the required value for the customers. The ingredients used by the company are ensured that are safe for human consumption. Almost every product for this company has a unique ingredient which improves the taste, smell, nutritive value and the appearance of the product to the customers. The customers buy the products for Heinz Company due to innovativeness in blending the products beyond their expectation and this has been the main reason for the growth of this organization internationally. The Innovation of New Products. The invention of a new product is part of innovation for a business or organization. Li et al (2013), assert that the organization that introduces new products in the market has a competitive advantage and hence expands and grows faster compared to other industries. The new products should be unique from other products produced by the company. The Heinz Company has been producing new products which have been enhanced by the establishment of innovative centres like European innovative centre. The function of the innovative centre is to come up with new products which are healthy for human by embracing nutritional science in the invention of the products. The centres have workers who include researchers, food scientist, quality engineers, and nutritionist. New products introduction in the market has been the main contributor to the growth of the company.2.2 The Main Components of New Product Development Process for Heinz Company Idea Generation Basic research is the main component for generating ideas on new product development. The insight for a new idea can emanate from trade shows, consumers and market trends, employees, competitors, sales persons, ethnographic discovery methods and corporate spies. The ideas can also be generated by conducting the SWOT analysis for the organization. The idea generation for new products is vital for the growth of the organization as new products are able to capture the changing customers needs and preferences (Olver and Hess 2011). The idea generation process should, therefore, be incorporated as part of the growth strategy for Heinz Company. Idea Screening The ideas generated by new product development should be screened before being implemented. Chan et al (2011) argues that it is not all ideas that are generated for initiating a new product should be continued, some of the ideas are dropped based on certain set criteria. The best idea would be the one that increases the market share and at the same time, the customers benefit from the product. The factors that would be considered in screening for the idea include the anticipated competitive pressure that the idea for the product would have, technical feasibility in manufacturing the product and the profitability for the new product to the organization. The Heinz Company also look into the ideas generated and decide on the best idea that should be implemented. Testing the Concept The process involves the investigation of the intellectual property rights for the product, the target market and the benefits the product will have to the organization and the customers. The product should be analyzed for its cost effectiveness, the total cost of production and the reaction that the customers will have on the product (Olver and Hess 2011). Business Analysis The stage involves approximation of the selling price of the expected product. The company should evaluate other companies that produce similar products and the customers feedback about the product in order to determine the likely selling price. The estimated selling price can be used to approximate the likely profits that can be reaped from the sales of the product. The size of the market for the anticipated product can also be estimated to determine the sales volume for the product (Annacchino 2007). Business analysis is vital during new product development process in order to determine if the product will suit the organization Marketability Test The product should be tested in the market before it is authorized for production. The marketability testing involves producing physical prototype and the product is then packaged to determine customers reaction (Tahera, Eckert and Earl 2015). Trade shows and customers interviews on the product are conducted. The product is distributed to the marketplace and sold for the first time and determine whether the customers purchase and accept it in the market. Adjustments are made based on the customer comments regarding the product. Technical Implementation The stage involves several departments of the company including finance, marketing, and production department. Fuller (2016)claims that the production department will formulate its plan on how it will produce the product, the finance department will be responsible for providing the funds required to introduce the new product in the market while the marketing department will establish the policies on how the product will reach the target population. There should be appropriate planning for the engineer operations and appropriate supplier collaboration before the product is produced. The resources should be estimated which are needed for manufacturing based on the requirements for production. Commercialization Commercialization is at times considered as post new product Development. The new product is launched officially and is distributed to the market for purchase by the customers. The distribution channels are loaded with products. The product is advertised in different advertisement media so that it can be known by the consumers (Kahn et al 2012). The technical support has the mandate of monitoring the progress of the new product in the market. Perfect Pricing The new product is introduced in the market at a low price called the introductory price. The organization has the mandate of ensuring the price of the product is changed after a grip of the market is established. The factors to be considered in determining the price of the products in the market should be based on the overall cost of production of the product and the competition from other companies producing similar products (Corrocher and Guerzoni 2015). The internal cost should not exceed the profit for the newly introduced product. Perfecting pricing is important in ensuring that the company does not undergo a loss and at the same time ensuring that the prices are not so high that the purchasing power of the buyers is considerably reduced. Conclusion The growth of any manufacturing company is usually realized when the company embraces the best processes in the introduction of new products and innovation while dealing with its products. The innovation process is not just coming up with an idea but how that idea can be implemented in producing useful services and products that customers can purchase. The innovation involves not only coming up with new unique products but also changing the existing products to the customer preference so that they can increase their purchasing power. The innovation for the existing products that enhances the growth of the company includes innovative packaging, introductory and odd pricing, blending techniques, after sale services and brand name. Recommendation The strategic growth is realized after c company engages in effective new product development process. The new product development process should be integrated into the strategic growth report as weak new product development process can result in a considerable loss to the company while effective new product development process acts as a boost to the growth of the company. The Heinz Company should include the New product Development process in its strategic growth report when it discusses on how the innovative centres whose purpose is New product Development have resulted to the growth of the company. References Annacchino, M, 2007.The pursuit of new product development. Amsterdam: Butterworth-Heinemann. Brodie et al, 2013. Consumer engagement in a virtual brand community: An exploratory analysis.Journal of Business Research, vol. 66, no. (1), pp.105-114. Cagan, J and Vogel, CM, 2012.Creating breakthrough products: revealing the secrets that drive global innovation. FT Press Corrocher, N and Guerzoni,M, 2015. 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