Strategies for Product and Service Innovation at Cole's Supermarket

This report provides an in-depth analysis of Cole's Supermarket's new product development practices, drawing on literature related to new product development models and success factors. It evaluates the company's use of the BAH model and examines factors such as marketplace need, product benefits, differentiation, and promotion. The report details Cole's new product development practices, including idea generation, screening, concept development, product development, and commercialization, while also highlighting the use of SWOT analysis. Areas for improvement are identified, such as marketing research, product pricing, product life cycle management, product concept development, diversification, differentiation, and teamwork. The analysis considers both strengths and weaknesses in Cole's approach, offering recommendations to enhance their new product development processes.

Running head: MANAGING PRODUCT AND SERVICE INNOVATION
M A N A G I N G P R O D U C T S A N D S E R V I C E I N N O V A T I O N

MANAGING PRODUCT AND SERVICE INNOVATION
2
EXECUTIVE SUMMARY
The main aim of this report is to develop the strategies for new product development in Cole’s
supermarket. It is evaluated that BAH model is implemented by the company for developing a
new product. Marketplace Need, Product Benefits, Clear Differentiation, and Effective
Promotion are different factors for success in the new product development. Moreover, Idea
Generation, Screening, Concept Development, Product Development and Commercialization,
and New product development strategy are different new product development practices that are
used by Cole’s supermarket. SWOT analysis is conducted by Cole’s supermarket for developing
a new product. Furthermore, Marketing Research, Pricing Product, Product Life Cycle
Management, and Product Concept, Develop a New Product as a Project, Diversification,
Differentiation and Develop New Products in Teams are different areas in which the company
could improve their new product development practice.

MANAGING PRODUCT AND SERVICE INNOVATION
3
TABLE OF CONTENTS
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Detailed analysis of the organization’s new product development practices and detail areas of
strength and weakness.....................................................................................................................8
Detailed recommendations for areas in which the company could improve their new product
development practice.....................................................................................................................13
References:....................................................................................................................................17

MANAGING PRODUCT AND SERVICE INNOVATION
4
INTRODUCTION
This report presents the literature on new product (or service) development models and factors
for success in NPD. It also discusses the detailed analysis of the organization’s new product
development practices and detail areas of strength and weakness. This report also recommended
the areas in which the company could improve their new product development practice.
A LITERATURE ON NEW PRODUCT (OR SERVICE) DEVELOPMENT
MODELS AND FACTORS FOR SUCCESS IN NPD
Literature on new product (or service) development models
The seven process of BAH model is new product strategy, idea generation, screening and
evaluation, business analysis, development, testing, and commercialization.
(Sources: Armstrong, Kotler, Harker, and Brennan, 2015).
Idea Generation
The initial phase of new product development is a generation of the idea. The idea originated
from everywhere, could be any sort and can be numerous. This phase entails origination of high

MANAGING PRODUCT AND SERVICE INNOVATION
5
amount of idea from different sources such as internal sources, SWOT analysis, market research,
competition, and customers. In this way, it is identified that many corporations give incentives to
their workforces to generate the product ideas. A corporation can review its strength, weakness,
opportunity, and threats to arrive at the feasible idea. In addition, the company may constantly
review the modified needs, trends, and wants in the market. Sometimes feedbacks and reviews
from the customers and their idea could aid the corporation to generate the new product ideas
(Wowak, Craighead, Ketchen, and Hult, 2016). Moreover, competitors SWOT assessment could
also supportive for a corporation to generate the ideas.
Idea Screening
The idea could be several, but good ideas are some. This second process of new product
development entails addressing of good and feasible ideas and removal of infeasible data. There
is certain factor considers within the idea screening such as weakness and strength of the
company, need of customers, affordability, on-going trends and expected ROI (Gopalakrishnan,
Libby, Samuels, and Swenson, 2015).
Concept Development & Testing
The next phase of new product development entails concept development and testing. A concept
is a comprehensive approach and blueprint description of the notion. When an idea is created in
each phase then it should be presentable. It is an alias as a concept. All the notions, which pass
through the screening stages, are transformed into the concept for testing purpose. The concept is
now conveyed to the target marketplace. Some identified customers from the targeted group are
selected to investigate the concept (Marion, Eddleston, Friar, and Deeds, 2015). Information is
offered to the customer to aid them to imagine the product.
Business Strategy Analysis & Development

MANAGING PRODUCT AND SERVICE INNOVATION
6
The testing result aid the business to make the final concept to develop the products and services.
Business has developed the concept by assessing and choosing the marketing and other business
strategies, which would be implemented. Furthermore, estimated product productivity is
predicted as well as branding strategies and marketing mix is decided for the products and
services (Genç, and Di Benedetto, 2015). In this process, there are certain elements considered
by an organization such as pricing strategy, the rivalry of the product, breakeven point, and cost.
Product Development
The product concept is changed into actual substantial products and services. The outcome of
new product development phase is to build the prototype and limited production replica. In this
phase, all the branding and other strategies are tested earlier and then applied (Fung and Choi,
2018).
Test Marketing
The actual prototype and feedback are developed for the investigation unlike the concept of
testing. Customer feedback is gathered and makes an alteration, if necessary in order to develop
the product. This procedure is significant because it validates the whole notions and develops the
corporation for launching the products (De Massis, Kotlar, Frattini, Chrisman, and Nordqvist,
2016).
Commercialization
The product is ready for marketing. The marketing mix is used at this stage to launch the
product. The final decision is made in this stage for developing the products and services. In this
phase, marketers are decided to launch the product. This phase entails the briefing about distinct
departments regarding the targets and duties. In this stage, each small and major judgment is
developed before final introduction stage of the new product development (Fuller, 2016).

MANAGING PRODUCT AND SERVICE INNOVATION
7
Factors for success in NPD
Following are a certain factor for success in NPD
Marketplace Need
This factor is essential to research the market in order to identify the preferences and needs of
customers. It contributes to build the profitable products and services solution that has high
chances for growth. There are certain techniques to assess the wants and desires of customers
such as test product, sample marketing, customer surveys and data pooling. This tool is also
supportive to design the products (Chuang, Morgan, and Robson, 2015). It offers clear benefits
to customers associated with entrants.
Product Benefits
Analysis of customer’s need does not take assurance to get success. There is a gap in the
functions of marketing as it could create complexity to develop the product. Marketing is
significant to understand the wants of customers and ways to market the benefits. However, they
do not design and build the products. A quality products and services are required by customers
as it should be considered by the business during developing the products (Colombo, Dell'Era,
and Frattini, 2015). It is also stated that when early adopter purchases bad products and services
then they will dissatisfy with their needs and expectation and spread this information in around
the world.
Clear Differentiation
A quality product does not effective for success in new product development. The company
should develop clear market position originated from differentiation and competitor’s
assessment. When 10 competing brands demonstrate the exact same advantages then customer
decision could be very illogical. In promoting and developing the products, business should

MANAGING PRODUCT AND SERVICE INNOVATION
8
emphasize on one or two benefits that separate the brand and that customer will appreciate (Du,
Yalcinkaya, and Bstieler, 2016). For example, organic food marketers try to appeal to customers
particularly associated with more natural and healthy food alternatives.
Effective Promotion
Promotion is a key factor in the success of product marketing, which is controlled by the
marketing activities. It entails the public relations, paid advertising, sales efforts, and free media
exposure. The company should choose the appropriate media to make a link with the target
customers and generating the message that will appeal to customers in an appropriate manner. It
is a significant factor to get success in new product development. Poor promotion could lead to
marketing failure even with a quality product (Roper, Micheli, Love, and Vahter, 2016).
Advertising investigation is beneficial to develop the influencing message, which promotes the
desired benefits and arrive at the target market.
DETAILED ANALYSIS OF THE ORGANIZATION’S NEW PRODUCT
DEVELOPMENT PRACTICES AND DETAIL AREAS OF STRENGTH AND
WEAKNESS
Cole’s supermarket uses different new product development practices to develop the new
product. The following practices are used by Coles Supermarket:
Idea Generation
It is a primary phase in which Coles Supermarket sources the idea with regards to the new
product. There are some sources by which Coles Supermarket generate the idea regarding new
product ideas such as competitors, business customers, journals, employees, suppliers, and
newspaper. It also uses technology based idea generation tools (Zhao, Cavusgil, and Cavusgil,

MANAGING PRODUCT AND SERVICE INNOVATION
9
2014). This stage is significant because it creates the basis for all other stages, and the ideas
generation shall direct the whole procedure for product development.
Screening
The gathered ideas have to go via screening procedure to filter out the feasible ones. Coles
Supermarket gathers the beliefs of employees, other businesses, and customers in order to
eliminate the chase of expensive unfeasible information. External industry factors may influence
the Coles Supermarket like changes in technology, competition and persuades the decision
criteria of enterprise (Appio, Achiche, Martini, and Beaudry, 2017). At the end of the screening
procedure, a company remains with certain feasible ideas from the high amount of pooled data.
Concept Development
Coles Supermarket undertakes an investigation to assess the potential expenses, productivity,
revenue generated from the product. It also conducts SWOT assessment to address the weakness,
strength, threats, and opportunities in the marketplace. The market approaches are also used by
the Coles Supermarket to assess the target group of product, which provides segmentation of
product’s marketplace. Market segmentation is essential because it facilitates the firm to assess
its niche (Rubera, Chandrasekaran, and Ordanini, 2016). The identified niche market can impact
on the different marketing decision.
Product Development and Commercialization
Product development includes the actual design and development of the product. Development
commences with the production of the prototype, which provides market testing. As per the
outcomes of the tests, Cole’s supermarket chooses on whether to carry out large-scale
manufacturing or not. There is a need for large-scale production and commercialization to get a
positive outcome. Cole’s supermarket commences their promotion campaign for developing new

MANAGING PRODUCT AND SERVICE INNOVATION
10
products (Luzzini, Amann, Caniato, Essig, and Ronchi, 2015). The market investigation is also
obtained at the time of conception phase to persuade the location and timing of the product
launch.
New product development strategy
Cole’s supermarket uses new product development strategy to avoid wasting time, business
resources and money. This strategy aids the company to organize the product planning and
investigate, identify the views of customers and predictions and feasible plan and resource the
new product development project. This new product development strategy aids to eliminate the
misreading and overestimating the target market. It has launched a poorly intended product that
does not attain the requirement of the specified customer. It also spends on the resources to
decline the projected development costs (Fang, Lee, and Yang, 2015). Cole’s supermarket also
exposes their business risk from the unexpected rivalry. Following are different steps to develop
the new product strategy:
Define product
Cole’s supermarket makes the planning of accurate description of the product. It would aid them
and their team to focus on avoiding NPD pitfalls and building too many products at once. It also
makes optimum utilization of resources to build the product (Morgan, Anokhin, Kretinin, and
Frishammar, 2015).
Identify market needs
Cole’s supermarket targets the market and its needs and wants to successfully develop the new
products. A strategic, targeted and purposeful approach to NPD ensures that product fits into the
market. For identifying the market needs, the company initially targets the market for the product
I am proposing and then identify their needs. It also assesses the benefit of the proposed new

MANAGING PRODUCT AND SERVICE INNOVATION
11
product. Cole’s supermarket also addresses the annoyance of market towards existing product
and its type (Chang, and Taylor, 2016). It also identifies that ways to fit the market into the
existing market. It also demonstrates the uniqueness of products as compared to its competitors.
Cole’s supermarket addresses their current market research. The company also undertakes the
additional research to assess new product proposal with the customers. For instance, the
company set up a focus group and conducts customer survey (Stark, 2015). It also finds out
regarding customer research.
Establish time frames
The company provides adequate time to create and execute the new products. The objective of
Coles Supermarket is to develop the new products and informs time frames and deadlines for
execution (Tukker and Tischner, 2017). It should be realistic and thoughtful. In this way, the
following objectives will be used:
 To race against the competition and build efficiency amid the team
 To attain particular launch date and influence the demand for seasonal products and
calendar events
 To be responsive towards the need of the customer and increase demand by ensuring the
right product at the right time
 To stick the business by maintaining the schedules for resources and NPD
Identify key issues and approaches
Coles Supermarket focuses on different task to develop the product, which is feasible for
customers. The nature of the business and their idea will assess the phases of developing new
products. The company develops the certain stage for the success of NPD (Kawakami, Barczak,
and Durmuşoğlu, 2015). These stages are:

MANAGING PRODUCT AND SERVICE INNOVATION
12
 Creating and screening the ideas
 Building and screening aspects
 Testing aspects
 Evaluating market and business strategy
 Establishing and market testing products
 Executing and commercialization of products
SWOT assessment of Coles Supermarket:
Strengths
It commands the share of a lion in liquor
market and domestic food because of a long
history in Australia
Unmatched branding and advertising in the
retail space of Australia. It also uses a patriotic
slogan such as ‘proudly Australian since 1914’.
It has also initiated the TV sponsorship of 2008
in summer Olympics with slogan particularly
structured for price-conscious purchasers.
Attractive pricing strategies and frequent price
cuts and promotional benefits from time to
time (Leclercq, Poncin, and Hammedi, 2017).
An enormously effective promotional
campaign such as linked with Apple computers
and 12 big suppliers and started the campaign
with the title ‘apple for student’
The distinct extent of generic products, which
intends to cater to the particular type of buyer
Lucrative online order and pickup/delivery
facilities (Chaudhuri and Boer, 2016).
Weaknesses
Unfavorable publicity in around the inflexible
negotiation with Australian suppliers. It has
moderately harmed the sentiments of people
with regards to Coles Supermarket. It has also
declined the potential return on investment.
Coles deals in lower margin as compared to a
rivalry like Woolworths and Wesfarmers (Tuli,
and Shankar, 2015).
Opportunities
To grab high control of the supply chain by
focusing on producing and harvesting the
profit at the higher point
The geographic extension could aid to reach
out to the newer area at the international level
Marketing and sponsorship practices could aid
to improve the business (Morgan, Anokhin,
Kretinin, and Frishammar, 2015).
Threats
High rivalry in the supermarket market has led
to reducing the food prices and margin.
Customers get confused amid different brands
because of inadequate and unclear
communication for each (Rahmani,
Emamisaleh, and Yadegari, 2015).
The high amount of purchasers might opt for
independents and smaller retailers like butchers
and greengrocers due to convenience.