Talking about the product, it’s something that is offered to a market to satisfy a want or need. However, a product can be an item or a service. An item and service are never the same. Both differs in terms of their tangibility. An item/good is tangible whereas the service isn’t.
Phone, TV, refrigerator are some goods/items. Whereas flight journey, cab service, customer care, hospitality are some services.
It’s basically a process which involves creating a name and an image for their developed product through use of many marketing tools. This helps customer recollect this particular brand in future. A customer can recollect any brand based on an appealing logo, use of humour in advertising, appealing images and so on.
Any company who manufactures products or offer services has a specific product life-cycle. Beginning from the development stage, growth, its maturity point and the point where the market for the product will begin to fall is called the decline. In this process, any company will manage their products thoroughly, they’ll manage their brand (Brand identity, branding strategies, brand awareness and such). So, when the product reaches its maturity stage, a company has to start developing new product. This will help the company grow in the market. New product might be in terms of product innovation, product differentiation.
New product development:
In this context I’d like to talk about new idea of Smart homes being developed by Samsung. It’s completely a new product Samsung had launched. So when it comes to product life cycle, there are 8 steps involved. Samsung found a biggest opportunity of the future and purchased a company named Smart things.
#1. Idea Generation:
Generally, pool of ideas are dropped at the innovation centre. They select the best out of those and try to think about the idea in many different ways. So, the main idea was to make life simple. To make sure it’s done right, Samsung has many ideas but not everything is possible.
#2. Idea screening:
This is the second stage in new product development is idea screening. Out of all the ideas, one best idea is selected and screened. It is screened to find the market potential for this product (new idea) and also to make sure this doesn’t fail in the market. Since, the development of a new product is an expensive affair, every company makes sure it doesn’t fail in the market.
#3. Concept development & Testing:
There is always a loyal fan base to every brand and Samsung is no new in this view. In order to convert the idea into a concept, idea will be discussed among the loyal fan base and take their suggestions and find out if they’re actually interested in this product or if they’re willing to invest on this product.
#4. Business analysis:
A complete list of information which includes profitability of the product in future, target markets, positioning the product perfectly, competition for this product, demand for this product in the market, kind of marketing mix to be used and such. Samsung found a biggest opportunity of the future and purchased a company named Smart things. So, they invested $200million and acquired smart things which is a big step towards success.
#5. Product development:
Product development is the step in which a prototype is developed and is tested in order to find out if the developed product is successful and will it make profit in the market. Firstly, Hawkinson (Founder of Smart things) had an incident that made him what he is today. There was a power outage in his house which caused the water pipes to freeze and burst. Water flowed through many spots and he had to use $80,000 from his account for repairs. He then realised, he could have stopped all of this if everything is monitored and controlled. He then developed a prototype, commercialised the product in 2013 and sold it. (With $3 million funding they received for their idea). In 2015, Samsung acquired smart things and refined their products with much needed improvements and re-launched in the market as Samsung smart homes.
#6. Product testing:
After a product is developed, it is tested in their own territory to know the pros and cons of the device. So, Samsung launched this product initially in Korea to know if it’s ready to be commercialized or still to be developed. So, they found an open space where they could fill it with the new Samsung smart things.
After the concept is developed into an end product, next step is to commercialize the product in order to launch that into the market. This stage includes pricing, marketing plans and sales & distribution info so that the product is ready for launch.
After all the above 7 steps, product is launched into the market. In September, 2015 Samsung launched the next gen smart things hub, refined products and improved app experience and many more developments. There are some list of products which are compatible to be connected to the hub in order to make home smart. They are motion sensors, presence sensors, locks, electric outlets, speakers, thermostats, garage door openers and so on.
Launch of smart homes: (https://www.youtube.com/watch?v=FTiFt9mplCE)
Samsung Australia and Deakin University have joined hands to develop smart homes for aged homes in Australia.
David Swan – Mar 9, 2016 “Smart homes coming this year” (http://www.theaustralian.com.au/business/technology/smart-homes-coming-this-year/news-story/cb50e75832337fc1e8292595f2557a8b)
Aaron Tilly – Aug 4, 2014 “Samsung acquires Smart things, A fast-growing home automation start-up” (http://www.forbes.com/sites/aarontilley/2014/08/14/samsung-smartthings-acquisition-2/#c17a8a679652)
James Duval- July 23, 2013 “Eight simple steps for new product development” (http://www.business2community.com/product-management/eight-simple-steps-for-new-product-development-0560298#67OE2icpFbXOmsfk.97)
Stacey Higginbotham- Sep 3, 2015 “Smart things, Samsung’s smart home business, has a new hub and revenue stream” (http://fortune.com/2015/09/03/smartthings-new-hub/)
Sam Loveridge- April 2, 2014 “Samsung smart home service launches today” (http://www.trustedreviews.com/news/samsung-smart-home-service-launches-today)
By Goutham Menda