Plan: Introduction: Product Planning and Development Product Line Product Mix

In screening the ideas, the company must avoid two types of errors:
A DROP error occurs when the company dismisses an otherwise good idea. If a company makes too many DROP-errors, its standards are too conservative. AGO-error occurs when the company permits a poor idea to move into development and commercialisation. The purpose of screening is to spot and drop poor ideas as early as possible.
3. Conceptualisation:
It would be the height of folly to develop all the ideas generated in the first step into concrete business proposals. Many of these can be eliminated just on the basis of theoretical evaluation. So only those ideas that survive screening are taken up for expansion into concrete business propositions in terms of costs, idea, manpower requirement and the like, It is quite possible that at this stage of conceptualisation some ideas may just fall through because they cannot be turned into concrete proposals which are viable enough.
4. Comparative Evaluation:
The limited numbers of product concepts that have come out of the third stage are now subjected to close scrutiny. This takes place with an eye to profitability and other cost-benefit analysis. All the available talents in the concern are brought together. In some cases, the different product concepts may even be sent to a cross section of possible customers and their opinion sought about the acceptability of the particular production.
5. Product Development:
During this stage the ‘idea on the paper’ is turned into a product on hand’. In other words, the idea is converted into a product that is producible and demonstrable. This stage is also known as ‘Technical Development’. During this stage all the developments of the product, from idea to final physical form take place.
Once the management decides to go ahead with the product idea, the proposal is now turned over to the engineering or production departments for the making of a product. But to start with, it is made only in small quantities.