Product Development strategy
Given the rapid changes in consumer tastes technology arid competitioncompanies must develop a steady stream of new products and services Afirm can obtain-new products m two ways. One is through acquisition by buying a whole company a patent or a license to produce someone else s product The other as through new-product development m the company sown research -and-development department By new products we meanoriginal products product improvements product modifications and new brands that the firm develops through its own research-and-developmentefforts.When an organization introduces a product into a market they must ask themselves a number of questions.1.Who is the product aimed at?
What benefit will they expect?
How do they plan to position the product within the market?
What differential advantage will the product offer over their competitors? New products continue to fail at a disturbing rate. One source estimates thatmore than 90 percent of all new products fail in within 2 years Another-study suggested that of the staggering 25,000 new consumer food, beverage, beauty, and healthcare products to hit the market each year, only 40 percentwill be around 5 years later Moreover failure rates for new industrial products may be as high as 30 percent.Why do so many new products fail? There re several reasons Although anidea may be good the market size may have been overestimated Perhaps theactual product was not designed as well as it should have beer Or maybe itwas incorrectly positioned in the market priced too high or advertised poorlyA high-level executive might push a favorite idea despite poor marketing