Businesses Pursuing New Product Development

With the aftermath of globalization, companies are carefully thinking about the best ways to extend their product and service offering. Thus, product development strategy is critical for their success. Yet, many companies are in defensive mode and merely want to maintain the position in the market place.

However, staying in a holding position is a definite way for companies to be left behind. Innovative thinking that allows for product/service growth is a too sure way for sustainable success. In today’s discussion, we will explore the importance of product development for the growth of businesses, especially in a competitive market.

Launching into new product offerings is not easy. According to one market research, approximately 75% of consumer-packaged goods and retail products fail to earn even $7.5 million during their first year. Harvard Business School Professor, Clayton Christensen, who is the world’s foremost authority on disruptive innovation, suggests that the failure rate of new products may actually be as high as 95%. Product failure rates relate to the number of products that are launched commercially but fail.

Geoffrey A. Moore, the author of Crossing the Chasm, maintains the challenges of product deployment: “… the less successful product is often arguably superior. No content to slink off the stage without some revenge, this sullen and resentful crew casts about among themselves to find a scapegoat, and whom do they light upon? With unfailing consistency and unerring accuracy, all fingers point to-the vice president of marketing. It is marketing’s fault!” Thus, new product development is a risky proposition to senior executives making these critical positions as well as the organization as a whole.

Businesses that want sustainable growth must develop new product and services often and consistently. Philip Kotler and Kevin Keller, authors of Marketing Management, “In an economy of rapid change, continuous innovation is a necessity. Highly innovative firms are able to identify and quickly seize new market opportunities.”

In taking any actions on new product development, businesses should think strategically about their product development. Alexander Chernev, the author of Strategic Marketing Management, further argues that managing growth is the most preferred route to profitability compared to just cutting cost.

He outlines four key issues in managing growth, which include: (a) gaining and defending a market position, (b) managing sales growth, (c) new product development, and (d) product-line management. Chernev maintains, “New products and services are the keys to sustainable growth; they enable companies to gain and sustain their market position by taking advantage of the changes in the market to create superior customer value.”

With that said, new product development meaning having the ability to take a product or service idea and convert it into a tangible offering that customers want. The following are the steps that more products undergo for market consumption: (a) idea generation, (b) concept development, (c) business analysis, (d) product development, (e) market testing, and (f) business deployment.

The Ansoff Matrix is a strategic tool for product development, consisting of market penetration, market development, product development, and diversification. In market penetration strategy, organizations seek to grow using its existing product offerings in existing markets. With this strategy in mind, organizations try to increase market share. In a market development strategy, companies try to expand into new markets like new buyers using their existing offerings. In product development strategy, businesses seek to create new products and services targeted at its existing buyers.

In a diversification strategy, an organization tries to grow its market share by introducing new product offerings while at the same time entering a new market. Diversification is the most-risky approach due to simultaneous making new changes (new product, new market). Kotler and Keller further maintain the difficulty of sustainable product success: “It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up.” The concept sounds easy. However, it is riddled with problems.

Without a doubt, many companies know that product development is a risky business. Although many consumers will proudly proclaim the success of many innovative products like Apple and Google, these same buyers are not aware of the numerous product launch failures in this country. In our discussion, I demonstrated the importance of product development for the growth of businesses, especially in a competitive market. Failures often lead to innovation.

American great inventor, Thomas Edison, had his own share of failures, but learned how to innovate because of them: “I have not failed. I’ve just found 10,000 ways that won’t work.” Likewise, today’s businesses can also achieve success if they understand how to deploy their products and services to the marketplace strategically. Although there is enormous danger in failure, there is also the opportunity of unforeseen growth. Don’t wait until it’s too late.

© 2017 by DD Green

Idea Assessment Ensures Positive Performance Of Your New Product

Are you a product manufacturer, coming up with a new product in the market? Do you have any concerns pertaining to the acceptance of your product among your target audience?Or else, do you already have a product running into the market, and that product is not doing well as per your expectations? Do you want to increase the recognition and performance of your product?

If yes is your answer to any of the questions above, then you need to carry out an assessment for your business (product) idea, and in this multifaceted task, an experienced team of industrial designers and market researchers will assist you.

Did you know, ‘about 76% companies use multidisciplinary teams to seek ideas and suggestions to develop new products?‘ So was studied and published by the Product Development and Management Association (USA) in a journal in the year 1993, and the research happened in the 80s.

It was the scenario of then, the situations in present time have changed, unquestionably. The frequency at which business leaders are launching their products and how the expectations of consumers have skyrocketed, it has become of utmost importance for the products to be foolproof. If not, they hold very high chances for getting denied by the intelligent modern consumers.

For entrepreneurs, homework and hard work are a crucial exercise before they circulate a new product into the market. Similarly, if a product is not doing well as estimated, then also forward-looking entrepreneurs will need to do some coursework to turn it into a success.

By partnering with a product idea assessment team, you can solve this mind-boggling puzzle and create a happy story of your product’s journey. A new product assessment team works with your organizational squad, including the product manager, the conceptualizers, and a few members of the management board, and others.

This cooperative team initiates a series of progressive evaluations to find the best way out. We will be talking about new product assessments done by this collaborative team in the later section, but before that, let us have a look at the activities that businesses usually execute for the development of a new product –

  • Searching possible concepts or ideas of product development
  • Screening the most suitable concept
  • Testing the picked idea
  • Business analysis
  • Development
  • Product testing, sample distribution
  • Defining the cost
  • Seeking approval, license, and patent
  • And, launching the product into the market

These steps are taken by almost every organization, before the product launch. In a consumer-centric arcade, if you want to taste the cup of success, your product needs to have an edge from your competitors’ products.

Here are the tasks that product idea assessment team carries out while working with you –

  • Product feasibility
  • Assessment of Intellectual Property
  • Strategic planning to find flaws in the marketing plan and to drive success
  • Commercialization options (If you have a new product idea.)
  • Funding options (Again, it is for those instances when you have a new product idea.)

The team focuses on procedures that are based on thorough calculations. These evaluations help a business launch and popularize its newly-launched product, while taking on the market competition, and meeting the expectations of the consumers.

New Product Research Development – 4 Steps Procedure for the Companies

The business world is never static. The market is subject to constant change and limited marketing opportunities encompassing their own life. Companies planning to develop have to select their own ways to do so. There are two alternatives – either sell new products to the existing customers or look for new customers for selling the existing products. What do the companies do in real practice? Companies try to develop new products for the existing customers.

Creating new markets for an existing product need a comprehensive new product development research to acquire the right result. The costs of acquiring new customers are the key reason that makes the life of business professionals more difficult. Research has proved that cost of creating new customer base is 7 to 10 times more than selling a product to the existing customers. Hence, it is better and cheaper to generate new products for the existing customers than conquer a new market.

Now, the question is why are the companies reluctant in taking this step? Partially because the companies do not like to dilute their own brands with that of others, and partly because they do not know the systematic process of developing new products. New products development involves 4 stages. They are –

  • Talking to customers
  • Finding their needs
  • Analyzing different ways to act
  • Doing it

How to develop a new product for the customers?

The product, which customer ultimately purchases, is the joint creation of an individual from the company and an individual from the customers’ side. However, companies should adopt more systematic method. For this, companies must make a mixture of diverse kinds of customers – for instance, 2 who do not have much knowledge, 2 adventurous and 2 large consumers. Give each of them a call and ask them to give their views on how to improve your company’s services and products.

Besides calling the customers, professionals can also visit them in person and pick ideas. Visiting them physically will give certain ideas, which remote communication cannot give. After talking to the customers, make a checklist covering the items companies must focus. This will sort out the areas about which business professionals should discuss with the customers. In the list, check whether there is anything in common and then sort out things according to some categories.

After that, shortlist the contact details and information about the customers and analyze their needs. Once the companies get to know how the customers use their products, they can discuss ways of developing them. Reaping the greatest benefit from the existing customer helps companies to clarify their needs and save a fortune while stepping new market areas unknown to them.

Thus, new product development research indicates that companies or businesses be interactive with the customers, know their exact needs and wants and then do the task in the like manner. In other words, the methodical approach of the companies is acceptable. This will help the audience know what a company can serve their needs.