Explain how companies find and develop new-products ideas. List and define the steps in the new-product development process.

Topics: Marketing, Marketing research, Customer Pages: 10 (3415 words) Published: April 24, 2014
Introduction –
By its very nature, marketing requires companies and organisations to develop new ideas and make adjustments to their marketing efforts. New concepts, designs and products are essential for responding to the ever-changing demands of the target market/s, and are crucial for maintaining customer satisfaction, which ultimately leads to increased revenues and profits for the firm. New-product development dictates the company’s future in the market. Every person’s wants are unlimited; however, a person’s needs are narrowed to a limited amount. A product is something that can satisfy people’s wants and needs. It is one of the variables in the marketing mix (one of the ‘7P’s’). A product can be considered as the most important item in the marketing mix, since ultimately the marketing mix revolves around the Product. It can be offered to the market in the form of goods, services, ideas, events etc, The following are the classification of goods . This is crucial information for marketers as market segmentation exercises are carried out within the company in order to target certain groups of customers with specific use-related and use-situated needs. Below are four main classifications of goods; Convenience Goods - these are those goods which are bought on a daily basis, products of this type are usually considered as needs. These are goods such as milk, bread, detergents etc… Shopping Goods – these are mostly semi-durable goods which are purchased less frequently then convenience goods. These cost more than convenience goods, thus people tend to choose products over others in a process of choosing the preferred alternative. Clothes and white goods are ordinary examples Specialty Goods – these are goods which are bought infrequently. If a person decides to purchase a specialty good, one will take time on choosing the good, since these goods are much more costly than the two previously mentioned. When this type of good is bought after sales service is usually provided. Example of this type of goods includes property & motor vehicles & a Luxury holiday in a high standard hotel. Impulse Goods – these goods are not actively searched by customers when one is making a purchase. However, a last minute impulse makes a customer purchase goods. Impulse goods usually occur in supermarkets or department stores.

Idea Markets –
The creation and evaluation of new product ideas are important procedures in the new product development process. Idea markets help companies by using virtual stocks to represent product ideas, introducing a virtual marketplace for these ideas to interact and use the forces of the market to generate certain stock prices that will indicate whether a product idea could be successful or not. Thus, the concept of idea markets has been considered as one of the leading methods of creating and evaluating new product ideas. Both the creation and evaluation of ideas require certain things such as creativity and long-range forecasting abilities, but they also suffer from a great deal of uncertainty (Creative Trainer: 2007) . The following three factors show why idea markets have been proposed as the new method of creating and evaluating product idea, mainly because they positively influence the quality of new product ideas: 1.Large Number of Ideas and Idea Creators

It is essential that the quality of product ideas is given importance, as this determines the commercial success of the product. However, it is not quite that easy to determine the people that should be involved in the product creation as well as the main characteristics of the product idea. A wide pool of ideas might give rise to some unexpectedly good concepts that aren’t in demand at the moment but might be the breakthrough product idea sometime in the future. To broaden the scope of the search of the next best product idea, companies consult with several diverse and external sources such as employees, suppliers and researchers . Due to its...
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