New-product development: several basic steps to make a new product successful Abstract
Considering the fast change in customer taste since the society is always making progress and individuals pursue more advanced technique and more convenient life styles, every company should try to innovate new products which satisfy customers’ need. However, only a few new products can be successful, and research shows that 90% of new products will fail after they enter the market (Kotler, 2008). Several reasons contribute to this failure. Therefore, analyzing risks about new products and managing uncertainty seems to be important. Also, there are several steps which help companies managing new products and launch them into market successfully.
In the rapidly changing business world, companies face a variety of consumers’ requirement such as high competition from opponents as well as technological innovation. In order to adapt to the fast changing environment, new product development seems to be fundamental. However, it is not easy to make new products successful since most of them may fail in a short time. Several reasons can demonstrate this phenomenon. For instance, some products may not be designed properly (Kotler, 2008), while some might enter the market at a wrong time and others may not market well and so on (Kraushar, 1970). Thus, it is essential for companies to manage new products properly. Companies would reduce risks of developing new products if they were able to manage them systematically. This project will firstly define the term ‘new product’ and then discuss the importance of new product development. Following this, it will focus on the risks of developing new products and risk management. Next, managing new products will be discussed. Then, it will illustrate marketing new products. Finally, it will conclude that new products could be launch successful if companies managing them well.
Definition of a new product
Before discussing risks of new product development, it is necessary to define the term ‘new product’. A new product could be an innovation of an existing product or an analogue of competitive rivals. It also could be a product which has existed in other countries but not in home countries. Of course it could be an absolutely new product which can not be found from the market (Kraushar, 1970).
The importance of developing a new product
‘Innovation is at the heart of many companies’ activities’ (Trott, 2008, P.4). Companies which want to survive in today’s market should innovate since innovation means improvement of existing products or developing a new product which is equipped with better quality. According to Business Week 2006, the top three most innovative companies are Apple, Google, 3M which are also very successful corporations worldwide.
A new product has many advantages for companies. Firstly, it may bring about great value to a company. For example, In 2007, Apple announced that they would launch a new touch-screen mobile phone (iphone) which was invented by ipod mobile phone (Trott, 2008). This kind of mobile phone was welcomed by customers after its launch since it was equipped with a powerful system which could compatible with a good many programs and functions. Three years later, after producing several models, Apple’s iphone has become prevalent and it also greatly improved Apple Company’s revenue (West &Mace, 2010). Secondly, new products can improve competitive power for companies because new products might have better quality and could reach customers’ need. For example, when digital cameras appeared in the market, film cartridges were gradually replaced by them. Companies such as Kodak and Fuji changed their targets into digital camera immediately and this wise response gave Kodak and Fuji more competitive advantage since they moved faster than their competitors. Therefore, they got first-move advantage and much time to innovate and seize market share. Now Kodak...
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