By Darrin Duber-Smith
New product development is important. This is an obvious statement to be sure, but until renowned economist Joseph Schumpeter observed that innovation is instrumental to an organization’s success, and that in extreme form new ideas can “creatively” destroy entire industries, most people didn’t really think that much about it. Yet all goods and services have life cycles. Some are long and some are short. Some are planned and others come as a disruptive surprise to some marketers. Products are introduced; then they grow, mature, decline, and are eventually deleted from the product mix. But in an age of hyper-competition and market globalization, product life cycles for many classes of goods and services have become so short that new product development must now be a continuous process, with many new products funded by the profits of existing products. This is what a “cash cow”, a mature but highly profitable product, is really all about.
Most new products aren’t at all accidental, but are part of a carefully planned and executed product development process. As we know from embracing “the marketing concept”, marketers must be able to prove that there are existing consumer needs in the marketplace before investing significantly in the mass production and marketing of products. Marketing is a science, albeit a soft one, and as such the new product development process can be broken down into a series of steps, only one of which is truly “optional”. Skipping the rest of the steps can only mean that the marketer is engaging in speculation, which is not usually an effective way to make decisions, especially in the world of marketing.
Planning for a new product is all about matching strengths, which are internal to the organization, with opportunities, which are external to the company. Building on strengths and matching them with consumer needs, all of which are identified by marketers during the “situational analysis” phase of the marketing planning process, allows the marketer to develop properly-positioned, competitively superior products. Any new product development process should cover at least eight basic steps, and each of these will be addressed in the next post.
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