Define new product?
Businesses
focus on designing new products and selling these products to customers. The
company's goal with creating new products involves two parts. The first part
consists of finding a product that customers want to pay for; only products
that customers purchase produce revenue for the business. The second part
consists of beating competitors to market. The first company to offer a product
generates the greatest number of repeat customers.
Philip
Kotler & Gary Armstrong: A new
product is a good, service, or idea that is perceived by some potential
customers as new.
Steven
J. Skinner: A new product is one that
a specific organization has not marketed previously, although other
organizations may offer similar products.
Evans
& Berman: A new product is a
modification of an existing product or and enovation that consumer perceives as
meaningful.
Process of developing a new product or service for the market. This type
of development is
considered the preliminary step in product or service development and involves
a number of steps that must be completed before
the product can be introduced to the market. New product development may be
done to develop an item
to compete with a particular product/service or may be done to improve an
already established product. New product development is essential to any business that
must keep up with market trends and
changes.
The process of
creating a new product involves nearly every department in the organization.
Many companies create a new product development team. The team includes
representatives from the purchasing department, research and development, the
production area, accounting and marketing. The purchasing and accounting representatives
contribute financial data regarding the new product. The purchasing
representative contacts vendors and provides material cost information to the
team. The accounting representative uses the material cost information,
estimated labor costs and calculates the total product cost. The accounting
representative also calculates a potential profit margin using the anticipated
selling price from the marketing department.
Q: Success of a New Product?
Ans:
Philip Kotler & Gary Armstrong: To create successful new products, a
company must understand its consumers, markets and competitors and develop
products that deliver superior value to customers.
The
following point should be considered:
a) Adequate market demand, b) Proper utilization of money & resources, c)
Similar to existing market structured) existing production system, e)
Efficiency & experience of management, f) Social acceptability, g) Legal
obstacle, h) Environmental influence, I) Differential quality, j) To increase
brand & company image, k) Government patronization.