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.
Q: Process of New Product
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?
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.