New product development is a necessary activity for all businesses. It helps marketer stay ahead of the competition. If any company neglects to develop new products someone else will and can steal all customers. With the help of below given points you can understand the Need for New Product Development.
Need For New Product Development with Examples:
Change in Consumer “Needs & Wants”
Consumer “needs and wants” continuously change. Firms should respond to these changes through their products and services. Otherwise consumers will switch to competitor products that satisfy their “needs and wants”.
For Example consumers are becoming more health conscious, this is forcing companies to introduce low sugar, salt and fat products. Dabur Chyavanprash Sugar Free is a classic example of new product development.
To Meet Changes in Consumer Demand
Change in habit, expectations, and requirements, social customs may force companies to modify or replace their existing products.
For Example Changes in Food Habits
To Make New Profits
Profits from ongoing products decline as they reach the maturity stage. It becomes necessary for Marketer to introduce new products or modified products to the market.
For Example Tata Motors Introduced New Cars Named Tiago and Zest
The End of Its PLC
The product maybe at the end of its Product Life Cycle, the company may introduce new and improved updated versions.
For Example Microsoft Xbox to Xbox360
Product Is At the Maturity Stage of Its PLC
The product might be at the maturity stage of its Product Life Cycle and need changes to stimulate an increase in sales.
For Example Maruti Suzuki Swift have replaced its Second Generation Swift (2004–2010) with Third generation in 2010 with more features.
There may be environmental changes which the company wants to capitalize on – PEST.
For Example Music companies are now selling more music via internet downloads than through traditional retail shops. Record companies started selling music through the internet after the success of the internet sites which offered illegal music downloads.
Competitors may force change
Competitors may force change with changing technology and innovation. Many customers often want the latest gadget to show to friends and colleagues. If a product is successful then competitors will attempt to develop similar products.
For Example Google Android
Poor Sales or Negative Reputation
If all of your products are experiencing poor sales or suffering from a negative reputation, it is time to change your product offering.
For Example In 2001, the introduction of the Pod MP3 player reversed the fortunes of Apple Computers. Since then Apple has introduced the successful iPhone and iPad.
- Marketing Management, Ramaswamy & Namakumari, 4th Edition, McMillann
- Principles of Marketing, Philip Kotler & Armstrong 11th Ed., Estern Economy, PHI.
- Marketing Management, A south Asian Perspective, Philip Kotler, Keller, Koshy, & Jha, 13th Ed., Pearson.