Chapter 9 summary
Chapter 9 Developing new products and managing product life cycle
New product Development strategy
New product can be obtained in two ways. One is through acquisition- by buying a whole company, a patent or a license to produce someone else’s product; other is through New product Development process. It means the development of original products, product improvements, product modifications, and a new brands that a firm develops through its own R&D efforts. New product brings new solutions and variety to the customers life and for companies, new products are key source of growth.. New products provide new ways to connect with customers as they adapt their buying to changing economic times.
The reasons behind some new product failure are pretty obvious. Some products fail because they don’t bring value to customers while some attach trusted brand name to something totally out of character. For instance, cake decorating kits, perfumes and after shaves from motorcycle company Harley Davidson.
New product Development process
To create new products, a company must understand its consumers, markets and competitors and develop products that deliver superior value to customers. There are 8 main major steps in this process.
1. Idea generation
Idea generation is the systematic search for new product ideas. Major sources of new product ideas include internal and external sources.
Internal Idea sources
Using internal sources, a company can find new ideas through formal R&D. Not only R&D but companies can pick the ideas of its employees- from executives to scientists, engineers, manufacturing staff and also salespeople. Many companies have also developed successful ‘intrapreneurial’ programmes that encourage employees to develop new ideas. For example, Internet networking company Cisco makes everybody’s business to come up with ideas by setting up an internal wiki zone through which any Cisco employee can propose an idea, comment or modify someone else’s proposal.
New product Development strategy
New product can be obtained in two ways. One is through acquisition- by buying a whole company, a patent or a license to produce someone else’s product; other is through New product Development process. It means the development of original products, product improvements, product modifications, and a new brands that a firm develops through its own R&D efforts. New product brings new solutions and variety to the customers life and for companies, new products are key source of growth.. New products provide new ways to connect with customers as they adapt their buying to changing economic times.
The reasons behind some new product failure are pretty obvious. Some products fail because they don’t bring value to customers while some attach trusted brand name to something totally out of character. For instance, cake decorating kits, perfumes and after shaves from motorcycle company Harley Davidson.
New product Development process
To create new products, a company must understand its consumers, markets and competitors and develop products that deliver superior value to customers. There are 8 main major steps in this process.
1. Idea generation
Idea generation is the systematic search for new product ideas. Major sources of new product ideas include internal and external sources.
Internal Idea sources
Using internal sources, a company can find new ideas through formal R&D. Not only R&D but companies can pick the ideas of its employees- from executives to scientists, engineers, manufacturing staff and also salespeople. Many companies have also developed successful ‘intrapreneurial’ programmes that encourage employees to develop new ideas. For example, Internet networking company Cisco makes everybody’s business to come up with ideas by setting up an internal wiki zone through which any Cisco employee can propose an idea, comment or modify someone else’s proposal.