Many companies nowadays realize that innovations are crucial for their survival. Therefore, it’s imperative that they find a balance between maximizing the benefits of existing products and introducing new and better products into the market that maintain its market while at the same time attracting new ones. Introducing a new product into the market involves; coming up with idea, doing research on the market, analyzing the results, actual designing and developing the product and testing the product. The last step is the commercialization of the product (Metikurke). The best companies have a systematic way of introducing new products to the market and are prepared for any eventualities that may arise. However, new product development comes with it many challenges that are discussed here.
The basic challenge in new product development is the opportunity that would be accrued from the product. How will that new product benefit the company? Most companies would want to generate more revenues from new product. Therefore, any company would first have to do an extensive research before it introduces a new product into the market. If the new product is likely not to generate the desired results then it is better not be introduced into the market. In 1985, Coca Cola launched New Coke, which it thought was an improvement to the beverages already in the market. This new brand would eventually replace the original ones. However, this launch proved to be a failure as many people had actually loved the original brand. As a result, the company witnessed dwindling revenues as people opted for Pepsi. To reverse the trend, the company reintroduced the original brand to the market (Digital Manufacturing). This shows that companies have to do a thorough research about a new product before introducing it into the market.
The world is fast evolving. Thus, many companies are always faced with these technological changes. These challenges can be encountered especially when a company is trying to develop a new product using a technique that is also new and not yet proven. This product may demand more development and hence more time that it had been planned (Kim, 2011). Technological challenges are common especially in the information and communication sector where new technological trends are emerging at a fast rate.
The changing market trends also pose a problem to a company when developing a product (Kim, 2011). Before a company comes up with a new product, it has to be sure about this. Does the market really need it? If no, when will it need (Burt)? Since the product is meant for the market, a company should not introduce a new product at the wrong time. For example, Apple Inc. had the best of ideas when it introduced its Macintosh TV. While it was a noble and innovative idea, the results achieved were very poor. These poor returns have been blamed entirely on the wrong time of introduction. This is because the market didn’t need it then. Macintosh TV was introduced well before the general public warmed up to the idea of watching television on their computers (Oobject).
New product development requires an additional capital being channeled into the process. However, for small companies, this may prove to be an obstacle as not many of them will afford such additional capital.
The activities of a competitor can greatly affect the introduction of a new product into the market. This is essentially true if the competitor is offering the same product but at a cheaper cost. Many companies have faced this challenge and their new products indeed failed to get the desired results.
The marketing approach of a new product will go a long way in promoting the new product. Since something is not yet tested, the public has to be convinced that buying the product is worthwhile. Many companies have come up with some innovative products which ended up failing in the market as a result of poor marketing. The Sinclair C5 electric vehicle was a great innovation. However, the vehicle did not achieve good results when it was finally released into the market. This is attributed to the fact that the manufacturer marketed it very poorly. It is claimed that Sinclair poorly defined the market and prior research on the market was not properly done. Additionally, the actual safety of the vehicle and its performance level was not as it had been marketed. As a result, the vehicle launch was deemed a failure (Marks). This simply means that companies must market their new products in the proper way.
New product development in a company does involve a team, not an individual. As it is common with a team, people come up with new ideas almost all the time. While this is important, sometimes these ideas may come late during the production (Kim, 2011). Many companies find themselves in a situation where they have to start the process all over again to incorporate these new concepts. This delays the introduction of the product to the market. But as we have seen, the global market nowadays is very dynamic and this delay may affect the reception of the product especially if a competitor had introduced a similar product.
How Technology has assisted New Product Development
The advance in technology has revolutionized the design of new products. For example, the emergence of Computer aided design software has enabled companies to develop new products more efficiently. Using this phenomenon, simulations can be done on the product which gives a company almost a clear view of how a new product will perform. A successful simulation will imply that the product is fit for the market. Computer aided designs are widely used in Innovative Engineering companies all over the world like aircrafts (NASA)
The world is fast changing through the advance of the internet. Nowadays, companies can easily access information about a certain market through the use of internet. This information can be used during the production of a new product such that the company differentiates the product to that specific market. For example, a company can differentiate a product according to continents. This is because of the different lifestyles, cultures and buying power.
As technology advances, so does globalization. Globalization has led to more integration among the countries and the business world. The benefits of these integrations are enormous as companies can keep contact even when they are located far apart. It is very common nowadays for companies to set up their subsidiaries in far way countries and continents. This in effect means that these subsidiaries produce more localized products to a more localized market. Examples of such companies are Coca Cola, Nike, banks such as Barclays, Uniliver and communication companies like Vodafone. The subsidiary companies work more independently though with close association with the parent companies. Therefore, the parent companies’ challenge of surveying the global market is simplified.
Technology and marketing
The internet has become a powerful marketing tool for many companies. Internet marketing has become even more popular with the introduction of social network sites like Facebook, Twitter and MySpace. In an Econsultancy report of 2010, it was revealed that 95% of companies have tried social network marketing (Beal, 2010). This simply means that almost all companies view the internet as a great platform to market their products. Sometimes in 2009, Dell, a computer manufacturer, announced that it had generated $ 3 million by using Twitter (Schiff, 2009). This means that the social networking marketing can indeed boost sales for any company.
The advancement in the ICT sector in the world has helped boost the marketing campaign of companies. This is especially true for cable television stations like CNN and BBC who have used this platform to reach audiences in far away continents. Although CNN is primarily American, it has experienced large viewership in Africa and Asia. This simply means that companies that advertize their products on such television stations not only reach audiences in the Americas but also the whole world. The penetration of Satellite television all over the world has great benefits to the marketers as they can now reach the global market at ease.
It is not uncommon these days to find people and companies using mobile barcode technology to give out information about their products. Physical images are encoded on the mobile barcodes. These images are then decoded by a reader which then displays the information input. This information can include marketing and advertising campaigns and the company’s website (Gaines, 2010). This technology has had tremendous results for companies that manufacture handsets, publishers in advertising their products. Mobile phone companies like Nokia, Samsung and LG have used this mode of advertising. Other companies include Toshiba and NEC (Brian, 2009).
Cases of different companies running almost an identical advertisement have arisen over the past year. For example, Safaricom, a Kenyan company partly owned by Vodafone, launched an advertisement that was deemed too similar to another advertisement ran by Qantas, an Australian firm. Since Safaricom ran its advertisement in 2010, it was claimed that it had copied Qantas’. This led to protestations from the latter although no legal action was taken (Mtaa, 2010).
Sometimes companies can advertise their products that many people may deem inappropriate and unethical. Therefore, before a company markets its products it should look at the moral implications of that advertisement. When Trojan Condoms launched its new version of teen condoms, it didn’t expect a backlash from the general public who saw it as a campaign solely meant to promote teenage sex. Teenage sex is always frowned upon in the society (Roseborough).
The racial implications of an advertisement can go a long way in determining how the advertized product will be bought by the public. For example, advertisements that suggest some kind of racism will not be well received, especially by the affected race. This is exactly what happened when Nivea launched an advert depicting a man (black) throwing the head of another black man with the message of re-civilization. The advert caused uproar in a world where race and racism are volatile issues (Prince).
Developing a new product and introducing it into the market brings forth a lot of challenges. Therefore, a company has to be properly prepared for all the stages. While developing a good product is very essential, the marketing aspect of the product has to be outstanding.