Anderson_Literature_Review_Draft - Product Development...

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Product Development Literature Review David C Anderson Embry Riddle Aeronautical University January 28, 2016 Product Success The United States is a country that consumes products at such a rate that there are more shopping malls than high schools in the country. With this amount of consumption, a person could guess that any new product developed would be a success. However this assumption would be incorrect. The Harvard Business Review conducted a study and found “Less than 3% of new consumer packaged goods exceed first-year sales of $50 million—considered the benchmark of a highly successful launch”[Hal11]. The low success rate of new products cost companies large amounts of capital while also limiting resources for other product development. With this low rate of new product success, product development should be reviewed to see what
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areas can be improved to increase the success rate of new products entering the market. This is an important topic to investigate; finding and solving this problem could save companies releasing new products a large amount of capital that in turn could also reduce the cost of a product to the consumer. Literature Review There are numerous studies exploring product development challenges which can help understand areas of focus when considering improvements. Many feel that market research alone is adequate and product development does not play a major role if the product will become a success. This review evaluates numerous areas that lead to the success or failure of a product in the product development phase of production. Customer involvement. Consumers are the group that will utilize a product. A recent study noted “To avoid costly product failures, companies can integrate customers into the innovation process and ask for their commitment to purchase early on”[Oga06]. Many products that are created are great, but they do not appeal to consumers. Creating a product that is doomed to fail even if it has great purpose or functionality. Involving consumers in the product development process may influence the final design and indicate the desire for consumers to seek the new product.
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