2021/08/011Chapter 09Developing andmanaging productsIntroductionNew product developmentmay be done:•todevelopan item tocompete with a particularproduct/service or•may be done toimprovean alreadyestablishedproduct.New product developmentis essential to anybusinessthat must keep up withmarket trendsandchanges.News.discovery.comThe importance of new productsTo realise growth and profitability objectivesA firm’s products can be in various phases of the product life cycle and will thereforecontribute differently to the overall profit and growth objectives of the firm. When the existingproduct mix does not meet these objectives, new products need to be introduced.To replace declining productsThe product life cycle (PLC) of products tends to become shorter and shorter and requires newproducts to replace them. The failure to replace products, brands or models in a productrange whose sales are declining can have a serious impact on a firm’s financial position.Product obsolescenceNew technology can make a firm’s products obsolete.New products have to be developed to remain competitiveCompetitive pressures often shape marketers’ new product strategies. Certain ingredientscould become standard and if a firm doesn’t include it in the product, consumers will purchasethe competitor’s product.Changing consumer needs open up opportunities for new productsIt often happens that a new ‘primary’ product leads to new needs and wants for ‘secondary’products.Typical reasons why new products are important for firms:Categories of New ProductsNew-to-the-WorldNew Product LinesProduct Line AdditionsImprovements/RevisionsRepositioned ProductsLower-priced ProductsSixCategoriesofNewProductsoNew-to-the-world products(Discontinuous innovations)Are products that areintroduced in an original formThese products create andentirely new marketoNew product linesAre products that the firm hasnot offered in the past butthat will be introduced into anestablished marketoAdditions to existing productlinesAre new products thatsupplement a firm’sestablished lineComplementary products canalso supplement a firm’sofferingsoImprovements or revisions ofexisting productsAre usually minor changesthat may entail addition ordeletion of ingredientsMany of these products arelabeled “new andimproved”oRepositioned productsAre existing productstargeted at new markets ormarket segmentsoLower-priced productsAre those that providesimilar performance tocompeting brands at alower costLower cost may result fromtechnological advantages,economies of scale inproduction, or lowermarketing costs=+
2021/08/012Practical exercise aboutcategories of new productsLook at the following slides and decide which category the product belongsto…The Moovie - PeugeotPeugeot Design Contestan opportunity for a young designer withvision to bypass everything on the way toglobal acclaimthe winner received significant prizes andthe ultimate reward was to have theirconcept produced as a working vehicleand featured on the Peugeot stand at theworld’s premier motor show (that year theFrankfurt Show)The third Peugeot Design Contest sawAndré Costa carry off the first prize for hisoutrageous two-seater electric conceptcar, the MoovieThe reason behind the big wheels: the
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