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01:03 LO 1: The Importance of New Products New product - a product new to the world, the market, the producer, the seller, or  some combination of these. New products are important to sustain growth, increase revenues and profits, and  replace obsolete items.  There are six categories of new products: 1. New-to-the-world products (also called discontinuous innovations): These  products create an entirely new market. New-to-the-world products represent  the smallest category of new products. 2. New product lines: These products, which the firm has not previously offered,  allow it to enter an established market.  3. Additions to existing product lines: This category includes new products that  supplement a firm’s established line.  4. Improvements or revisions of existing products: The “new and improved”  product may be significantly or slightly changed. 5. Repositioned products: These are existing products targeted at new markets  or market segments, or repositioned to change the current market’s  perception of the product. Sometimes repositioning is intended to boost sales  of a product with declining sales. 6. Lower-priced products: This category refers to products that provide  performance similar to competing brands at a lower price. LO 2: The New-Product Development Process The management consulting firm Booz Allen Hamilton has studied the new- product development process for more than thirty years. The firm has concluded that the companies most likely to succeed in developing  and introducing new products are those that take the following actions: Make the long-term commitment needed to support innovation and new- product development. Use a company-specific approach, driven by corporate objectives and  strategies, with a well-defined new-product strategy at its core. Capitalize on experience to achieve and maintain competitive advantage.
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Establish an environment- a management style, organizational structure, and  degree of top-management support- conductive to achieving company- specific new-product and corporate objectives. Most companies follow a formal seven-step new-product development process: 1. New-product strategy - a plan that links the new-product development  process with the objectives of the marketing department, the business unit,  and the corporation. o
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This note was uploaded on 03/10/2011 for the course MKT 3401 taught by Professor Jaber during the Fall '08 term at LSU.

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