NEW PRODUCT

NEW PRODUCT

DEFINITION OF A NEW PRODUCT

The importance of a new product development to a business entity is well organized.

Obote (1992), the survival and growth of companies; largely depend on the ability to maintain a versatile stream of product idea.

At each stage of the new products development process; search; screening; profit analysis, product development and commercialization described as the third stage which is profit analysis.

Charles D. Seleucia (1997); defines new product which indicated certain product characteristics such as:

1. Rapidity of consumption
2. Unit value of product
3. Frequency of purchases
4. Extend of usage number and variety of consumer and ways in which product provide utility (satisfaction)
5. Time and effort spent purchasing by consumers
6. Rate of technological change and fashion.

The significance of individual or group purchase to the consumer ranges from low to high and so on down the list.

 REASONS FOR NEW PRODUCT IN AN ORGANIZATION

The following include reasons for new product in an organization:

1. To replace obsolete (old fashion) products with new ones as a result of changing needs, wants and taste of consumers
2. To create an entirely new products through the introduction of new product into the market.
3. Addition of existing product; new products that Supplements Company’s established product.
4. Repositioning: this is the repositioning existing products that are targeted to new market or market structure.
5. Cost reduction: Introduction of new products that provide similar performance at lower cost.
6. To improve the revisions to existing products that provides performance of great perceived value and replace existing products.
7. To avoid risk of product falling victim to changing consumer needs and taste, new products technologies, shortened product life cycle and increased domestic and foreign competition.

REASONS FOR NEW PRODUCT FAILURE

There are several factors that lead to products failure. Some of these are:

1. Shortage of important new product ideas in certain areas.
2. Fragmented markets, keen competition is leading to increasingly fragmented markets.
3. Social and governmental constraints, new products have to satisfy public criteria such as consumer’s safety and ecological compatibility.
4. Capital shortage, many companies cannot afford to raise enough funds needed to research true innovations. They emphasized new products modifications and imitation instead.