Innovation and New Product Development Essay Example | Topics and Well Written Essays - 2500 words

Innovation and New Product Development - Essay Example New Product Development is defined as; 'the processes involved in getting a new product or service to market. The traditional product development cycle, the stage-gate model, embraces the conception, generation, analysis, development, testing, marketing, and commercialization of new products or services.'[5] New product development and innovation are an integral part of many companies. This is because the reason the existence of a company is to satisfy the needs of the consumer. As long as unfulfilled needs exist in the market; the company must strive to satisfy those needs by the introduction of new products and services. This area of a company has recently acquired much limelight and attention. This is because of two reasons. Firstly, due to technological changes, products are fast becoming obsolete and new products are required to be developed in order to take their place. Secondly; it has become easy for companies to replicate a new product offering. This is how me too products have increased in the market. The only protection from this is continual innovation and a commitment to change. There are three distinct categories of new products. The first category includes products that are truly innovative and hence unique; such as the computer, telephone and the zipper. The second category includes replacements that are significantly different from existing products and services in form, benefits and features. Notable examples include digital camera and contact lenses. Lastly, the third category comprises imitative products which are new to a particular company but not new to the market. In certain cases a company may just want to offer a 'me too' product to the consumer.[14] A new product strategy identifies the role a product is intended to play in satisfying company and marketing goals. For example; a product may be launched to protect market share, to create a new category or attain a specific return on investment. It may also be launched to maintain the company's reputation for innovation or social responsibility. This is what the strategy was for General Motors when it launched the EV1 electric vehicle. ' Although the EV1 may have helped General Motors rebut criticism about not being environmentally sensitive, it failed with respect to achieving sufficient sales'[15] In general there are six stages of the product development process. The first stage consists of generating new product ideas. Therefore organizations must encourage creativity and breakthrough thinking in their employees. These ideas can be generated through a number of different ways. These include long-range studies; whereby information on market trends and the use of the Delphi technique is used to discover new ideas. Another source of innovative ideas is the customer. Therefore many innovations come from listening to the customer about their unfulfilled needs or refinement in existing products that they would like to see. Brainstorming, gap analysis and dissecting competitive products are other sources of new ideas [2]. Certain new developments for product innovation have resulted in specific tools to generate new product ideas. These include. Examples are of Attribute Listing, Morphological Analysis and Matrix Analysis. They entail first examining all the attributes of an exist ing product.