New products are at the heart of any integrated marketing strategy. Even the best executed marketing campaign will not compensate for poor products or products that the market does not want.
So the first stage of any new product programme is research. Initially there may be dozens, perhaps even hundreds of ideas to sift and evaluate, but new products will most likely arise from one of three key drivers:-
- · Technology
- · Market Need
- · Price
Whilst market input is important, it’s not likely to result in any real progress in understanding what to develop. As one commentator remarked, ‘you don’t know, what you don’t know’.
The lack of imagination conditioned by the existing supply chain through to the end user, will deliver a verdict which can be summarised as ‘more of the same, plus a few ‘bells and whistles’ that the competitors offer on their product - and all delivered at a lower price’.
Technology, not surprisingly is a critical driver, either applied to the product itself or to the process of manufacture, or a combination of both. But basing new product development on a new technology platform can be a high-risk strategy unless relevant to the target audience. New technology for its own sake will not succeed unless it also fulfills a market need that the customers are willingly to pay for. But failure to recognise the value of new technology or adopt too late can be equally disastrous. Sometimes the technology is a good idea in search of a genuine user application. The key factor is an ability to bridge the gap between the possibilities afforded by adoption of the technology and the implementation and acceptance by the market.
Finally price can be the driver for a successful new product, but to achieve this will generally require having a lower cost-manufacturing base than any of your competitors. This may be achieved through entry barriers to the market such as high level of investment in plant, or patent controls that are beyond the reach of your competitors and will usually also need to be accompanied by high volumes and a dominant market share.