What Is Development of a New Product? Definition of Development of a New Product, Development of a New Product Meaning and Concept
The development of a new product is the process in marketing and economics by which a company considers participating in a certain market through the inclusion in it of a novel good or service, or with a complete modification and / or update of a previous one.
The bases on which the product development process is based are the research and design of goods or services that satisfy and respond to the tastes and needs that each market raises.
A good or service could be considered as new one aimed at new consumer needs, or one that presents some substantial change in existing products, even making the above obsolete.
One of the most important aspects resides in the investigation and analysis of the market, attending to the possible opportunities that arise. Therefore, this development is considered to be the first stage in the life cycle of a product.
The development of a new product usually goes hand in hand with high costs and the need for cohesion between the departments of the company (marketing, strategic management and finance).
Protection and defense of companies in the development of a new product
Companies facing the development of new products face multiple problems such as copying, fraudulent imitation or industrial espionage. There are useful legal resources when it comes to preserving their rights, such as patents, intellectual property rights or the exclusivity provided by brands and logos.
Thus, research is encouraged, the taking of new business paths and the promotion of innovation for the future of its economic activity, favoring the variety and heterogeneity of the markets and the greatest amount of consumption possibilities.
Initiative of companies when developing new products
The model to follow is usually internal, through the inclusion in its templates of resources and departments of innovation and production. It is also possible that these derive through outsourcing this part of their activity if they do not have the necessary means or resources.
Third, the introduction of new goods or services into the product portfolio also often originates through the purchase of these, their production systems, or their patents or commercial exclusivity rights. This may respond to the need of firms to renew their catalogs, take advantage of new opportunities or market niches in their sector or a desire to change their company idea or brand image. In addition, there may be a reason to want to weaken your competitors. All of this is included in your marketing and business plan.
These development processes tend to have high costs and their success is not always guaranteed, which forces companies to have a high level of planning for various pre-tests, intensive marketing and advertising strategies and many other points to take into account from the strategic point of view.