A product is a multidimensional concept. It can be defined differently and can take many forms. Some dimensions will be tangible product features and other intangible. It is possible to label a product “new” merely by altering one of the dimensions such as packaging. Other dimensions include: brand name, quality specifications, price, features, technology and level of service.
Defining a new product
Newness is a relative term. Overwhelming majority of products are developments or variations on existing formats. Only 10 percent of new products introduced are new to both the market and the company i.e. innovative. Most new product activity ka devoted to improving existing products.
Different examples of newness:
- Changing performance capabilities
- Changing the application advice of the product
- Changing the after-sales service for the product
- Changing the promoted image of the product
- Changing the availability of the product
- Changing the price of the product
Classification of new products
The following classification identifies the commonly accepted categories of new product developments. In practice, 70 percent of new products are improvements, cost reductions and additions to existing lines.
New to the world products
These represent a small proportion of all new products introduced. They are the first of their kind and create a new market. They are inventions that usually contain a significant development in technology, such as new discovery, or manipulate existing technology in a very different way, leading to revolutionary new designs. Examples: Dyson’s vacuum cleaner, Apple’s iPad.
New product lines (new to the firm)
Although not new to the marketplace, these products are new to the particular company. They provide an opportunity for the company to enter an established market for the first time. For example: Google entered the smartphone market to compete with Apple and Samsung.
Additions to existing lines (line additions)
The company may have a line of products in the market, but the product is significantly different from the present product offering (but not so different that it is a new line). For example: HP colour printer was an addition to its established line of printers.
Improvements and revisions to existing products
These are new products and replacements of existing products in a firm’s product line. For example: HP’s printer has received numerous modifications over time and, with each revision, performance and reliability have been improved. Also, manufacturing cost reductions can be introduced, providing increased added value. This classification represents a significant proportion of all new product introductions.
This category offers no new benefits to the consumer other than possibly reduced costs. From the firm’s perspective, they may be significant. The ability to offer similar performance while reducing production costs provides enormous added-value potential. Indeed, frequently it is this category of new products that can produce the greatest financial rewards for the firm. Improved manufacturing process and the use of different materials are key contributing factors. The effect may be to reduce the number of moving parts or use more cost-effective materials. Cost reduction may not result in a product improvement,
These new products are the discovery of new applications for existing products. This has as much to do with consumer perception and branding as technical development. For example: aspirin was repositioned from an analgesic to an over-the-counter remedy for blood clots and one that may help to prevent strokes and heart attacks.
Trott, P., 2008. Innovation management and new product development. Pearson education.