Digital Marketing

The nature of products and product development

As stated above, products must be considered in terms of the total product offering. Remember, the term ‘product’ covers goods, services, ideas and information. In reality, most products are combinations of these items. Service-based products tend to be intangible in nature. Above all, products must meet needs and deliver benefits to the user.

Product development strategy

There is much debate relating to product development strategies. For example, how is the term ‘new product’ defined? The reality is that few products are new in the sense of being innovative, unique or novel. Most ‘new’ products are updates and revamp of existing goods and services. Jain (1997) views new product strategy in terms of three categories

New product development process

Regardless of whether we are developing a ‘new to world’ product, a new product line or simply aiming to reduce cost, we need a new product development (NPD) process. All organisations require some mechanism, or process, which enables ideas to be evaluated and, when appropriate, translated into commercial products. Such a process provides a vital ingredient in the fight for commercial success. Indeed, Davidson (1997) sites lack of rigorous process as a factor commonly contributing to the failure of new products.

Why do products fail?

It is reasonable to suggest that an understanding of the pitfalls of product development can help us to avoid them. When addressing this question, managers need to consider the nature and background to NPD, as some types of development activity are inherently more risky than others. Additionally, the organisation attitude to risk and investment has a baring on the situation.

Managing innovation

The term ‘innovation’ means different things to different people, with common definitions relating to scientific advance and the development of high-technology products. However, the reality is that innovation is a far broader activity. Essentially, innovation is about changing established products, processes and practices. Innovation must blend creativity, clear thinking and the ability to get things done into one process. Ultimately, the market place will judge innovation. New ideas need support, commitment and resources, if they are to be effectively implemented.

Risk and the innovation dilemma

Inevitably, conflict between innovation and operational efficiency will occur. All organisations need to develop new ideas and translate such ideas into new products, if they are to remain competitive. Equally, organisations require stable and efficient day-to-day operations in order to accomplish basic tasks effectively. Indeed, many views of management, and management techniques, tend to focus on eliminating waste, reducing cost and optimising the use of assets. Figure 10.4 illustrates the principle.

Dell computers: product recall Product recalls

can easily turn into a crisis which can damage an entire brand. However, with careful handling and appropriate responses the effect of recalls can be minimised. Dell faced a product recall in 2006, when it announced the voluntary recall of over 4 million Dell branded batteries. The batteries were sold as part of/in support of the company’s notebook computer range. Although very rare, the product posed a potential fire risk. This was dramatically illustrated by media coverage of a notebook product busting into flames. Consider, how an organisation can reduce the negative aspects of product recall, and what role does the Internet play in product recall?

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