Page 8 - DMGT508_PRODUCT_AND_BRAND_MANAGEMENT

Unit 1: Introduction to Product Management

assurance managers, user interface design engineers, marketers, financial personnel, graphic Notes
artists, etc.

1.2.2 New Product

The dynamics of markets, technology, and competition have brought changes to virtually every
market sector and have made new product development one of the most powerful business
activities. The monumental changes that constantly impact commerce have forced companies to
innovate with increasing speed, efficiency, and quality. In turn, this has made new product
development one of the most complex and difficult business functions. However, firms must
innovate in order to survive. The power of innovation is revealed in numerous studies, which
show that companies leading their industries attribute about half of their revenues to products
developed in the most recent five years. By comparison, companies at the bottom of their
industries achieve approximately one-tenth of their sales from new products. A new product can
be defined as a product that is new to the market.

Example: Sony introduced Walkman

GE introduced Light
HLL’s adult diapers, DEPEND, in Indian market.
There are five categories of new products.
1. New-to-the-world products or services are new inventions.

Example: In-line skates and health maintenance organizations.
2. New category entries are products or services that are new to a firm

Example: Sport utility vehicles
3. Additions to product lines add products or services to a firm’s current markets.

Example: When a powder laundry detergent offers a liquid version it is considered a
line extension.
4. Product improvements are another type of new product and are common to every product
category.

Example: Product improvement made in Lifebuoy Soaps (as shown through Figure
below)
Figure 1.1

5. Repositionings target products to new markets or for new uses.

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