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New product development

Where a business creates a new good or service, or modifies an existing good or service in line with changes in the market place. New goods or services may be: ‘new to the world’ – often based on scientific or technological developments and enable purchasers to do something that was previously not possible (eg the development of the video recorder in the 1960′s and early 1970′s), or provide purchasers with a more efficient or superior way of doing things, (eg the development of mobile phones or digital cameras); new to the business but not to the world – where a business produces their own version of a product developed and launched by another business, often a rival firm. If the product is very similar to the original product then it is referred to as a ‘me-too’ or ‘copycat’ product. Where the original inventor has patent protection on the product the originator can take legal action to prevent copying. In many cases, the original product is not protected and, therefore, it can be copied. In other cases, the business is able to make the new rival product sufficiently different so as not to generate legal action. It should be appreciated, however, that when we talk about ‘new product development’ (NPD), ‘new’ does not necessarily mean ‘brand new’ (to the world or the business), which often involves considerable investment and risk. It could simply involve modifying an existing product, for example, by: changing the material, ingredients, colour, adding a new feature, introducing a new size, improving the functional performance by making the product longer-lasting. All new products should essentially fulfil three basic criteria. They should be: Functionally sound – fit for purpose bought to satisfy; Aesthetically sound – visually appealing (depends on product and cost); Capable of economic production – able to make sufficient profit at a price the customer is able (and willing) to pay. There are a number of stages involved in new product development. These include: Identification of New Product Ideas / Idea Generation, Screening & Selection of New Product Ideas, Concept Development and Testing, Business Analysis, More Detailed Testing of the Product and Consumer Reaction, Technical Implementation, Full Launch. The process can be lengthy and time consuming, but this is usually justifiable and necessary, especially in the case of brand new products, given the investment and risk involved.

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