Product Mortality Rates
Creating a successful new product has become increasingly difficult because the
number of new products hitting the market each year has increased dramatically,
and thousands of new household, grocery, and drugstore items are introduced
Because of lack of space and customer demand, about 9 out of 10 new products will
Speed to Market
The more rapidly a product moves from the laboratory to the marketplace, the more
likely it is to survive.
By introducing new products ahead of competitors, companies establish market
leadership, they become entrenched in the market before being challenged by newer
Speed to market is the strategy to introducing new products to respond quickly to
customer and/or market changes.
The Seven-Step Development Process
To increase their chances of developing a successful new product, many firms adopt
some variation on a basic seven-step process.
oProduct ideas. Product development begins with a search for ideas for new
products. The key is to actively seek out ideas and to reward those whose
ideas become successful products.
oScreening. This second stage is an attempt to eliminate all product ideas that
do not mesh with the firm’s abilities, expertise, or objectives.
oConcept testing. Once ideas have been culled, companies use market research
to solicit consumers’ input. In this way, firms can identify benefits that the
product must provide as well as an appropriate price level for the product.
oBusiness analysis. This stage involves developing an early comparison of costs
versus benefits for the proposed product. Preliminary sales projections are
compared with cost projections from finance and production. The aim is not to
determine precisely how much money the product will make but to see