product development

New Product Development

An important point to keep in mind when considering issues related to new product development is the fact that most "new products" are in fact "not new." Firms typically consider 1) New product lines (which other companies may already have), 2) continuous improvement to existing products, and 3) additions to product lines as "new products."

Two important concepts related to new product development are the "adoption" and "diffusion" processes. The adoption process involves the following steps: 1) awareness, 2) interest, 3) evaluation, 4) trial, and 5) adoption. The diffusion process divides the adopters into 1) innovators, 2) early adopters, 3) early majority, 4) late majority, and 5) laggers.

References:
[1] Doyle, "Marketing Management & Strategy"
[2] Chong, "International Marketing Study Guide -- U.London (External)"
[3] Drucker, "Innovation and Entrepreneurship"

Product Life Cycle (PLC)

The concept of product life cycle (PLC) is very prominent in the field of marketing. Briefly, the PLC concept relates the unit sales of a product versus time as the product goes through the different stages: 1) introduction, 2) growth, 3) maturity, and 4) decline. The theoretical curve of the unit sales vs time is S-shaped due to the nature of the diffusion and adoption of innovations. While the PLC concept is widely used, some marketing scholars have pointed out important practical limitations of the PLC concept (Doyle). These are:

-1. Undefined concept.
-2. No common curve shape (different products have different shapes).
-3. Unpredictable turning points
-4. Unclear implications
-5. No Exogenous (the turning points are typically due to internal management decisions as opposed to external market forces).
-6. Product oriented as opposed to customer oriented.

It is also important to note that the PLC does not apply well to brands.

References:
[1] Doyle, "Marketing Management & Strategy"
[2] Chong, "International Marketing Study Guide -- U.London (External)"
[3] Drucker, "Innovation and Entrepreneurship"
[4] Robergs, "Diffusion of Innovations"