In Silicon Valley, new product development is a way of life. Companies like Google, Amazon, Apple developed a reputation of innovators, bringing new products to the market more often than we need them. You barely get to know all the features of your new iPhone, when a new version is tempting you with a better camera, better screen, waterproof feature. Google is innovating in every imaginable direction: driverless cars, 2-hour delivery, efficiency apps, drones. Google X, a new product development laboratory, is a playground for techies, designers, builders with a constant drive to fascinate the consumer. Here is a short video on Google X (OPTIONAL)Google X (Links to an external site.)
From a marketing perspective, not all NEW products are new to the world. Many products are marketed as “New” when they have new features, new ingredients, new packaging or are repositioned to appeal to a new target market.
Ideas for New Product: Necessity is the Mother of Invention
Many products come to life because consumers have an unsatisfied need. Steve Jobs said: “Think of everything as broken” meaning everything in your life has the potential to be better: cars, phones, TVs, games, services (education, medical, legal). Think of the last time you traveled: planning, packing, boarding. Everything can be improved. Companies that operate in the travel industry think of ways to improve customer experience. As a result, we, the consumers, get new products like this:
Large, established corporations with steady revenue rely on Research and Development (R&D) to develop new products. Apple creates products consumers don’t even know they need. Did you think 5 years ago that you’d need/want a watch that could monitor your heart rate, keep you on track with exercise goals and notify you when your diabetic child’s sugar drops too low? In this case, developments in smart technology and personal electronics drive new product innovation.
Other companies rely on marketing research to learn about changing consumer preferences. Starbucks develops new products and services that make it easy and convenient for consumers to get a Starbuck’s coffee.
Mattel responds to changing consumer attitudes toward a woman’s body and image by introducing a new Barbie shaped in a way that resembles a “typical” woman.
A novel way to come up with product/service ideas is to ask the customers. Crowdsourcing is an invitation to the general public to participate in product development. Lego website hosts a page where any Lego builder can share their ideas for a Lego set.
Doritos crowdsourced ideas for the Super Bowl commercial. Tens of thousands of people submit their clips on social media. Doritos reviews, and with the help of social media followers, selects the ad that will be developed into the Super Bowl ad. The winner gets a prize: $1million cash and a job at Universal studios! Not bad for both sides.
Product Life Cycle
Developing a new product requires the investment of time and money. Once the product has been developed, the company’s goal is to prolong its life to recoup investment and earn a profit. How long will a product exist? It varies. Tabasco hot sauce has been on the market for over 140 years with virtually no modifications. Heinz ketchup has been around for 130 years. Meanwhile, some fashion items can only survive for a season. Product Life Cycle (PLC) is the course that a product’s sales and profits take over time. While it is hard to predict how long the cycle will last, there are distinct, predictable stages in the PLC that are common for most products: product development, introduction, growth, maturity, and decline.
Table 8.2 in your text summarizes PLC characteristics, objectives, and strategies. Here are some examples of products and services at each stage.
Introductory Stage: Google Express, Amazon Prime NOW, Amazon’s Echo.
Growth Stage: Apple Watch, Tablet PC, Tesla, Nest (smart thermostat), Uber.
Maturity Stage: DVD players, laptops, paper note pads, Pepsi, Coke Classic.
Decline Stage: typewriters, film cameras and film, photo developing service.
How fast a product will move through the Product Life Cycle depends on many factors: complexity, compatibility, relative advantage, observability, and trialability. If a product is easy to try, unique, inexpensive, and does not require special access, it spreads like wildfire and becomes a fad. Take a look at this NBC Nightly News report from May 5th, 2017 about fidget spinners – a new popular toy that quickly became a fad.Fidget Spinners (Links to an external site.)