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What Is the Importance of New Product Development?

Esther Ejim
By
Updated May 16, 2024
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The importance of new product development is a result of the necessity for developing new products if a business is to survive. In other words, new product development is tied to the ability of a business to remain competitive and also to the longevity of such a business. Any business that does not realize the importance of developing new products will not last very long as a consequence of the fact that business is all about innovation and change, making it absolutely necessary for businesses to adapt to those changes in order to remain relevant. New product development may be geared toward the conceptualization of a new idea regarding a completely new line of products currently not in the market, or it could be aimed toward upgrading products that may be in the market already. Whatever the case, the development of new products is an essential part of the application of business strategies by companies.

An illustration of the importance of new product development can be seen in the area of the transition from physical books to e-books. Some companies that built their reputation and even their entire company on the sale of physical books quickly folded due to the fact that they failed to realize the importance of new product development. These companies did not keep up with the changes in other areas of the market, such the innovations in technology that made it more convenient for people to download books onto a device rather than purchasing the physical book. Other companies that embraced new product development anticipated this change and not only made it possible for customers to download books from their Web sites, but also integrated this download with their own personal electronic readers, making it a complete package. This understanding of the importance of new product development has kept such companies relevant even in the face of constant innovations in technology and the tastes or preferences of customers.

Another illustration of the importance of new product development is in the area of smart phones where some companies have managed to establish themselves as market leaders due to the fact that they always take the lead in new products. Such companies always come up with new products periodically, astutely gauging when their products in the market are already reaching the end of their product lifecycle. By replacing worn-out products with new ones, they manage to retain the interest of customers and to make their product and company relevant.

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Esther Ejim
By Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and executive director of a charitable organization, she actively encourages the well-being of vulnerable populations through her compelling storytelling. Esther's writing draws from her diverse leadership roles, business experiences, and educational background, helping her to create impactful content.
Discussion Comments
By pastanaga — On Apr 03, 2013

@pleonasm - Well, it depends on the ethics of the company, I think. I suspect it also depends on their audacity. I mean, there have been plenty of companies which have tried to release a whole new product, only to have it completely fail because it was "too different" and consumers didn't like the change.

But at the same time, there are a lot of companies that will put real effort into developing new products. If there wasn't, we would never make any progress and we'd still be listening to the wireless and using typewriters.

By pleonasm — On Apr 02, 2013

@KoiwiGal - It's an interesting question actually. At what point do we consider the product to be new? If coke changes their recipe slightly, for example by using corn syrup rather than cane sugar, does that count as a new product?

If a company completely changes its branding, but doesn't change the product and markets it as "new", does that count as new product development? What about when a company only changes a couple of non-essential things about the product and sells it as new (like they often do with medication to bypass the patent laws)?

I think new product development is all about marketing in some ways. Often they aren't looking for a better product. They are looking for a better way to sell you the same product.

By KoiwiGal — On Apr 01, 2013

I disagree with this to some extent. Yes, there are certainly cases where new product development is necessary to keep a business afloat, and yes, books are a good case in point right now. Although I would argue in that case companies are going out of business more because they are unable to deliver the product as cheaply as their competitors, rather than because people no longer like physical books.

But there are definitely companies that never develop a new product and still survive. They might change their marketing, or change their method of delivery, but they don't change the product.

Esther Ejim
Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and...
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