New Products Review the process for development of new products. Analyze why most new products fail. Below is an example from a peer: According to Mullins and Walker (2010), introducing new products is a risky business because more than half usually fail. They do not fail due to technical reasons; they fail due to the simple fact that not enough consumers are interested in purchasing the product (p 262). In order to avoid this situation, organizations must remember that when developing a new product they ensure that an adequate understanding of customer needs, preferences, and requirements is developed. Once marketers have gained the understanding they feel is necessary to pursue the introduction of a new product they feel will appeal to consumers, marketers follow a process for new product development that will better exploit the new product, and at the same time reduce the risks of failure. It is discussed by Mullins and Walker that the process development for managing new product development is called a stage-gate system which consists of 5 stages starting from idea generation all the way to product launch (p 265). It is further discussed that the new product has to be examined after completing each step before it can move on to the next step in the process; in doing so, ideas that lack market potential are stopped before too many resources are wasted to develop it further. The 5 gates are discussed: Gate 1: Idea Generation and Initial Screening Decisions ? idea, preliminary assessment to determine if the idea is a strategic fit with company?s mission Gate 2: Secondary Screening Decisions - detailed investigation (business case preparation) to kill any weak ideas before wasting significant amount of resources Gate 3: Decisions on the Business Case ? investigation is completed which includes a comprehensive customer, market, and competitive analysis; along with primary research. This stage is the last chance to stop before proceeding with full-scale development. Gate 4: Post-development Review Decisions ? product design and specific product features are decided, pricing and channels are determined, along with brand name, packaging, and a planned marketing communications program. Any additional marketing research is done at this stage as well. Gate 5: Pre-commercialization Business Analysis ? product must pass in a test market (p 267-269) Mullins, J. W., Walker, Jr., O. C. (2010). Marketing management: A strategic decision making approach (7th ed.). Boston: McGraw-Hill Irwin.
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