New products have three forms
- New to the world – this is a truly unique product that is there is no other product like that in the market.
- Improvement /revision to the existing products. These are products that are significantly different from existing goods in that they provide improved performance.
- Imitative products – they are new to a particular company but not new to the world. e.g. Sony and not Sonny or additions instead of addidas.
A company would develop a new product for the following reasons.
- To improve the quality of its products
- To meet the pressure of competition. I.e. defend market share position e.g. KBL developed new products when it realized it was facing competition from castle.
- To utilize excess capacity if the company has excess machines, capital, manpower, raw material etc.
- To sustain the company growth once a product has reached the maturity stage.
- To respond to environmental force-produce products that is environmental friendly.
- To respond to new technology.
- To establish a position in a new market e.g. equity bank, equitel.
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