Core Concepts of Marketing

PRODUCTPLANNINGANDSTRATEGYFOR~.'1ULATION 171

TheFirm'sViewpoint Classifyingproductsintennsoftheirnewnessfromtheper-
spectiveofthemanufacturerisalsoimportant.Thereareseverallevelsofpossible newness
thatcanbederivedthroughchangeseitherinproduction,marketing,orsome combination
ofboth.
Basedona schemadevelopedbyEberhardScheuing,newproducts,fromtheper-
spectiveofthebusiness,cantakethefollowingforms: 11

1. Changingthemarketingmix:onecanarguethatwheneversomee;ementofthe
   marketingmix(productplanning,pricing,branding,channelsofdislribution,adver-
   tising, etc.)ismodified,a newproductemerges.


2. Modification:certainfeatures(norn1allyproductdesign)ofanexistingproduct
   arealtered,andmayincludeexternalchanges,technologicalimprovements, ornew
   areasofapplicability.


3. Differentiation:withinoneproductline,variationsoftheexistingproductsare
   added.


4. Diversification:theadditionofnewproductlinesforotherapplications.
   Afinalconsiderationindefining"new"isthelegalrulingprovidedbytheFederal
   TradeCommission.Sincethetennissoprevalentinproduclpromotion,theFTCfelto~liged
   tolimittheusecf"new"toproductsthatareentirelynewor changedinafunctionallysig-
   nificantorsubstantialrespect.Moreover,theteoncanbeusedfora six-monthperiodof
   time.Giver'thelimiteduniquenessofmostnewproducts,thisrulingappearsreasonable.

Strt:JtegiesforAcquiringN ewProducts
Mostlargeandmedium-sizedfilmsarediversified,operatingindifferentbusiness fields.
It wouldbeunrea~istictoassumethattheindividualfirmis eithercapableorwillingtodevelop
allnewproductsinternally.Infact,mostcompaniessimultaneouslyemploybothinternal
andexternalsourcesfornewproducts.Bothareimportanttothesuccessofa business.^12

InternalSources Mostmajorcorporationsconductresearchanddevelopmentto

someextent.However, veryfewcompaniesmakeexclusiveuseoftheirowninternalR&D.

On::hecontrary,manycompaniesmakeexcellentuseofspecialiststosupplementtheirown

capabilities. Still,todependextensivelyuponoutsideagenciesforsuccessistoOlDa busi-

nessontheblinkofperil.Ideally,theclosertherelationshipbetweenthenewbusinessand

existingproductlines,thebettertheutilizationofR&Dwillbe.TheNationalScienceFoun-

dation(N::;F)(1957-77)dividesR&Dintothreeparts:

1. Basicresearch:originalinvestigations fortheadvancementofscientific knowl-
   edgethatdonothavespecificcommercialobjectives,althoughtheymaybein
   fieldsofpresentorpotentialinteresttothereportingcompany


2. Appliedresearch:directed towardpracticalapplicationsofknowledge,specific
   endsconcerningproductsandprocesses


3. Development:thesystematicuseofscient~ficknowledgedirectedtowardthepro-
   ductionofusefulmaterials,devices,systems,ormethods,includingdesignand
   developmentofprototypesandprocesses

External Sources Externalapproaches tonewproductdevelopmentrange fromthe

acquisitionofentirebusinessestotheacquisitionofa singlecomponentneededfortheinter-

nalnewproductdevelopmenteffortofthefinn.Thefollowingexternalsourcesfornew

productsareavailable tomostfirms.