216 Strategic Marketing: Planning and Controlmarket. Conversely, organisations may only make minor changes aimed
at ensuring the products remain up-to-date.
2 Product imitation: This strategy involves capitalising on the initiatives of
others and suits organisations that are risk averse and/or have limited
funds to invest. Clearly, there are potential ethical and legal problems
with this option and organisations must define the line between imita-
tion and copying. The strategy is most effective when the ‘new’ version
of the product brings some additional dimension of added value.
3 Product innovation: This involves bringing new and novel ideas to the
market place. Product innovation may be aimed at: (i) replacing exist-
ing products with new approaches and items which enhance customer
satisfaction or (ii) providing diversification in order to target opportu-
nities in new markets. Clearly, organisations should expect a correl-
ation between risk and diversification.
Booz, Allen and Hamilton (1982) classified ‘new’ products using the cat-
egories shown in Table 10.1. Again this demonstrates that truly original,
innovative products represent only a small proportion of total development.Table 10.1Type of ‘new’ product
Type of product development Nature
1 New world Often scientific or technical development. High risk/return
activities which can revolutionise or create markets.
2 New product lines or line Such products can be: (i) new to the provider as opposed to
additions the market place or (ii) be additions to the product ranges
already on offer.
3 Product revision Replacements and upgrades of existing products. This category
is likely to cover the largest single number of NPDs.
Additionally this may cover changes aimed at generating cost
reductions– no perceived change in performance but more
economic product/provision of the product.
4 Reposition Aiming to diversify away from existing markets by uncovering
new applications, uses or market segments for current products.
New product development process
Regardless of whether we are developing a ‘new to world’ product, a new
product line or simply aiming to reduce cost, we need a new product
development (NPD) process. All organisations require some mechanism,
or process, which enables ideas to be evaluated and, when appropriate,
translated into commercial products. Such a process provides a vital
ingredient in the fight for commercial success. Indeed, Davidson (1997)
sites lack of rigorous process as a factor commonly contributing to the fail-
ure of new products.