New product development has always been an essential part of the marketing of a firm. From research on customer preferences to product positioning and segmentation, forecasting and then testing, it has been widely used to have a deeper understanding of methods and use of information about the customer in the design, testing, launch, and management of new products.

Today, new challenges and opportunities have arisen due to globalization, global competition and the advent of new information and communication technologies such as electronic mail, the world-wide web and increased electronic bandwidth. Product development has now become a process where the inputs and results have a global reach making such products more complex to design and market. Competition demands product orientation towards customer needs, its fulfillment and customer satisfaction.

In the era of globalization, standardization of products for cost reduction does not payoff, as varied customer need set has to be satisfied. This emphasizes on the 3D's of marketing: Differentiate, Deliver and Delight

Customer satisfaction was the main focus in new product development until the early 1990's. Understanding the customer needs and designing the product accordingly was considered as the key to success. As the focus shifted on quality improvement, newer techniques such as statistical quality control, Kaizen etc found their importance leading to the conclusion that better quality product will sustain. Marketers then realized that an early entry in the market can be another factor of success.Thus the time of entry in a market and customer satisfaction both became the pillars of success.

Today, all of the above mentioned factors are visualized as an integrated model, supplementing each other for a successful new product development.

To successfully achieve the above trade offs, firms now emphasize equally on the marketing, engineering,organizational development and manufacturing. This is called as the End to End Product Development, wherein all factors are well visualized and controlled resulting into a product, which is best at satisfying the customer need and expectation at an affordable price, is easy and cheap to manufacture and is launched at the right time.

Competition is fierce than ever. Every organization now is in a pursuit to offer new products that satisfy the customer need. The speed with which new software products are launched in the market gives quite an idea of the competition. The product purchased today becomes outdated and obsolete in some time as newer and better products, which satisfies more needs are launched. The market competition responds on your competitive positioning. Microsoft Windows is used by maximum people as the primary Operating System, even when newer Operating systems exist, serving better. (Linux, free distribution)

Technology drives competition.New technology use in research, product design, manufacturing and development makes the process faster and as desired. Technology serves human needs better.Banks with a wide network of ATM's are easily accepted to the customer today,as against the factor of branch proximity which governed banking transactions before the start of Internet banking and ATM era.

Economics of design, development and marketing plays an important role in the new product development. Research and Development shares a major cost in new product development, especially in Pharmaceuticals and technology intensive products. The design of the product has to be in accordance to the research statistics, i.e. as per the customer requirements. Efficient design not only helps in qualitative manufacturing but also saves cost. Short and long-term profit needs to be analyzed and the pricing of the product has to be determined accordingly. The sales of personal computers increased manifolds, when technologically superior product became readily available at cheaper price, satisfying the customer need.

A product is developed essentially for satisfying the need of the customer. The customer's need has to be analyzed, sorted and arranged in priorities. Concepts of design are formulated, tested and the product given a shape. This is now subjected to the test market where the research, design, manufacturing, pricing and marketing is analyzed by the customer. Such test results may bring changes in the structure and marketing of the product.

No product can be successfully marketed without a sound channel of distribution. The distribution channel is the media through which product reaches the desired consumer from the production unit.The timely and adequate supply of a product is essential to sustain in the market. A new product, however appealing it might look in advertisements, will not sell if the channel is inappropriate. When the cola majors launch a new flavor, the customer can find it on the shelf through out because of efficient supply chain management.

Management though an internal factor, has the crux of all external forces. Efficient and effective application of the external forces depends on the management. If properly taken care of, the new product developed will be a accepted by he consumer else all resources go waste.

(Source: Articlesbase)

* The author of this article is a freelance writer.
* The views expressed by the author in this feature are entirely his/her own and do not necessarily reflect the views of SME Times.