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New Product DevelopmentTweet

Why develop new products for your business?

Every business needs to innovate to stay ahead of the competition. No business can continue to offer the same unchanged product, if they did so, profit would not be maximized and sales would start to fall.

Here we will look at some of the reasons why a company may introduce new products into its portfolio.

• Consumer needs may change, forcing the company to adapt with these changing needs. If we look at food sectors around the world, consumers are becoming more health conscious, forcing companies to introduce low sugar and fat versions of their existing brands. Coca Cola Zero is a classic example.

• The product maybe at the end of its life cycle, so the company may introduce new and improved updated versions. Microsoft has done this by moving from the Xbox to the Xbox 360.

• The product might be at the maturity stage of its life cycle and might just need to be re-modified to stimulate an increase in sales. Sony PlayStation have done this with the original PlayStation by offering a smaller version called PSOne, and a slim version of the PlayStation 2.

• There maybe environmental changes which the company may want to capitalise on. Music companies are now selling more music via downloads then through traditional shops, originally being forced to change the way they deliver their product by Napster.

• Competitors may force change. New products maybe introduced because of competitors.