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New Product Requires Several Marketing Considerations. There Term Paper

¶ … new product requires several marketing considerations. There are many negative factors to product development that must be dealt with. There are also several factors that promote successful product development. Finally, product positioning and pricing are two important considerations. Negative Factors

One of the negative factors is uncertainty. This is especially true if the product is not only a new product for the organization but also a new product for the industry. One example that shows this is the computer software industry. The uncertainty is present because of its nature as a new and pioneering industry. The industry is rapidly changing and companies in the industry must be continually innovative and make decisions based on limited information. There is no certainty in this industry that a successful company will remain successful. To give an example, we can consider Apple-Macintosh. Apple-Macintosh had first-mover advantages as the first to develop a graphical user interface and their technology was ahead of Microsoft's, yet despite this Microsoft became the market leader. This is an example of how the maker of the best product is not necessarily the market leader in emerging industries (Burke, Condron, Conroy, Knol & Nolan.)

The second negative is the high cost of product development. The high cost means that organizations developing new products need to get a return on investment that justifies this high cost. The developer of a product has first-mover advantages, however, as other companies introduce similar products the developer company needs to maintain market share.

The final negative that must be countered is managerial ego. This managerial ego can create problems in two ways. Firstly the manager who started the product development project or who is in charge of it, may proceed with the project at all costs. For example, if accounting information shows that the product will not be financially viable, the manager may proceed anyway rather than accept that their project is unsuccessful. Another way that managerial ego creates problems is if the product is not as successful in the market as expected....

Managers may opt not to examine why or to make any changes to the product or the marketing strategy but to continue with the current strategy. This is an example of how managers can create problems if they refuse to be flexible and to accept that they are wrong.
Positive Factors

Effective product development puts the product as the central factor. It has been said that:

The product is the central focus of the marketing mix. If it fails to satisfy the needs of consumers, no amount of promotion, price-cutting, or distribution will persuade them to buy" (Ball & McCulloch 447).

The most effective product development strategies start with the product itself. Effective product development looks at the consumer and the market and develops a product to meet the consumer's needs. If this is done effectively, the product will basically sell itself.

The second positive factor is something common to companies with successful product development strategies. This factor is having a culture that supports innovation. 3M is one example of a company that bases their success on being innovative. 3M focuses on new products with the goal set that "30% of sales must come from products introduced in the past four years" (Daft 223). 3M's entire culture supports this, with all employees encouraged to be innovative and try new things.

The final positive factor is marketing research. Siropolis (80) says that marketing research is the most crucial step. Marketing is based on providing a product to customers, having knowledge of these customers is essential to this. If you know about your customers you know what product to provide them with and how to do it. This is important, firstly, in the initial development of the product. This development should not start with designing a product and then finding a market for it. Instead, the initial idea should be tested to find a market for it. Market research should then determine what features the product has. Market research should then also determine the entire marketing plan.

Product Positioning

Product positioning is how the product…

Sources used in this document:
Bibliography

Ball, D.A., McCulloch, W.H., International Business: The Challenge of Global Competition. Boston: McGraw Hill, 1999.

Bradmore, D., Joy, S., & Kimberley, C. Marketing Visions. New York: Prentice Hall, 1989.

Burke, R., Condron, I., Conroy, G., Knol, W., & Nolan, P., Strategy in emerging industries: Microsoft Corporation. http://www.bess.tcd.ie/foresight

Daft, R.L. Management. Fort Worth: The Dryden Press, 1998.
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