New products has three forms.

  1. New to the world-this is a truly unique product that is there is no other product like that in the market.
  2. Improvement /revision to the existing products. this are products that are significantly different from existing goods in that they provide improved performance.
  3. Imitative products-they are new to a particular company but not new to the sqny and not sony or addidias instead of addidas.

A company would develop a new product for the following reasons.

  1. To improve the quality of its products
  2. To meet the pressure of competition. Ie defend market share position e.g. KBL developed new products when it realized it was facing competition from castle.

To utilize excess capacity if the company has excess machines, capital, manpower, raw material etc.

  1. To sustain the company growth once a product has reached the maturity stage.
  2. To respond to environmental force-produce products that are environmental friendly.
  3. To respond to new technology.
  • To establish a position in a new market e.g. equity bank –equitel.



This is the creation of ideas .the ideas can be generated from;

  1. Customers ie
  2. Customer ways-this is where you ask customers their need and wants which are not being met.
  3. Focused group discussions-this is where you get a group of customers and introduce a topic to them.the fact will be towards their needs and lifestyle.
  • Suggestion boxes or complaint letters from customers.
  1. Mails sent
  2. Telephone calls
  3. Projected lists.
  4. Company laboratories-when marketers are conducting experiments they may get an idea ie they may make discoveries by chance coming up with good ideas about a product.
  5. Competitors-ask competitors what they like about competitors products.also buy the products yourself,analyse it and then make a better product.
  6. Sales representatives and middlemen-because there is constant touch with customers,they can provide first hand information about customers needs and their complaints.
  7. Marketing research firms-they are consultants who find out and tell you what is wrong with your product and possibilities of new ideas in the market.

Sloot and drop poor ideas as early as tries to reduce the number of ideas to one attractive practical improving ideas and screening items the company should avoid;

  1. Drop errors-occurs when a company drops a good idea.
  2. Go errors-occurs when a company permits a poor idea to move to other development is very important for one to screen the ideas because the product development costs rise substantially with each successive stage.


  1. The existing or potential demand for the products-are there sufficient number of people in the market and do they have purchasing power?.
  2. The marketing compatibility-this is the extent to which the proposed product matches with the existing marketing variables.
  3. The environment and social standard compatibility-this is the extent the proposed new product harmonizes with the environment and social standards.
  4. Durability-this is the expected life cycle of the product.
  5. The long term expected sales growth-this is the extent to which the new product will generate profits for the company.
  6. Technical capability-this is the degree to which the proposed product matches with the existing production facilities e.g. time management to handle the product

A company should evaluate the business attractiveness of the proposal and it is looked at from the point of view of sales,costs  involved and the profits you expect to makes use of forecasting techniques which include use of historical data of similar products or through customer always in order to find out buyer intentions.


This is where a company answers the question whether the product idea can be translated to a technically and commercially feasible is the stage of making the idea concrete(reality).the research and development develops a prototype(model) that satisfies the following criteria.

  1. consumers see it as having the desired attributes.
  2. It perfoms safely under normal use and conditions.the model can be produced with the budgeted manufacturing costs.
  3. Must pass the funs size,shape,taste and scope.
  4. The company must choose a brand name in this stage and should be in the package.


This involves testing the product to learn how customers and ideas react to its use,handling and purchasing the actual product. First, one selects a representative sample of consumers using probability and non probability techniques. The specific towns and markets are then visited. The length/duration of the test is the next step where the period that one carries the trial test is determined. How the product functions and how many people are buying or trying frequency of purchase and overall attitude towards the product is essential. Finally decide on the action to be taken based on the tested results.


This is the final stage in which a company makes a final decision to launch the new product in market. A company can decide to launch a product by;

  1. Roll out introduction-this involves starting with a few towns when introducing to its entire country with time.
  2. Crash introduction-here, one introduces the product into the national level market at once ie the product is available country wide. A company has also to decide the time of the launch e.g. text book can be launched at the beginning of the year. The launching can be single, locational, international, national or regional. Market testing gives the management enough information to make a final decision about whether to launch a new product. When commercializing a new product, the following factors have to be taken into account:
  3. When (timing)
  4. Where (Geographical strategy)
  5. To whom (target market prospects)
  6. How (introductory market strategy)


  • Inappropriate promotion being used.
  • Stiff competition from the competitors.
  • Highly priced commodities.
  • Poor quality products.
  • When the new product has not penetrated in the market fully.
  • When the new product fails to meet the customers specifications.
  • When the frequency of use is minimal e.g. stamps
  • When the product have already reached decline stage.


  1. Core benefit – The fundamental service or benefit that the customer is really buying.
  2. Basic products – Is the physical/ tangible product
  3. Expected product – Set of attributes and conditions that buyers normally expect and agree to when they purchase a product.
  4. Augmented product – This is what customers desire beyond their expectations e.g. warranty,repair services,toll free help no etc.
  5. Potential product – This encompasses all the augmentations and transformations that the products might ultimately undergo in the future.
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