Disadvantages of product development strategies

Burlington: Ashgate Publishing Company. The first of these, market penetration, combines existing products and existing markets. Conclusion The Ansoff Matrix, first introduced inis a useful tool for businesses to use when analysing different strategies in relation to its products and markets.

Importance of product development

Using the strategy of market development Arm and Hammer was able to attract a new customer set for its baking soda product Christensen et. London: Routledge. While the risk is said to be moderate, this can still prove to be an unsuccessful strategy for many organisations. Expansion and contraction of product mix. Testing the product in the market before launch can also reduce risk. For example, attractive product design draws more customers towards your product. It increases profit earning possibilities of the organization. Market penetration focuses on retaining existing customers and this strategy is cheaper than attracting new ones. Discontinuation of unprofitable product.

New product development is expensive and time consuming. Another drawback is that it can take you away from focusing on putting out quality products and services.

Why use product development strategy

For example, how you will price the product and the quality of it. There must be a consistent performance in meeting consumer value expectations and accurate benchmarks must be set to make this happen. A product market and development strategy can be expensive, especially if you are thorough and invest in processes such as market research and advertising. Your product development strategy must encompass all the issues of offering something new to the market, from testing ideas to financing marketing for new target audiences. To discover the feasibility of the production of product. Features - What features will you add to increase the benefits offered to your target market? Advantages of Product Development Strategy Keeping pace. While the risk is said to be moderate, this can still prove to be an unsuccessful strategy for many organisations. It helps in expanding the market for the products. As consumer tastes and interests evolve, a product development strategy can help your business leverage opportunities to market to these new preferences. Mercer, D. This strategy is seen as having moderate risk due to the fact that a company will be trying to enter into new markets. This strategy can be achieved through several different options including: new geographical markets, new distribution channels, different pricing policies, or new product dimensions Proctor,

Cost Conducting a market research for a new product can be costly. The company continues to maintain a reputation as a product innovator. An example of forward diversification happens when a photographer starts offering picture framing Hitt et.

product development strategy

Even with thousands of hours of testing, it is possible for a product to fail unexpectedly. To ensure that your research stays relevant, you need to constantly monitor changing market conditions and update your data accordingly.

External sources can change procedures, which can alter your product development. This will also include the reactions from the target markets and product positioning to evaluate if there's demand from the market.

Risks of product development

The company uses an existing product, namely air travel, and offers this product in an existing market, namely flights for the small distance cities. Another advantage of this is that you can develop a reputation for providing quality products in the marketplace. Advantages of Product Development Strategy Keeping pace. Manufacturing materials may decline in quality. Virgin Media has been successful in offering new products in the travel and mobile phone markets. It is also used a tool for companies to differentiate itself from their competitors. The success or failure of all the marketing efforts depends upon its price determination. New product development is expensive and time consuming. New ideas help to create new products. Market penetration is considered to be a low risk strategy as it utilises existing products in existing markets. Leverage the resources available to you, such as marketing information and demographic data.
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The Ansoff Matrix