New Product Development In View Of Marketing Research Essay Example
New product development (NPD) is a strategy applied by companies in order to survive the competition in the market. NPD projects entail the identification of the needs of the customer and carrying out market research. Marketing research is however, viewed as lacking in terms of providing consumer information in time for decision making. Most new products fail due to lack of understanding of what the consumers need and their preferences.
Marketing research entails the identification and assessment of new opportunities that lead to new product development. Companies have to be innovative to maintain a competitive edge over their competitors.Marketing research is very instrumental in the development of new products. It is however felt that research and development is more important than marketing in the process of new product development. Research and development tend to dominate marketing in the development of new products (Gima & Evangelista, 2000). Marketing is important in NPD especially if the information gathered is credible and reliable.
There are major changes in the business environment and all companies are working hard to stay competitive (Covin & Slevin, 1989). The decisions made by consumers regarding purchases are influenced by the efforts made by companies in the provision of products that meet the needs of the customers. Marketing research is crucial whenever managers are making decisions concerning customers and the development of new products (Johnson & Ambrose, 2009). Companies need to maintain a competitive advantage over other companies and therefore need to create new products or make changes to the existing products. Marketing research therefore, enables the companies to make informed decisions (McDaniel & Gates, 2012). The success of a new product is dependent on the knowledge and understanding of the needs and preferences of the customers. Most new products fail because marketing research is not employed.
A marketing research aids in decision making concerning issues to do with marketing. However, it does not guarantee that the correct decisions will be made. A marketing research project has various stages which need to be performed with high quality (Holger, Hoyer & Carsten, 2010). The execution of these stages will determine whether proper decisions will be made. Proper decision making leads to high profitability levels of the company. Marketing research enables the collection of useful information regarding the methods and designs of information collection; applies the process of collecting data; examines the results; and relays the results and their repercussions.
Marketing research comprises of various techniques, though the focus should not be shifted to these techniques. The main reason for marketing research is reducing the level of uncertainty and minimizing poor decision making. There are various areas that are important in marketing research and they include: testing a product or concept, the use of product service, advertising, evaluation of image, surveys carried out by the public, testing, market segmentation, feasibility of the market, the best location, study of the market share, market penetration, analysis of competition, studies on positioning and customer satisfaction (Song et al., 2006). The increased competition in the business environment brings about the need for a new product development to fight competition. NPD is crucial for a company to grow and survive. Companies need to be flexible because they face a dynamic business environment (McDaniel et al., 2012). NPD is one of the most important activities in a company and is also very risky. NPD is costly and if the right decisions are not made, the company may end up losing a lot of money. Marketing research therefore, acts as a very important tool that reduces the chances of NPD failure (Gima et al., 2000).
Success in new product development is achieved when contact is kept with the target audience all through the process of development. A lot of attention needs to be given to the needs of the customers so as to ensure that time in the market is saved, risk of product failure is lowered and the right investments are made. The NPD process has six stages which help in supporting the important decisions concerning the product (Holger et al., 2010). The six stages of the NPD process are unique and therefore, need to be structured in such a way that will enable meeting of the unique requirements of each stage. The information gathered from the market and customers is forwarded, improved and revised as the product concept shifts from one stage to another. The early stage of marketing research tends to be qualitative and puts emphasis on the creativity and interaction of the customer while the later stages of marketing research are more quantitative.
The framework of using marketing research helps in reducing uncertainty and possesses designs which are customized to adhere to the requirements of the new product. Marketing research helps in the identification of data and expected results because these are used in every stage of the new product development process. Marketing research enables gathering of data, processing of data and using the results found in making decisions to ensure the success of the new product. Marketing research works as a means of understanding the needs of the customers, watching the attitudes and habits while making evaluations of prototypes, concepts and products.
The NPD process involves stages which include: assembling knowledge; generation of business opportunities; generation of product concept; developing products prototypes; market testing and launching into the market (Holger et al., 2010). Marketing research helps in the generation of business opportunities through the evaluation of the ideas available. These ideas are screened and evaluated to come up with the best ideas that will lead to the profitability of the business. Feasibility studies are carried out to come up with business opportunities that will enable the company to have a competitive edge over the other companies. Marketing research enables the company to acquire knowledge on product differentiation, focus on certain needs of the customers and to be aware of the cost of the whole project. It is important for companies to acknowledge their strengths and weaknesses in terms of resources and thus not embark on the development of products that they cannot sustain.
A company is able to focus on a target market due to the information acquired through marketing research. The new product development requires that a company be focused on what it wants to supply to the customers. Customers have various needs and preferences and it is important for a company to select the needs to address. It is not possible for one company to satisfy all the needs of the customer. This may bring about confusion and lack of focus on the business objectives. Marketing research therefore, enables a company to decide on what customer needs to address so as to achieve maximum profitability (Johnson et al., 2009).
Product differentiation is an important tool in every company (Song et al., 2006). This is the attribute that makes a company’s product stand out among others. Marketing research enables a company to generate ideas on how to differentiate its products so as to gain a competitive edge over the products of the other companies. The new product development process will benefit more if a lot of information is gathered to enable the company make decisions that will differentiate its products in such a way that they are perceived as the best products. The uniqueness of the products and the ability of these products to satisfy the needs of the customers in a much better way than that of other competitors increase the demand for those products. Marketing research is therefore, an important tool in new product development because it enables the company to gain knowledge on the customers’ needs and enables the company to make important decisions regarding new product development.
In conclusion, marketing research is an important tool in the development of new products. This is because it enables the company to make important decisions based on the knowledge gathered concerning the needs and preferences of the customers. New product development relies heavily on marketing research because every company wants to develop products that have a high potential of selling. It is not a guarantee that marketing research will make a company profitable. This is because the business environment is dynamic and may change before the product has been fully developed thus lowering the demand for that product. The only way to ensure that new product development results in success is to perform intensive marketing research and gather a lot of information about the market. The marketing research should look at signs of future trends so as to enable a company make decisions to develop products that will sell even when the business environment changes. Marketing research should also enable the company to make decisions on dealing with copy cats especially regarding product differentiation.
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