Chapter 11, Problem 1LO

Summary Introduction

To discuss: The significance of developing new products and six classifications of new products.

A product can be defined as a thing that could be provided in the market for acquisition, attention, consumption, or for utilization, which may satisfy a need or a want.

The process of developing a new product to the market is known as new product development. The company might engage in the development of new product due to increasing competition, update in technology, or change in customer preferences.

Explanation of Solution

The significance of developing new products is as follows:

New products are essential to increase profits and revenue, replace outdated items, and sustain growth. Few companies spend huge money every year for developing a new product. The term “new product” varies widely because a product can be new to the seller or manufacturer, to the world, to the market or few combinations of these.

The six classifications of new products are as follows:

• Discontinuous innovations.
• Adding to present product lines.
• Revision or improvement of current products.
• New product lines
• Lower priced products
• Repositioned products.