Product management should be viewed form a broader perspective by business firms, in that, it has to include new product development as part of the action plan, apart from appraising the existing product line, positioning them effectively and taking brand decisions wisely. "Innovate or die', is the modern entrepreneurial slogan.
Unless organizations innovate and introduce new products, they cannot survive in the competitive market. Strategies defining the organization's future are built upon the portfolio of new products.
Need for new product development:
- People always welcome change and new product development is an opportunity for the firms to meet the changes in consumer demands.
- They are a source of competitive advantage. Your new product may infuse a fresh lease of life to your sagging profits.
- New products may turn out to be the star performers of your firm and provide long term financial return on your investment.
- Some firms take the smart strategic choice of using the idle capacity of their plant for manufacture of a new product that may utilize the existing production and operation resources to an optimum level.
- They capitalize on research and development. Products that create a wave are a result of research on market trend and consumer preference. Firms can make it, if their research is customer-centric rather than product-centric.
- They provide opportunities for reinforcing or changing strategic direction. It is wiser to discontinue production of a product that does not find acceptance and divest the funds in a beneficial venture.