New Product Development Strategy

There are several reasons why new products are developed.
These include:

i.    New products may help an organization remain competitive. That there is competition over available shelf- space at the retail outlets (e.g. Uchumi Supermarket) is true. Holding other factors constant, the firm with more brands or products tends to be allocated more shelf-space than ones with fewer brands.

ii.    A new product may be introduced to utilize excess production capacity. If a new product can be profitably introduced to utilize excess capacity, then the organization should do it.

iii.    Sometimes company growth can only be sustained through the development of new products. This is because products have a life cycle. Products that are profitable today, may be dead tomorrow and therefore, whenever feasible, new products should be introduced if the firm is to continue growing.

iv.    In some situations new customer needs may only be satisfied by new products. Human needs change over time as a result of changes in the environment.