Challenges a New Product Manager Faces within Developing New Products or Services - Assignment Example

Question Identify three challenges a new product manager may be faced with in developing new products or services. Discuss ways you would cope withthese challenges if you were in the new product manager’s position. A. Not enough time One of the challenges that a new product development manager will face include not having enough time to develop a new product. Insufficient time becomes a possible challenge when the length of time to develop a new product will not catch up with the launch of a new product based on a marketing intelligence report. Because the time frame of the project is dependent on the markets expectations and changing preferences, to introduce a new idea, the company should look at time as a scarce resource. What the new product development manager can do is to look at the whole process and see what to cut down without compromising the quality of the product. For instance, if the new product entails smaller risk, the test marketing can be done on a smaller and shorter scale so as to cut down on time to deliver the product to the market without cutting down on the value that will be provided to the consumer. Also, the new product development manager can utilize simultaneous product development which utilized cross-functional planning. This will cut down on the time it takes to pass on from one process to another because all the involved functions will be part of the planning process. The new product development manager can significantly cut down on time it takes from idea generation to launching the product to the market. B. Not enough budget For new product development, financial budget is one of the crucial factors that can determine the success of a new project. As new projects in terms of overall research throughout the process can be costly, not enough budget is one of the challenges that a new product development manager can experience. It is very usual that the whole project has an initial budget as included by the company. However, since these are new projects that are supported by new technology, those budgets are usually the best estimates of those who are involved. Midway through the project, the new product development manager will learn that the costs are significantly different from the estimates, and that the budget that has initially been set, usually by the top management is insufficient. Due to certain management policies and corporate politics, revision and application for a new budget to be approved is usually a problem. Thus, a new product manager could be left with what was initially planned, and decide to pursue or abandon the project in the process. In order to address the problem of not having enough budget, the new product manager can look at the overall process and look for ways in order to cut down costs without compromising research or neglecting one of the crucial processes of new product development. For example, apart from technological feasibility, the bulk of the costs in the NPD processes include the high market research costs for business analysis as well as test marketing. Recent innovations have enabled marketers to gain insights from consumers in a less costly manner. These can be utilized by the new product development manager without sacrificing the quality of the research. For example, the company can utilize qualitative research method in contrast to more costly quantitative methods in order to gain insights from consumers. An emerging trend in consumer research being called as Method marketing where marketers probe consumers by putting themselves in the consumers shoes in order to understand them better. This is less costly than surveys, although needs a great deal of caution. Also, alternatives to formal surveys such as online surveys can significantly cut down the cost of marketing research, although, of course, there are issues and disadvantages to be weighed and be considered. Another significant cost in new product development is test marketing. As companies employ test market over a given area, significant investment is necessary. If the product fails in the test market, the company has to go back to where it has started. This is indeed very costly. During these days when interaction with consumers has become easier with the advancement of technology, consumers now are considered as co-creator of values rather than the passive group being the companys target market. Instead of employing test market in the process, the new product development manager can involve the consumers in the development of the new product by utilizing online communities and other methods to interact and involve the consumers in the production process. Of course, confidentiality is another issue. However, by involving the target market in the creation of value, the new product manager can see what the consumers want ahead, thus the success of the product, as well as gain insights for further improvements in the product. C. Not enough manpower Another challenge to a new product manager is having not enough manpower in order to pursue the project. Because the development of a new product within a company is usually done with the involvement of the different functions of the business, when there is not enough manpower to aid in one of the functions, the whole process can be hampered. This usually happens because of some specialized knowledge that is required along the process. For example, in business analysis marketing researchers are very much important in order to determine the feasibility of the idea as well as the success rate. If a company does not have enough manpower to conduct a marketing research to support the development of a new product, it becomes a major problem to the new product development manager. One of the ways the new product development manager can consider in order to solve this problem is to look for alternatives external to the company. These days with the emergence of specialized service companies, the new product manager can outsource some parts in the whole process of new product development. Of course, confidentiality is another issue. However, not having enough manpower, whether in the technological feasibility, or financial feasibility, test marketing or the commercialization phase of the process, the new product development manager can always find help from the outside world for a fair price. The new product development manager just have to make sure that she has sufficient budget to pay for these outsourced services. Question 2 Discuss reasons why a company may want to get a product to the market as quickly as possible. What are the dangers involved in rushing new products onto the market? Use examples to illustrate the points you are making. A. Reasons for rushing new product to the market i. First-mover advantage The major reason why companies want to rush a new product to the market is for them to get the first mover advantage. The first mover advantage is a marketing concept that says being a first mover in the market is virtually synonymous to owning that category in the market. Firms struggle to rush their new products in order to link the category to their name, the prime reward of the first mover advantage. Most of the market leaders in product categories are usually the first movers in the market. Take for instance Xerox, the first mover in the photocopying machine industry. Although more competitive rivals have emerged to challenge its position in the market over the years, Xerox has been able to enjoy the rewards in terms of the biggest market share over a certain period, and the recognition that it is first in its class, not because it is the best, but because it is the pioneer. When a company rushes a new product to the market, owning a category is also one of the reasons for striving to become the first mover. If a category is unowned yet, or no dominant player has been known yet, if a firm enters the industry and introduce its new product, the firm virtually owns the category. It would be easier for the firm to associate the its brand to the whole category—one strategy that is coined in marketing as preemptive. Because the company can associate its brand to the category, being the first mover as it strives to rush its new product to the market, little effort could be required in terms of building the brand—a tremendous cost saving where the benefits are huge: a significant market share can be captured in a shorter time. If a company fails to become the first mover, although it has a superior product over the one which got first, the company will experience far less glory than the first mover has received. ii. Market-skimming pricing Another reason why companies strive to rush their new products in the market is to get a chance to employ a market-skimming strategy for pricing. New products especially with a new and exclusive technology will be able to employ market skimming strategy in their pricing, thus, being able to benefit from the higher revenues from initial batch of sale. The rush for new products is most apparent in the consumer electronics industry where the pace of changes in technology to match the preferences of consumers are very fast. Companies struggle to introduce new products with all-new features in order to fight for market share One of these segments include the mobile phone industry. One of the mobile phone manufacturers employ this marketing skimming strategy in its pricing strategy. Nokia has employed this strategy over the years. The initial price of its newer mobile phones are usually expensive and tailors to the higher-end of the market. As the competition follows and competitors respond by offering more models, Nokia will introduce newer models with new technology and features. As it introduces newer but pioneer models in their subcategory because of their newer features, they can lower down the prices of their older models and attract more consumers. By this time, Nokia has already benefited from the higher prices that it charged to the higher-end consumers at initial introduction. B. Dangers of rushing new product to the market i. Compromising quality Compromising quality is one of the dangers of rushing a new product to the market. As companies struggle to be the first to market their products, they can compromise the quality, or at least come up with qualities that do not match the consumers expectations. Companies that usually employ this technique rationalize that they if they can get to the market first, they can modify the product and make a re-launch later on. However, this kind of thinking has a danger to it. Even when a company gets to be the first to enter the market and introduce the product by rushing, competitors will soon follow and consumers will soon find out that what they get is far from the best deal. This rush can backfire to the company; the goal of capturing a significant share in the market is to have a head start. The huge share in the market that is captured by being the first mover should be a step to build a solid customer base. If these customer shift to competitors as competitors have the better deal, the initial efforts of the company to get to market first would in turn worth less. ii. Little knowledge of the market can lead to failure As companies strive to rush the new product to the market, there is a huge possibility that there is some compromise in terms of the length and depth of market research to support the new products introduction. With a little knowledge of the market, the product can lead to failure in turn. The product may not cater most specifically to the consumers exact needs, or if it does the quality may not be sufficient. iii. Market readiness can be an issue Another issue in line with rushing new products to the market, and connected to little knowledge about the market due to haphazard market research is the overall readiness of the market. If the new product has a breakthrough technology, the market may not be completely ready to adopt it. Even if a company rushes the product to the market, without adequate education about the product and the new technology, the market may be reluctant to buy. This in turn may cause a product to fail at introduction. The technology may not be significant to the market for the time, which makes the technology irrelevant. Read More