What CHALLENGES does a company face in developing new products and services?
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What CHALLENGES does a company face in
developing new products and services?
Challenges
Global CompetitionTimeMarket PotentialTechnological Change
DistributionMarket SizePricePromotion
Global Competition
To anticipate the competition globally in launching the new product.
Mahindra and Mahindra launch its first SUV Bolero in
2000 and then Scorpio 2 years later , a model that was affordable and made M&M ahead of its rivals.
Time Louis Vuitton implemented a new factory format dubbed Pegase so it could ship fresh collections to its boutiques every six weeks – more than twice as frequently as in the past.
Market Potential
To sell your product either:•Make your product superior Or•Retain your leadership in the market.
Facebook acquired Instagram for $1 billion as soon as it saw, it can become its competitor
one day and prevented it to get acquired by other of its rivals.
Technological change
Technology advances everyday. Hence, it’s very difficult for the developers to choose a technology and invest in it which may become obsolete in a short duration.
Every time apple proves that innovation is the ultimate success of new product. Starting from its first Macintosh to the iPod, iPad, iPhone, and the list is still growing.
Distribution
Who is going to sell the product?
Can you use the same distribution channels you currently use?
Can you use the same independent representatives or sales force?
Market Size
How much of your product will be sold?
Depends totally on market size acquired by the product.
Segway says “If you build it, they will come.”
May be not publicly acclaimed, Segway sold these machines after determining its Market size to police forces, urban tour guides and warehouse companies.
PriceWhat price to set keeping both
CONSUMER attention and GROSS margin pointing towards you?
Micromax
Canvas
Promotion
Promotion, a need for every product.
Versatile example of promotionProduction cost : 100 Cr.Promotion Cost : 52 Cr.Revenue Collected : 132 Cr.
RecapDifferent Challenges in developing new
product & services• Global Competition• Time• Market Potential• Technological Change• Distribution• Market Size• Price• Promotion
Disclaimer
Created by Aakash Tripathi, IIT(BHU), during an internship by Prof. Sameer Mathur, IIM Lucknow.
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