The Importance Of Product Development For Business Organisation
There are several answers to this question – all of which may be encapsulated under the generic term of innovation – which apply to any product which needs to be marketed – be it a car, a civil engineering project or a bar of chocolate – and these are addressed below under the following headings:-
- Market size
- Demographic considerations
- Green issues.
Any given product – particularly in fmcg – has a market comprised of core consumers and peripheral, occasional consumers – which are, perhaps more deserving of effort. Furthermore, it is normal for any given saleable commodity to experience competition from comparable commodities. Where there is none, a niche exists for a competitor to innovate so as to invade that void. Thus, market size, while finite, is not always defined, and space exists for product development to profit by the opportunity.
Before creating a product for sale, a sound, deep knowledge of the existing comparable, competitive products and the market sectors they are commercialised in, is critical for costing, targeting and price fixing.
There is an aphorism in english which proposes that if one builds a bigger and better mousetrap, the world will beat a path to your door. Hence the ability to out-mousetrap the competition by sound, innovative and adventurous product development provides a lynch-pin to support business success.
These considerations tend to be more relevant in two sectors – at the mass-marketed domestic consumables such as clothing, cosmetics and fashion, and at the capital end of the market such as for motor vehicles, soft furnishings, and white goods, where capital outlay is regarded as an investment. These items are distinctly vulnerable to change of fashion caused by the mindless following of the examples of media celebrities. The intensity with which the consumer is attacked by vendors seems to increase almost exponentially, and with the ability already in existence to track individuals via their cell phones – increasing in response to a virus pandemic – it won’t be long before targeted advertising will assault the consumer as he or she goes shopping.
Hence, all markets addressing the consumer tend to need to be agile in their responses to change in needs, politics and fashion, and manufacturers need to be able to innovate very quickly so as to catch the tide of opinion and fashion.
Green issues include commercial, social and political attitudes locally, nationally and world-wide. A recent example of this is the damage done to diesel car manufacture by incorporating gas analysis cheating systems to defeat emissions testing. This has resulted in the Companies being forced to develop new ways of controlling emissions – or lose much of their market. Further issues which have affected public perception of business include oil spills – running from the Torrey Canyon disaster in 1969 to the Deepwater horizon disaster in 2010, which have led to the need to innovate new ways of producing energy- and the multiple infant deaths caused by the Nestle baby formula disasters in Africa, which has led to occasional boycotting of the brand. To contend with such negative perceptions, businesses need to attend to their Corporate Social Responsibility (CSR) image, while trying to innovate their way out of the mess they were in.
Additionally, brand may have influence, particularly in an arena such as consumer electronics where rapid innovation and new product launch have great significance for market success.
From the above, it would seem logical that businesses are not static and inanimate, but behave to some extent as though they were living organisms faced with many challenges – which they must address successfully in order that they might retain their competitive edge – and to carry the analogy of life-forms further – businesses need to evolve in order that they might win – while the Devil takes the hindmost and the weak go to the wall. Product development – innovation – therefore equates with evolution and without it the species fails.