Microsoft Word marketing doc

Need for new product development 
Planning for new products and development of new products is very 
important for a company. The companies tht do not develop new products in 
the present day markets, which are becoming more and more competative, 
assume great risk and uncertainity. Such companies will find their products 
falling victim to changing consumer needs and taste, new technologies, 
shortened product life cycles, and increased domestic and foreign competition. 
The important reasons for a company to have an effective programme in 
new product planning and development are as follows : 
Products have life cycles 
A product has a life cycle like a man and goes through its different stages 
viz., introduction, growth, maturity and decline. The sale volumes of a product 
increase initially, reach a plateau and ultimately decline. Product innovation 
and new product development is very important for a company, why because, 
i) 
a company’s existing products become obsolete and must be changed or 
replaced as their sales volume as well as market shares are reduced by 
competitive products, 
ii) 
the profits from a product generally decline as it ages. 
Product is a basic profit determinant
The 
profitability 
of 
any product is bound to fall in the last stage of its life 
cycle. Hence, the introduction of a new product at the proper time helps to 
maintain the company’s desired level of profits. 
New products are essential to growth
In modern competitive markets characterized by fast technological 
changes and developments, the watchword for the management of a company 
should be “innovate or die”. Development of new products is a must for a 
company that wants to grow. 
Choosy customers 
Today’s consumer has become not only choosy but also more critical in 
his appraisal of the products that he buys and looks for new and better products. 

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