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Investment That is to Develop New Products - Essay Example
Pages 6 (1506 words)
Marketing Referral Assignments Contents Question 3 Reference 9 Question Discuss the view that it is not worth the huge investment that is necessary to develop new products when it is much easier to copy the market leaders’ products. Give examples of market leaders and market followers…
The development of new product is of course risky, time consuming as well as expensive. Firms need to produce dozen of ideas regarding new products where only one idea might result in successful product. The failure rate of new product is much higher than the success rate, as high as 80% and the reason for failure are numerous, like inadequate market survey, poor screening, market orientation, product defects, and some inadequate launching effort (Boone & Kurtz, p.398). Due to high investment which is needed to produce the products and various other steps needed to take care of by the manufacturers to ensure success of the new product, most of the firms think that new product development is not worth huge investment because of the rate of failure, and believes that it is much more feasible and easier to copy the market leaders product. Market leader are referred to as those organization which poses the largest market share in a particular market and the market followers are those organizations which imitates the top market leaders but at the same time do not upsets the ongoing balance with respect to the competitive power of the respective industry. These market followers prefer to avoid the direct attack and reap the product benefits of innovations which are made by the leaders of the respective market through imitations. ...
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