A product is considered new if it completely opens up a new market, replaces an existing product, or significantly expands the market for that existing product. Old products can be considered new when they are introduced to a new market, recently packed, or marketed with a different approach.
Some sources for new products include academic institutions, acquisitions, competition, customers, external investors, and internal product development. Developing and launching new products can be very expensive and risky. In fact, it is generally said to be riskier than development or market penetration. One way to ensure that money spent on new product development is not wasted or to reduce new product launch failures is to embrace the new product development process.
This process constitutes idea generation, selection of new ideas, concept development and testing, business analysis, marketing strategy, and many others. Planning and measuring the success of the new product can be done based on its performance at various stages of the product life cycle, that is, if the company uses this method of monitoring the progress of the products. The important stages to consider when it comes to launching a new product are introduction, growth, and maturity. However, the company can also choose other indicators.
For example, indicators such as new product sales revenue, cash flow, and profit margin will indicate the performance of a new product from a financial point of view. However, new products are often subject to losses in the introduction stage due to inadequate demand, research and development costs, high fixed costs and others. This should be taken into account when setting goals and measuring results.
Additionally, market share growth serves as a positive success indicator, although this may not apply to all products or markets. For example, there are some niche products or a specific product that is new and needs to open its own market.
Internal perspective indicators are indicators that show how processes within the company affect the success of the new product in terms of development and launch. These indicators are meeting budget and schedule, evaluation of new product development, marketing mix, and the appearance of shortages or excesses of new products and resources. Going beyond budget or schedule or regular shortages shows that something could be wrong with the company’s operations, which can lead to failures in the development and launch of new products.
Additionally, frequent evaluation of the new product development process and the quality of the marketing mix can help drive the company experience, as well as identify changes or modifications that can be made to improve product performance, as well as the overall performance of the business.
The following set of indicators shows how the launch of new products can affect the situation in the company. In addition, indicators from the customer perspective include the buyback rate, the number of complaints, and the customer’s awareness of new products. New product development and production generally requires new skills, which could be through training. Employee involvement in new product development is also equally important. In addition, the evaluation and analysis of each launch is essential to achieve the experience of the company in the launch of new products.
