Page 330 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 297

DEVELOPING NEW PRODUCTS LO 2 . Describe how businesses
develop a product idea into a
commercial product.
A firm develops new products as a means of enhancing its product mix and adding depth to
a product line. Developing and introducing new products is frequently expensive and risky.
However, failure to introduce new products is also risky. Eastman Kodak lost market share
and entered bankruptcy due, in part, to its failure to innovate and keep up with competitive
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products.
The term new product can have more than one meaning. A genuinely new product offers
innovative benefits. For example, Twitter co-founder Jack Dorsey developed a device called
the Square reader, a small credit card reader that plugs into the audio jack of mobile phones.
Dorsey hopes that this new device will eliminate the need for plastic credit cards. However,
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products that are different and distinctly better are often viewed as new. Some product inno-
vations of the past 40 years include Post-it Notes, cell phones, personal computers, digital
music players, satellite radio, and digital video recorders. A radically new product involves
a complex developmental process, including an extensive business analysis to determine the
potential for success. The introduction of Apple’s iPad took many years to develop.
A new product can also be a product that a given firm has not marketed previously, although
similar products have been available from other companies. For instance, Dasani has intro-
duced flavor enhancer drops for its bottled water. According to its advertisements, its flavor
enhancer drops—which come in flavors such as pink lemonade, strawberry, and kiwi—provide
its bottled water with a natural fruit flavor. This is an example of a product that has not been

Courtesy of Dasani Courtesy of Dasani

New Products Dasani’s new flavor enhancer drops are promoted as having a natural fruit flavor with 0 calories per serving. Its product is
meant to appeal to consumers who desire a fruity flavor without the calories.

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