As it is possible to use the product life cycle as a portfolio analysis tool, which allows us to consider whether we have adequately provided for the future profitability for the firm/brand, it is an obvious that there is a strong connection between the product life cycle and the firm’s new product development requirements.
Obviously virtually all new products to the firm would generally be introduced during the introduction and/or growth stages of the product life cycle. This is because in these two stages there are opportunities to gain market shares more “easily”, as consumers have lower (less formed) brand loyalty at that point of time, due to their limited direct experience with purchasing the product.
Importance of new products
New products are generally critical to the long-term success of any organization, as they allow the firm to:
- adapt to changing market conditions,
- compete against new offerings,
- utilize new technology,
- expand their target markets,
- enter international markets,
- add excitement to their brand/s,
- adapt to new consumer preferences and lifestyles,
- achieve greater revenues and profits,
- and so on.
The new product development stage
Some variations of the product life cycle will include an initial state known as product development. This product development stage is internal to the company and the product is not available for widespread release to the average consumer. At this point of time the product may be “tested”, which is a form of market research, with some consumers in order to help fine-tune and further develop its product for eventual launch.
It is also possible that during this period of product development that the company may issue public announcements in order to start generating some excitement and initial demand for the product. For example, this would be common for a new game console or some new piece of technology where there is a lot of media attention built up prior to the actual launch date of a new product (which usually requires a strong brand to achieve).
Obviously in the product development stage, there are no actual sales of note (other than testing sales), so in terms of final market adoption this stage is of limited impact to its long-term success..