Products are frequently improved by companies. There are various pressures upon a company to do so, particularly from competitors, changing customer needs and technology improvements. However, there are an array of benefits and challenges involved in making the decision whether or not to improve an existing product in the marketplace.
Please note that a product improvement is classified as a new product project; please refer to the article on main classifications of new products.
What is a product improvement?
When a firm improves one of their existing products, which they are already market and sell to consumers, in some manner, then this is known as a product improvement.
Product improvements can be quite substantial or quite minor. For example, for a food product one of the ingredients may be changed to improve the taste. Or the packaging may be changed to make it easier to open or to protect the product better.
Product improvements can be quite substantial with almost the entire product (that is, its features) being redesigned in some manner.
Potential benefits of a product improvement
- Match or outperform competition
- Meet changing consumer needs
- Leverage improvements in materials or manufacturing technology
- Provide variety
- Energize the brand
- Input into marketing communications
- Increased retailer interest
- Arrest declining sales
Match or outperform competition
One of the main drivers for product improvements is to stay equal or ahead competition products and offerings. This is certainly common in the technology sector, software, banking – where product initiatives by competitors are generally matched off or improved upon. This is to ensure that no competitor has a long-term advantage in terms of a particular product offering.
Meet changing consumer needs
Over time customer needs will change and potentially new segments will emerge. In some cases, a standard and stable offering of products, without improvement, is unlikely to stay relevant to changing customer needs over time. In this case, it becomes necessary to consider the needs of the new marketplace and improve the product accordingly. This will generally mean enhancing existing or adding new product features and benefits.
Leverage improvements in materials or manufacturing technology
There is continuous improvement and innovation in technology, in manufacturing systems, and in input materials to the production process. Therefore it makes sense to leverage these benefits and build into existing products. A simple example here would be a computer manufacturer improving the memory capacity and the processing speed of a computer.
By improving the product over time, a firm is essentially adding variety to its product mix. In some markets, such as entertainment, food, hospitality, travel, and so on – variety is a sought after benefit.
Energize the brand
By regularly improving offerings and existing products, the brand and relevant may be perceived as quite innovative. For example, 3M works hard to create the market perception among consumers and retailers that they are innovative and exciting. One way they can achieve this is via frequent product enhancements.
Input into marketing communications
A new and improved product provides a good story (message) for the marketplace. Therefore, a product improvement can form part of the marketing communications campaign for the firm. This gives the company something new and exciting to communicate and may also add to the above benefit of energizing the brand.
Increased retailer interest
It is possible that the existing product, in its prior form, may not have appeal to certain retailers for certain reasons. Alternatively, a retailer might be more interested in a company that is seen to be willing to reinvest and improve and its existing product line. For this combination of reasons, frequent product improvements may deliver greater access to retailers for a manufacturer.
Arrest declining sales
Probably one of the main triggers for a product improvement is the declining sales of an established product. This is typically a signal that the product is no longer as relevant or as competitive as it once was in the market. In many cases, an appropriate product improvement should be able to reverse this situation if it is executed correctly.