Types of new products
There are several accepted categories for classifying new products within a company, these are:
- New-to-the-world products
- New category products
- Product line extensions
- Product improvements
- Product repositioning
- Cost reductions
Much more than brand-new inventions
When we think about new products, we automatically think about brand-new inventions such as out of space travel, the computer tablet, a breakthrough medicine, and so on.
While that may be the more “exciting” side of new products, from a marketing viewpoint, they just one of the many types of new products that a company may bring to the marketplace. In reality, most new product introduced to the market are NOT new to the market – they are only new to the firm. Let’s review the more common classifications of new products.
As suggested by the name, the category of new-to-the-world products is essentially a brand-new invention. It has never been brought to market before and the company who has developed it essentially has a short-term monopoly.
Please see the section on for/against introducing new-to-the-world products.
New category products
A new category product is when a company diversified his product range into a product area which it has never operated before. There is nothing new about these types of products to the market; they are only new to the company.
A simple example here could be Coca-Cola. As we know, Coca-Cola is primarily a beverage manufacturer throughout the world. Let’s assume that they decide to diversify into snack foods and cookies. Then these types of new products would be a new category entry for Coca-Cola.
The easiest way to think about a product category is to look at a supermarket – which normally has signage for different types of products, such as cheese, sugar, detergents, pet foods, and so on. These different types of products are all considered to be different product categories.
Please see the section on for/against introducing new category products.
Product line extensions
It product line extension is when the company introduces an additional product which is similar to its existing range of products. A common example of a product line extension is when a well-known brand brings out a variation of its product in terms of size, color, taste, and so on.
Again, if we use the Coca-Cola Company as an example, then any new product of soft drink, juice, sports drink or water, would be considered to be a product line extension – as Coca-Cola already make these types of products.
Please see the section on for/against introducing product line extensions.
A product improvement is making one or more changes to an existing product that is already in the marketplace. The change may be minor or more significant and typically involves only one or two of the product features, in an attempt to either update the product or make it more competitive or offer a greater array of consumer benefits.
You would probably be aware of the phrase “new and improved” which sometimes appears on product packaging – which clearly highlights a product improvement has taken place.
Please see the section on for/against introducing product improvements.
A product repositioning involves taking an existing product in the marketplace and substantially changing its image (that is, it communicated range of benefits) or its target market. On occasion, product repositioning is also supported by the change in the product design and/or product packaging.
Product repositioning is a little bit less common and usually undertaken when the underlying product is poorly performing but has significant potential benefits for consumers.
An example here would be laundry detergents that used to target young parents who would wash cloth diapers for their babies. Due to significant social changes, young families are more time poor, and now choose to buy disposable varieties. In this case, some detergent manufacturers have repositioned their older products away from being suitable for cloth diapers and towards handling tough stains on all clothes.
The final new product category really has no impact in the marketplace, as it is a cost reduction of the existing product. This may be achieved by changing manufacturing or suppliers or ingredients/components. In some cases, the savings is passed on to consumers in the form of a lower price, in other cases the firm’s profit margin will increase.