New Product Development - The Different Types of New Products

Summary

In this video, Mark, from Turks and Caicos, explores various categories of new products that companies create. He explains that most new products are often 'new to the firm' rather than entirely original, like when companies introduce product line extensions or improve existing products. Mark covers how product innovations can help reposition a brand, such as Head & Shoulders introducing body wash, or how brands like Mercedes release cost-reduced versions to target new markets. This overview offers valuable insights into how businesses can approach product development and marketing.

Takeaways

• 🌍 New products are often inspired by lifestyle goals and environments, such as imagining what products could support living in an ideal place like Turks and Caicos.
• 💡 Most so-called "new" products are not truly new-to-the-world inventions but variations or improvements on existing ideas.
• 📱 Iconic products like the iPhone or Model T were not the first of their kind; they succeeded by improving or reimagining existing technologies.
• 🏢 A very common category of innovation is "new to the firm" products, which are new offerings for a company even if the market already has similar products.
• 🎮 Examples of new-to-the-firm products include Microsoft launching Xbox or Apple introducing the iPhone, expanding beyond their previous product focus.
• 🥣 Many companies grow by adding new items to an existing product line, such as Kellogg’s creating new cereal variations.
• 🔄 Product line extensions allow brands to leverage existing brand recognition while offering something slightly different or novel.
• ⚙️ Improving existing products—such as adding extra nutrients, features, or efficiency—is another major source of new product development.
• 🎯 Some new products are launched specifically to reposition a brand, like Head & Shoulders expanding from dandruff shampoo into body wash.
• 💰 Cost-reduction products help companies reach new market segments by offering cheaper versions of premium products, as seen with Mercedes’ lower-cost models.
• 🎬 Cost-reduced adaptations also exist in entertainment, such as Marvel creating TV shows and cartoons instead of only high-budget movies.
• 🧠 Understanding different new product categories helps marketers and businesses better plan, develop, and position future products.

Q & A

What is the main purpose of the video?

The video aims to explain different categories of new products and help marketers understand that most new products are not entirely new to the world, but rather new to a firm, an existing product line, or a specific market positioning.

Why does the speaker say most 'new to the world' products are not actually new?

Because many products that seem innovative already existed in some form before, such as smartphones before the iPhone or cars before the Model T, but were improved, repositioned, or popularized later.

What is a 'new to the firm' product?

A 'new to the firm' product is one that a company has never made before, even though similar products already exist in the market, such as Microsoft launching the Xbox or Apple releasing its first iPhone.

How is a new product line addition different from a new to the firm product?

A new product line addition expands an existing line with variations, while a new to the firm product represents a completely new category for the company, even if the market already exists.

What is an example of adding to an existing product line?

Kellogg’s introducing new cereal variations, such as Cocoa Krispies with marshmallows or Peeps-themed cereal, is an example of adding to an existing product line.

What does the speaker mean by improving an existing product?

Improving an existing product involves enhancing features such as efficiency, ingredients, or performance, for example adding extra vitamins, caffeine, or releasing upgraded versions like 'Redbull Plus.'

Why do companies use new products for repositioning?

Companies use new products to change or expand how consumers perceive their brand, allowing them to enter new markets or reduce negative or limiting associations.

How did Head & Shoulders use product repositioning?

Head & Shoulders launched a body wash to reposition itself from being seen only as a dandruff shampoo brand to a broader body-cleaning brand.

What is a cost-reduction product strategy?

A cost-reduction strategy involves creating lower-priced versions of existing products to reach new market segments while maintaining the brand’s core identity.

How does Mercedes-Benz illustrate cost-reduction products?

Mercedes introduced more affordable models like the A-Class and G-Class to attract customers who could not afford their premium S-Class or E-Class vehicles.

Why are cartoons and TV shows considered cost-reduction products for Marvel?

They require significantly lower investment than blockbuster films, allowing Marvel to expand its content and reach new audiences at a lower cost.

What is the key takeaway for marketers and students from this video?

The key takeaway is that innovation often comes from strategic variations, improvements, repositioning, or cost adjustments rather than inventing something completely new.