Companies are constantly developing new products to keep up with consumer demand, technological advancements, and innovations. Although developing a new product can be profitable, companies can be confronted with many challenges that need to be overcome before the product launch can be termed a success. We will have a look at the key new product development challenges and discuss ways to overcome them.
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Various jurisdictions have various laws regarding the importation and use of products. Some countries have also put in place laws that limit and regulate who can access products that might pose risk to the public or have the potential to be abused. Political and religious reasons could also be used to restrict the sale of certain products.
Companies have to overcome new product development challenges such as these in order to operate in different countries legally. Failure to comply with these regulations could lead to huge fines and legal problems.
The world is culturally diverse. Deferent people have different cultural, religious, and social orders that govern how they do things. This means that products that are accepted and consumed in one area could be illegal in another region. For example, while alcoholic drinks are enjoyed in many places throughout the world, they are highly restricted in Muslim countries.
Companies have to overcome new product development challenges associated with diverse cultures if they are to thrive in the global market. It is important to note that new product development challenges emanating from cultural differences can be hard to overcome since cultural practices are deeply rooted.
After a product has been successfully designed, tested, and its production is in progress, the next step is to promote and sell it. This is a critical stage and the company releasing the product has to overcome all new product development challenges at this stage.
The key challenge here is that every month, thousands of new products end up in the marketplace. How do companies make their products stand out from the crowd? The answer is as always a carefully designed and implemented marketing strategy. Before even starting to develop new products, consider the problems you want to solve for your target audience. The solution you have come up with is the answer to their problems – so show them. Investing in advertisement via various channels is one way to communicate your message. Clearly, the costs associated with promoting products can be enormous, which means that it could leave a huge financial dent in a company especially if the product does not success over time.
Therefore, try to evaluate as early as possible whether your product will stand a chance to succeed – for instance by co-developing it with your target audience, by doing testruns with sample buyers, or by using one of many available dedicated new product development strategies designed to focus on the most promising innovations.
A further challenge that firms releasing new products have to overcome is related to distribution. In fact, distribution challenges are among the most significant new product development challenges because they will directly determine the success of a product. As such, companies have to find the right distribution channels to ensure their products reach their clients wherever they are and in a timely manner.
Many countries do not have a centralized distribution channel. This means that manufacturers have to work with dozens of regional distributions. In USA, new producers could take advantage of huge retailers, such as Target or Walmart, to introduce their products into the market. In other markets, for instance in Asia, other channels may be required. The choice of channel clearly depends on the type of product you are trying to sell. It goes without saying that online channels increase in relevance – but even then, many options are available. Make sure to have a carefully planned and implemented distribution strategy to overcome this new product development challenge.
Although most of the developed countries have done a good job in standardizing technology within their borders, much has to be done globally to achieve the same. This is because each country or economic zone has its own technology standardization policies.
Most companies, therefore, face challenges that result from the technology standards that are adopted in different regions. One example is related to electrical voltage. This is because different jurisdictions use different electric voltages for electrical appliances. This means companies developing new electrical items must overcome that challenge. This often drives the production costs up, thus affecting the price of the product.
Approach to new product development challenges: be prepared
As you may have noted throughout the article, the solution to the discussed new product development challenges is in most cases not always easy but at the same time always leads to the same answer: carefully planned new product development strategies.