New product development is a major component of the firmâ€™s product policy. It is not enough if existing product lines are appraised properly, products are positioned effectively and the brand decisions taken wisely. For higher levels of growth, a firm has to look beyond its existing products.
Meeting Changes in Consumer Demand
In an age of scientific and technological advancements, change is ubiquitous phenomenon — change in food habits, change in comforts and conveniences of life, change in social customs and habits, change in expectations and requirements. Any business has to be vigilant about these changes taking place in its environment.
People always seek better things â€“ better products and services, more convenience in products, more fashion and more value for money. A business firm has to respond to these dynamic requirements and these responses take the shape of new products and new services. Through such responses, the firm updates itself and stays closer to the consumer.
Making New Profits
New products become necessary from the profit angle too. Products that are already established often have their limitations in enhancing the profit level of the firm. It thus becomes essential for business firms to bring in new products to replace old, declining and losing products. New products become part and parcel of the growth requirement of the firm and in many cases new profits come only through new products.
Intrinsically New Products: Intelâ€™s Chip with Video â€“ telephony Software
Intelâ€™s new chip has video- telephony software pre-loaded on it. So, the new generation of home PCs will be video phone-ready computers. They will be capable of making and receiving video-phone calls over standard telephone lines. It allows the user to establish a simple phone connection and see the person he is
speaking to. The product is already available in the market in a limited way. Intel hopes to bring video-phone technology to- the mass market soon.
Intel had earlier launched Proshare, a video-conferencing product meant for industry. The Proshare service requires higher capacity digital phone service called ISDN, which is usually expensive and difficult to obtain and hence, beyond the reach of individual consumers.
The new system capitalizes on the increased power of Intelâ€™s latest Pentium microprocessors and improved compression software allows both video and audio information to share the same standard telephone line.