Conceptualizing Newness and Positioning Really New Products
Advances in Consumer Research, Vol. 29, p. 267, 2002
Posted: 4 Aug 2011 Last revised: 1 Jul 2014
Date Written: 2002
New products hold the promise of the future for most companies. Without successful new products, revenues, market share, and profits eventually decline in accordance with product life-cycle models. Thus, new product development is a high priority and a large expenditure item for most companies. Yet, the failure rate of new products is rather high and higher still for products that are more novel (Urban and Hauser 1993). Indeed, this is one reason why many firms have opted for brand extension as the preferred method of new product introduction. While brand extensions are seen as vehicles for steady profit expansion, on average they don’t have the same ability to reshape the competitive landscape as really-new products (RNPs) do. In fact, a reshaping of the competitive landscape has become definitional of RNPs: RNPs create new product categories and lead to major shifts in market share (Lehmann 1997). In addition, a company’s ability to successfully develop RNPs impacts their future growth capabilities. John E. Pepper, CEO of Procter & Gamble states "Our greatest periods of growth have occurred when we’ve been able to bring truly new-to-the-world products to market."
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