New Product Development

The need for the constant development of new products which will enable a firm to gain and sustain competitive advantage is central to the practice of marketing. The opportunity to satisfy customer needs better, or more cheaply, than the competition is an important reason for the institution of some kind of facility for new product development within a company. Such a facility will have responsibility for monitoring technological and market change and for matching the company’s products to take advantage of these changes, at a profit. Such a responsibility is onerous: a survey by the author suggested that an average figure for the number of R and D projects carried out by companies in a five year period was 22.6, resulting in an average of 13.4 new product launches (Hart, 1993). Clearly, a good deal of money invested in R & D is destined not to produce any direct market launches. Of the market launches, an average of 72% were successful, but with a very wide variation, evidenced by a standard deviation of 27%.