New Product Development during Recession

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Introduction1

Statement of Problem2

Significance the Study2

Purpose of the Study4

Theoretical Framework4

Aims7

Objectives7

Research Questions8

Research Methodology8

Data Collection Methods9

Research Instrument9

Data Analysis9

Ethical Considerations10

Limitations of the Study10

REFERENCES12

CHAPTER 1: INTRODUCTION

Introduction

New product development refers to the complete process of the development of new products in order to introduce them in the market. A product that is offered to the customers is to provide them with benefits; however, it can be tangible or intangible. The two main areas that are considered during new product development include generation of the idea, product design and the details of the product with regards to engineering. Besides this, the others include market research and marketing analysis. New product development is considered by the companies as the first stage that enables them to generate products which are new. However, the reason why new products are introduced by the companies is because they need to maintain as well as to grow the overall market share because of which the product life cycle needs to be studied.

However, today, recession has become an important consideration when the companies opt for new product development. Since there has been a negative impact on the economy, the rate of unemployment has increased and purchasing power of the customers has reduced. Therefore, thorough research needs to be conducted by the companies before they aim to launch new products. Recession is playing a major role in the rate of new product development which has slowed down because of this. A study has been conducted by Mintel's Global New Products Database with regards to food and drinks, which has revealed that the launch of new products has reduced by 51% (O'Leary, 2009). However, there are also some other industries in which innovations with regards to the products are not being made regularly. Since the customers have reduced spending, the companies are unsure whether those products will be readily accepted, therefore, launches are being cut back. Moreover, another reason behind this is mainly because of the internal budget cuts that the companies have implemented (Myers, 1996).

Statement of Problem

This study revolves around the understanding of the concept of the impact of new product development on the companies during recession.

Significance the Study

The study has been conducted to emphasize the impact of recession on the companies with regards to new product development. Since the companies have expanded their operations internationally, they are also offering a wide range of products to enable their businesses to sustain. However, if there is any product which is not successful, the company is able to reduce the risks. It has been because of recession that the future prospects and situation of economy have always been unpredictable. This is the reason why the companies are unsure whether they should opt for new product development because it also adds to the cost of the company. Moreover, since financial crisis in the coming years have been predicted to get worse, many indications have been made for the world to recover in the next few ...