Product is the life-blood of the organisation. New product creates new value for customers, improves the society, and enables continuous existence of the company. To have successful product launch, an organisation should make strategic plan of how the new product cope up with internal and external factors. After identifying the available resources, a strategic plan focuses to exploit the available opportunities (Tantalo, & Priem, 2016). If the product does not offer new value to customers, the firm will eventually die. Due to new product development, the customer has wider choice of products available to them. The existing market does not lack products. However, each time, product offerings are improved to satisfy customers. In this report, Nestle has been launching a new product, which is a gym juice in order to increase the market share and overall turnover. The purpose of Nestle is to establish its brand and meet the demand of large number of customers. The aim of new product development process is to cater and fulfil the needs and demands of market segments, which are niche. Employees figure out a way to solve the problems faced by the customers. Hence, they search for an idea that can meet the needs of customers.
New product development is the process of introducing and bringing new product in the marketplace. The need to develop new products can be due to changes in the consumer preference, increased competition, and new technology. Innovation in business is crucial because of changing market needs. Numerous new ideas are identified which can fulfil the demand of the people. Hypothetically, for developing new product and launching it in the market nestle is choosing gym juice as a product. Development of new product requires identifying target audience (Thrassou, Vrontis, Chebbi, & Yahiaoui, 2012). Before launching any product, the organisation undertakes market research for identifying target audience. Another important research technique is brainstorming where creative thinkers from outside or inside the organisation helps in product development. Nestle must have analysed various marketing environment analysis such as SWOT and pestle analysis. When nestle launches its new product that is a gym juice, Nestle should communicate to chefs, employees who will assist in the production of new product. The content should be nutrients rich that can attract the most customers. The chefs may give sample of a unique gym juice consists of high protein, vitamins, and minerals (Anderson, 2008).
An employee should have strong product argument that can support every new idea of a product. The employee should have good communication and presenting skills. The product idea must solve any problem of the consumers and have the ability to generate maximum revenue. The product launching should have relevant reason that can meet the demand of the people. The presentation in the meeting should define the target audience, and develop marketing campaign methods to reach the target audience. The employees can incorporate a set plan for a product presentation (Saeidi, Sofian, Saeidi, Saeidi, & Saaeidi, 2015). Moreover, the managers seek how product launching will benefit them and the company. Preparing to introduce and launch new product, it is crucial undertaking for any business. The company has to invest considerably huge time, money, and resources to develop a new product. A strong internal communication is important for new product launch. Communicating the product to company employees make them responsible to help the workers to increase productivity. The presentation can have two sessions-
Youth is very much fond of gym activities. Youth is advised to take proper diet by their trainers when exercising. Nevertheless, no single fruit juice contains all the appropriate contents, which are advised to take during workouts. Therefore, nestle kept identifying the market needs and finally had an idea to launch the gym juice. The idea generated by the employee is responsible for idea screening. Employee must have explored various product ideas. However, employee found to bring the gym juice as a product.
The introduction of new product in the internal environment affects the working of the organisation. The focus of the managers adjusts to all product being manufactured. Manufacturing new product can either create complexities in the organisation structure or allow the organisation to ripen the organisation. If there is proper division of labour, it is possible that each team of labour may efficiently contribute to the organisation`s growth. There are various effects on the organisation due to new product development-
Value of employees- The strength of employees is an important internal factor. Check whether workers are excited to work on new product or they are of afraid that their work can create loss (Nuryakin, Aryanto, & Setiawan, 2018). Check whether employees are motivated or not. If not, workers will produce better results. For new product, employee and department collaborate on ideas. Company starts operating new current processes for new products. Before the processes, the company has to recognise that how far are the processes ethical. Strength has favourable effect on the business working whereas weaknesses can have harmful effect on the product (Wagner, & Hollenbeck, 2014).
Company culture- By exploiting the additional internal resources and meeting the demanding global competition, company creates value for its product. These resources should create a unique product, which has unique advantages and core competencies. Core competencies are capabilities that create firm`s competitive advantages over rivals. Core competencies in new product distinguishes it from the competitor`s product. Core competencies do not develop over time. Various organisational processes are applied to deploy different resources and capabilities.
The driving force behind new product development is change and uncertainty. One problems that organisation faces is how to cope up with the uncertainties and risk evolving from globalisation, internationalisation, short life cycle of the product, brand and increasing pressure to innovate. New product development is the best way to manage demand for the certainty that is caused by innovation, market, seasonality, supply chain management, and market situations (Zsidisin, Hartley, Bernardes, & Saunders, 2015). These uncertainties indicate demand the need to be flexible towards the expectations of consumers for reducing the delivery lead-time and increasing number of introduction of new product. The importance of new product development has limited to product development process, labour skills, job design, available technology, and material management. Coordination between these activities is crucial and critical for developing products. To overcome the coordination problem, the three main variables has to remain flexible. The variables are- technology, competences, and development process. For greater success, the key contributors to success of new product are commitment from senior management, clear division of team to delegate authority to improve new development strategy and good communication within the internal stakeholders and across the external stakeholders.
Rivalries among industry players can affect industrial profits because of increased innovation, increased marketing through advertising, increased product improvements. A company, who continues operation since last few years will enjoy competitive advantage over new entrants. Therefore, existing firm enjoys customer trust. A monopoly industry earns the most profit (Palandeng, Kindangen, Timbel, & Massie, 2018). However, when there is large number of firms operating in the same industry. Competition level among the industries is at the peak because of availability of large number of product resource providers. In addition to existing competition, price competition is more likely create complexities because products and services can be identical, which encourages price competition to acquire market share. Especially in fast moving consumer goods, industry where fixed cost is high in beginning and marginal cost is low (Valuation academy, 2018). This forces competitors to cut the prices below average costs to regain some of fixed costs. The new product named gym juice proposed by Nestle Company has many competitors. The various competitors for gym juice to Nestle are-
Nestle will face high competition from the existing manufacturer. Nestle has to build new strategies so that the new product can have unique advantages. New product should have competitive advantages over others to win the market share. Companies can make strategic moves to acquire competitive advantages (Cusumano, Kahl, & Suarez, 2015). A strategy of leadership in various factors such as quality, innovation, and cost helps to develop competitive advantage in a new product (Adams, Jeanrenaud, Bessant, Denyer, & Overy, 2016). Any new product can acquire competitive advantage by various strategies-
Cost leadership- As nestle has been one of the largest company in food and beverage sector since 1866. Reported, Swiss food giant posted 7.2 billion net income of nestle. The Swiss food giant also reveals that nestle is growing by 2 to 4% in 2018 (Turak, & Bercetche, 2018). The data clearly represents that nestle has covered its fixed cost, attained break-even point and earns a fat profit. Nestle, by becoming an effective cost producer, the company can offer a price to customers that the competitors cannot match. A company can make number of strategic moves to cut costs, that includes either investing in productive technology and equipment or outsource manufacturing to low cost producer.
Innovation- Innovation, as a strategy gives organisation competitive advantages by developing new products with a different feature, which distinguishes it from its competitors. Focus on the product features that can offer exceptional value and unique benefit to customers (Han, Kwon, Chung, & Son, 2017). Nestle can add more beneficial supplements such as drinks that meet specific deficiency in human body. A person who suffers from the deficiency of basic carbohydrate, vitamin C, or sugary fat can be a target for the company. Nestle can ensure to provide fresh packed juice without adding preservatives (Herrera, 2015).
Customer Experience- Exceptional services provided to the customers add to the sustainable unique form of competitive advantages. To achieve customer loyalty and trust, sales channels must provide high level of information and marketing material, which uses customer information to target certain audience (Cui, & Wu, 2016).
Partnership- A partnership strategy can help to improve the competitive advantage by working with the partners, which may bring new ideas. Integrating operations with partner in the supply chain management can enable to innovate operations. Sometimes, Partnership agreement comes in existence due to lack of resources available. However, Nestle have enough capital to add a new product in its offerings. However, to acquire new features in the product, the company can shake hands to incorporate unique feature in the product.
Knowledge- The research undertook by the company to identify the target audience could build a strong competitive advantage by capturing and sharing the knowledge of experts for the product (Sørensen, & Jensen, 2015). There are various technology which are operated by the experts that help the organisation to reduce the overall cost. The researchers also segments the markets according to its types such as demographic segmentation, geographic segmentation, distribution and price segmentation which assists the organisation to serve the niche market.
Conclusion
In today`s era, new product is recognised as the life blood of any organisation because grabbing new opportunities emerges to give maximum profit. A firm with a successful new product ripens larger profits which shapes the company`s future. Developing and managing products is critical to organisation growth. The development of new product focuses on the target audience. The process of new product development consists of generating idea, screening the ideas, expanding the ideas to business analysis, market testing, and commercialisation. The research process helps to ascertain the problems involved in the cost of developing a new product. Launching activity of new product invites competition of existing firms. The above study clearly elaborates that competitors who are already enjoying popular standing in the market are the existing organisation. However, the company should create competitive advantage in the new product. Competitive advantages such as cost leadership, innovation, partnership, knowledge and consumer experiences. New product manipulates the operation of the organisation. The introduction of new product can either contribute to great earning or create chaos among the employees. Before the introduction of new product, organisation should divide the labour into different teams. Each team should be responsible to particular product manufacturing.
References
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