New product development is a high risk proposition for firms to start as it involves high level of risk in targeting a budding market segment where customer wants are hidden and service or product requirements are implicit. On the other hand, new products often create considerable opportunities for firms to differentiate their offering (product or service) and helps in attaining a lead from competitors through differentiation. This lead can be termed competitive advantage.
A successful new product launch creates industry wise unique standards, which may become barriers of entry for new firms trying to penetrate. It also helps in refreshing the minds of the engineering personnel; sales force and give them a sense of accomplishment. It also provides opportunity for corporate renewal and redirection to the firm for its long run planning.
A study of the US market reveals that nearly 30,000 products are introduced yearly in the packaged goods industry. Almost 70 to 90 among these percent fail to occupy store shelves for more than a year. Another study, shows that almost 47 % of the companies who enjoyed first mover advantage by commercializing before others in a particular line of business had failed, meaning that firms that introduced new product categories left pursuing those modern ideas. One prime example where innovator who was out run by followers is RC Cola, a small who first commercialized cola in a can, as well as the first mover to launch diet coke. Coke and Pepsi entered the market immediately depriving RC Cola of any significant gains from its innovation. Similarly, Bowmar the inventor of pocket calculator lost market share to Texas Instruments and Hewlett Packard. Xerox office computers failed to gain any significant economic returns as market share went to Apple Macintosh which had similar features like mouse and the icons.
Normally organizations try to launch superior products or services and improve their quality gradually, making implicit assumption that the customer is knowledgeable and differentiates between quality and ordinary products. This is even true for companies like GM where a top notch executive once said many years ago, “How can the public know what kind of car they want until they see what is available?”. This notion was also common place in the history where phrases like “Good wine needs no bush” were used meaning that a good product does not require any promotion. This theme generated here goes in conformance where companies try to come up with a better “mousetrap” are wonderstruck to reveal that consumer are not necessarily looking for a better mousetrap but for a better solution to the mouse problem. In an ideal situation where other things remain the same, normally consumer follow steps such as seeking awareness about a product or services, then comprehending the information, afterwards they form a positive or negative attitude about the product. If they value it positively the start considering it legitimate to use the product, then the customers uses the products or services on a trial basis so as to check efficiency of the product. If the product matches expectations they adopt it. Diffusion is a macro process encompassing the spread of a new innovation from its creator to the general masses. Whereas, adoption is a micro process which is concerned with the steps through which a customer passes when accepting or rejecting a new innovation.
Analysis of Apple’s Product Development Process
Due to the strong marketing focus Apples has been very successful in creating a very loyal customer base that think, live and act in a different way. In the year 1998 Apple was born again when Steve Jobs launched the iMac. This new computer comes with a complete collection of software’s and new operating system called MAC OS X. It was a success. Then after Apple launched its iBook (laptop). However the home run was scored by the introduction of iPod in the year 2001 grabbing more than 70 percent of market share in the US. Furthermore, Apple made a deal with Intel to become compatible with Microsoft Windows. Since then, iPod is enjoying market leadership in the domain of competition.
Ever since its inception, Apple has remained busy with developing more than one product at a time. In retrospect we find that in the year 1984, Apple commercialized two products namely Apple C and Macintosh, in 1986 it launched Apple llgs and Macintosh Plus, 1987 it launched Macintosh II and Macintosh SE. In 1989 it commercialized three computers namely Macintosh Portable, Macintosh IIlci and Macintosh IIfx. In the year 1990 it launched another three computer models Macintosh Classic, Macintosh IIlsi and Macintosh LC. Similarly in the year 1993 Apples commercialized seven products namely Color Classic, Quadra 800, Macintosh centris, Macintosh LCIII, Power book 180c and Macintosh LC 475. In the year 2001 Apple again launched three products namely Power Macintosh Quick silver, iMac Patterns its home run product under the name of iPod first generation. In the year 2004 Apple commercialized four products namely xServe G5, iMac G5, iPod click wheel and iPod Mini and in the year 2005 again Apple launched four successful products namely, iPod shuffle, iPod Nano, Video iPod, and Mac Mini. In the year 2006 again four successful products namely iPod shuffle, iPod Nano, iMac slimmer Intel and Mac Pro. As we all know that in the year 2007 Apple scored a home run by launching its premier iPhone. By analyzing the above trends in NPD and commercialization it can easily deduce that Apple is constantly churning out new innovative products at unprecedented rate. This is mainly due to the fact that at Apple is using concurrent engineering philosophy to good effect. As earlier on stated in such a process the product under development may lie in more than one stage of development and thus we can also deduce that Apple is following a rugby approach to new product development which can go back as well as in forward direction simultaneously. These factors have enabled Apple in terms of speed, accuracy, and quality.
Similarly, we can interpret that Apple has invested heavily in new product development process and therefore attained the status of market pioneer. This was especially true for Apple a couple of decades ago as well as today. Because with the advent of iPod first generation in 2001, on the market it revolutionalize the electronics industry and had a major impact on competitors. Ever since, Apple has successfully launched several other line extensions of the older version with small incremental improvements. For example in the year 2003 Apple launched iPod 3rd Generation and in the subsequent year 2004 it launched two more extensions of the products namely iPod
Mini and iPod click Wheel. Again in the year 2005 Apple came up with some improved products in the form of iPod Shuffle, Nano and Video iPod. And finally in the year 2007 iPhone was launched under the same brand umbrella term (i). Therefore gaining competitive advantage is a function of predictably predictable activities within the firm. Thus we see small incremental changes in Apple product line best exemplified by Apple launch of iPhone in the year 2007. If we consider the case of NeXT, a desktop computer developed by Steve Jobs, the legendary founder of Apple, Customers did not want the optical drive instead of the floppy drive. Because the new feature makes it difficult for end-users to switch work from a personal computer to a NeXT. The machine enjoyed other superior features like hi-fi sound; end-users never look beyond the initial resistance. Many people found it far too expensive, while engineers reckoned workstations with superior value.
Therefore, Steve Jobs has to abandon the 200 million dollars product. Here it is suggested that if Steve has listened to the customer voice he could have been successful, because in this scenario customers were expecting an incremental innovation. However, for almost thirty long years Apple has remain the trend setter to foresee and foretell the future of the domestic computers. The balance of probability is high that it would continue to lead the way. The success recipe came to Apple in the form of iPod, and even Apple personal computers sales started going up because of this hit product. Apple has been very clever in its ploy of planned obsolescence as it is launching iPod after iPod and that too with new improvements. The new improved product has the cool feeling assorted around it. Therefore it is compelling customers to engage in repeat purchase, which serves the long term purpose of the company. Thanks to planned obsolescence. Another very interesting case in point relating to Apple is launch and commercialization of Apple Macintosh personal computers line. The new Apple Mac customers encounter mistakes while using Mac because it doesn’t work the same way it would be expected to on a Windows computer? Simply the Windows users follow and expect everything to word the same way as in Windows. And on the other hand Macintosh users see and expect their Macs to work in its original way (Macintosh way). There are substantial commonalities between Apple and Windows operating systems, but there are some differences worth mentioning. The number of mistakes lie somewhere in the neighborhood of 25 to 30. However, the five most common mistakes of new users of Mac OS X as; (1) They close an application’s windows thinking the program has quit. (2) They’ll download Firefox and then run the browser from the disk image and then not be able to throw away the disk image because the program is still running. See number (1. 3).exe files lie scattered around the desktop from aborted downloads of Flash Player or some screensaver-cursor-spyware doodad. (3) Untitled folder. Untitled folder 2. Untitled folder 3. Untitled folder 4… (4) Using Safari’s Google search field to get to hotmail.com. (5). Desktop Picture or Wallpaper is not a synonym for Screensaver. However, majority of these problems are not problems.Simply they relate to the differences in Windows way of doing things and the Mac way of doing things. Consumers can be taught by programmers so as to educate them about it. In this regard Apple should make some changes in its Mac operating systems as well as its hard ware. These issues could also be addressed in advertising, so as to remind consumers that Macs are not going to work the way Windows computer does so that they may capitalize in totality what Apple is offering. An interesting case in point is that in the year 1985, Bill Gates was literally begging Apple CEO Steve Jobs to license his Mac operating system to Personal computer vendors. Apple did not agree and later on Bill Gates came up with a stone crushing reply and now the situation is that Apple has only 4 percent of market share in PC business. However, this time around the buzz is related to digital music, encompassing iPod music player and its iTunes made it cheaper and convenient to download songs at a rate of 99 cents only. But the irony is that Apples iPod music player only plays songs in the company’s “FairPlay” digital rights management (DRM) format and songs downloaded from iTunes play only on iPod.
For example, a customer who gets a song downloaded from Apples iTunes and wants to play it on his or her real player would be highly disappointed. On the other hand an iPod owner is left limited to get music from iTunes, even though there are many other services on the Web, such as Napster and Real Networks. But the customer can’t help the situation. Apple must hear the voice of the customer otherwise the customer is unhappy which isn’t what a company as innovative as Apple would like.