The development of a new product was much lengthier and more expensive than the company's management anticipated. Consequently, the firm's top accountants and financial managers argue that the firm should raise the price of the product 10 percent above its original target to help recoup some of these costs. Does such a strategy make sense? Explain carefully
Answer:
First, it’s necessary to define “product development” – It is the term used to describe complete process bringing a new product (a set of benefits offered for exchange and can be tangible or intangible) to market.
The development of a new product can sometimes be lengthier and more expensive than originally planned but companies should be much prepared for this. Some companies in trying to guard against this adopt different strategies to either mitigate the loss or recoup some of the cost.
Some, as we have in our assignment try to increase the price of the product. But is this the right strategy. How helpful or sound is this sort of strategy?
Often times a firm’s growth potential lies in its ability to develop and market additional products that fulfil a specific, unmet need while still remaining focused on its core value proposition.
In order to develop and launch a new product successfully, a well executed strategy is essential. It is important to create a system to keep everyone on the same page throughout the process so information is dispersed accurately. While a company can be understandably anxious to get a product out, previewing the product at a trade show event in advance will help gauge the interest and secure set up the actual launch for even better results.
While the development and introduction of a new product can be very exciting process, it can also be stressful if things don’t go as planned. Many companies rarely have little idea as to what their true cost is to develop a new