Investment That is to Develop New Products Essay

Investment That is to Develop New Products - see ExampleThe development of in the raw product is of course risky, time consuming as well as expensive. Firms need to make water dozen of ideas regarding new products where only one idea might result in successful product. The failure appraise of new product is much mellower than the success rate, as high as 80% and the reason for failure atomic number 18 numerous, care inadequate securities intentness survey, poor screening, trade place orientation, product defects, and many inadequate launching effort (Boone & Kurtz, p.398). Due to high investment which is needed to produce the products and various other steps needed to take care of by the manufacturers to ensure success of the new product, most of the firms think that new product development is not worth huge investment because of the rate of failure, and believes that it is much more feasible and easier to copy the market leaders product. Market leader are referred to as those organization which poses the largest market share in a particular market and the market followers are those organizations which imitates the top market leaders but at the same time do not upsets the current balance with respect to the competitive power of the respective industry. These market followers prefer to avoid the bet attack and reap the product benefits of innovations which are made by the leaders of the respective market with imitations. To imitate the market leader and avoid making huge investment, the market followers adopt quartette major approaches, Counterfeiter strategy is adopted by the market followers when they aim to duplicate the products of market leaders and packaging style and therefore sell in the black market. The strategy of counterfeiter has plagued brands like Apple and Rolex mostly in Asia. Secondly, cloner strategy is being used to emulate the market leaders product name and packaging one such example of cloner is Ralcorp Holdings which sells off imitation of brand cereals in lookalike containers at a much lower price. Thirdly, the market followers adopt imitator strategy where some features are copied from the market leader while retaining few features of its own. The last strategy used by market followers is the adapter strategy which involves adoption of owns product as that of market leader and sells the product into contrary market. S&S Cycle supplies railway locomotive to the firms which builds bikes like Harley. The company buys, every year Harley Davidson and takes off the engine apart and finds out what to be improved. The followers earn or make profit at a lower rate than the market leaders. One such example s the food processing industry which revealed that only the top two companies were profitable (Kotler, p. 194). Among the mobile phone manufacturer, Philips a well known European brand in addition fall under the category of market followers. There are other Asiatic companies which operate on the European mobile market such as Sharp, Haier, Pantech, NEC, Innostream and Sanyo (Anonym, p. 15). Market followers is the start up organizations in the industry whose major intentions are to hold the market share without investing and also providing challenges to its strong competitors. But however this does not mean that the market followers lack any physical body of strategies in fact it is believe of the followers that it is much more advantageous to remain follower and pursue the me too strategy rather than being the market leader. The strategy to remain market follower is believed to be effective because the