Introducing New Market Offerings is a process through which development of new core products or services takes place in order to augment them for building market offerings, and bringing them to market. In the present globalization era, the rapid product development strategies are being adopted for winning the competitive advantage as well as the first mover advantage. However, the core of these strategies is the market orientation concept that is incorporating the customers’ needs and wants in the new market offerings.
Apple inc.’s iPod and phone with innovative features based on customers’ needs and satisfaction have been the results of its new product development strategy. Moreover, these innovative products have also enabled Apple Inc. to win the first mover and competitive edge over its major rivals such as Blackberry, HTC, and Nokia etc. new product development and introducing new solutions in the market helps an organization to strengthen its market position. As we have observed once Apple Inc. Staggering for survival in late 2005 in the pc market, however, with the inception of smartphone and music player, Apple lifted its market position and created a new market of touch smartphones with rich innovative applications.
Apple, in fact, created a blue ocean for its growth and focused its directions to the rich touch smartphone and music player. That market was at that time was unexplored which also helped Apple to make huge profits and become unparallel until recently. However, this blue ocean now has started to become red Ocean with the new entrants such as HTC, Nokia, Blackberry, Samsung etc.
Newmarket offering also enables an organization to optimize its resource utilization. Apple shifted its resources from being a PC maker and decided to enter a new market for the smart mobile phone. This strategy not only made it a global brand image and the major rival of Blackberry (RIM inc.) but also enabled it to revive its growth in the pc market. Moreover, new market offering and product development strategies become a vehicle for organizational enhancement and renewal. iPod and iPhone have won the hearts of people throughout the world. In addition, these products have revolutionized Apple Inc. and opened many new electronics markets and other segments where it can make its way.
Sometimes fast changing external marketing environmental factors such as technology, socio-economic factors, and customers’ trends etc. force organizations to introduce it new market offering to survive and grow in the present as well future market. As we can easily observe the mobile market that has become so bloody red and competitive that companies have to introduce new featured mobile models in order to keep them on the market map. However, sometimes these new models are introduced with the idea of perceived obsolescence.
Challenges of Introducing New Market Offerings:
Introducing a new market offering has always been a big challenge for many small as well as large companies and these challenges are intensified when the decision also involves new market development. Entering into the new market with new product presents various choices for a firm such as licensing, franchising, and joint-venture etc. each alternative mode of market entry offers various risk-control and trade-off the firm desires. On the one hand, a company may choose to introduce its products in abroad by exporting. This requires the firm to make the little involvements marketing plan, investment in marketing, distribution channels and service standards. However, the firm will have to face the challenges of lack of accurate market information such as customers’ trends, their behavior, and market share and prices levels. The potential threats and risks from the financial and marketing side are also required to be considered while making a choice of market-entry with new market offerings. At the point of entry, firms usually face financial risk as a major one that can be minimized by low-intensity alternatives of market entry such as market penetration. However, this will intensify the marketing risk, as most of the marketing decisions are taken by local partners. It has also been observed that large MNC’s and global companies try to leverage on their brand names, marketing partners as competitive assets and enter different similar markets with new products with one market-entry strategy. Their assumption is that the strategy that has worked well in one market, it would again hold well in other markets, ignoring the fact of adapting marketing offerings to the local market condition and factors. However, more mature and experienced international companies don’t take these risks and they take every step of adaptation such as their marketing campaigns, pricing models, packaging styles, tastes, and distribution channels etc. (Zane Kearns,2003)
International Scenario and New Market offerings:
The narrowing line between domestic and international markets with cut-throat competition is forcing by and large companies to go global and internationalize their operations. It is in fact, a survival and growth war, where companies increasing put under pressure to introduce new market offerings and explore newer markets to exploit opportunities of creating blue oceans sometimes. In addition, the low-cost penetration strategies, while trying to develop new markets looks laborious activity in the current scenario of rapid technological growth where branding differentiation is blurring very fast (Paul Trott, 2001). Now introducing a new product with new market entry strategy is like creating a start-up venture as it requires building marketing infrastructure in place, removing knowledge barrier of the target market, and incorporating customer’s needs and desires.
As mentioned earlier, there are a lot of reasons and rationale that require companies to offer the new product in a new market environment. One of the basic reasons is to gain a competitive edge and win first mover advantage by gaining potential demand for the new product in the newer market. Besides, companies can achieve greater economies of scale by adopting these strategies and becoming internationalized ones. However, in certain cases, this move is in response to a competitor’s action. As they believe that they would gain huge sales revenues from these blue oceans until they become red ocean with intense completion.
At times, companies with the help of innovative technologies, plunge into the same market but with the novel solution that leverages on the basis of technology and thus gains competitive advantage and drives the potential market share. As we have seen the social networking market which was already captured by Myspace, Orkut and many other sites, but Facebook with more focus on cultural trends and innovative technology hit the market and now leading the social networking market in throughout the world.
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