Meaning of Product Innovation
Such changes made in a product that completely replace the product and present it in a new form is called product innovation, such as the radio and transistor maker gave birth to television. In other words, it can be said that product innovation does not only make visible changes in the product, but some such new features are created in it so that the new product is engaged, the pace of product innovation is very fast in developed countries but in developing countries. The pace of product innovation is slow.
Reasons for Product Innovation
It is clear from the above discussion that now more and more attention is being paid towards product innovation. It will not be an exaggeration if we say that product innovation is a must for business. Here the main reasons are being described which have compelled the manufacturers to innovate the product. The reason is the following
(1) In order to increase the business, new products are necessary for business growth. It is often seen that the same industries that have focused on product development have been able to progress and are conscious of product innovation. Peter Drucker has given two basic functions of business enterprise – first, marketing and second, innovation In fact, business growth is not possible without the development of new products.
(2) Increasing competition in modern times has also forced manufacturers to pay attention to product innovation in order to face the competition. Today a manufacturer can face competition only by taking interest in the novelty of the consumers. To avoid price competition, a manufacturer has to present its product in different forms so as to make that product different from the competition in the eyes of the customers.
(3) Adoption of technology or technological development – Due to continuous scientific and technological progress, product innovation has also become necessary. When a product is technically improved and introduced in the market, then other companies also have to make necessary changes in their products. For example, now all the watch making companies have started taking care of the leak proof of the watch and have started arranging the date and day etc. Similarly, radio and transistor have been replaced by television in the country. The demand for television is increasing continuously in the country. Therefore, product innovation is of great importance for companies making radio and transistors.
(4) Market change is also a reason for product innovation to make a market change. Today the tastes and habits of the customers are changing rapidly. Especially in fashion items, the market change is happening very fast. In such a situation, it is necessary for the manufacturer to resort to product innovation in order to maintain itself in line with the requirements of the market. (5) Product innovation is done to make optimum use of the institutions sometimes to make good use of the resources. For example, if an organization saves some waste material from the production work of an item, then a new product can be manufactured by it.