Product innovation is the creation and subsequent introduction of a good or service that is either new, or improved on previous goods or services. This is broader than the normally accepted definition of innovation to include invention of new products which, in this context, are still considered innovative.
Product innovation is defined as:
the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products
Thus product innovation can be divided into two categories of innovation: development of new products, and improvement of existing products.
New products and services are the lifeblood of successful businesses – and yet over 80 percent of new products fail.
Even successful launches do not always result in top-line growth.
New product development
New product development describes the complete process of bringing a new product or service to market. There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis.
Improvement of existing products
This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use. Product innovation often takes place when a product's sales are in decline. This is an obvious and commonly used method to extend the life of a product.
- Policy Studies Institute, University of Westminster. "Small Firms' Innovation". Retrieved 27 May 2010.
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