Three new products or services for market introduction

Marketing

Every year, tens of thousands of new products are launched worldwide. Three new products that have appeared in the past year are the iPhone 3GS, Nestle Drumstick Lil' Drums and an entire line of single estate espressos under the Black Cat Project label from Intelligentsia Coffee & Tea Inc.

The iPhone represents an improvement to an existing product. There have been for a few years previous variants of the iPhone product. The 3GS is the latest incarnation. Apple touts the product as having several improvements over previous models, including those with respect to video recording, a better camera, faster speed, voice control, a compass, a landscape keyboard and other innovations (Apple Inc., 2009).

Apple likely faced many challenges in the development of this product. The existing product has strong loyalty, which increases the risk of rejection of the new variant is not up to consumer expectations. There was also substantial risk in that the company needed to continue selling the old version until just prior to the launch of the new version. Many customers would ultimately be stuck having purchased an old version only weeks or months before the new version is released, leading to discontent. When the iPhone is exported to other parts of the globe, there are a handful of potential social or ethical issues. Of importance is that the camera and video functions may in some cases violate social norms, particularly in conservative Muslim countries where images of people are considered taboo.

The Nestle Drumstick Lil' Drums represent an addition of the existing line of Drumstick ice cream snacks. The products are essentially miniature versions of the original Drumsticks, which still exist. Because this extension is not dissimilar to the original, there is risk to Nestle of cannibalization should the extension not be able to hold a distinct market of its own. The company also risks taking shelf space away from itself should it not be able to convince retailers to offer a new SKU for this product. Ethically, the most significant challenge is that this product is clearly aimed at children, given the small size. While children do like ice cream snacks, there is growing concern in society about childhood obesity and calorie-rich snacks like Lil' Drums contribute to this problem. Taking such a product overseas could also open the company up to criticism that it is exporting America's childhood obesity problem.

The Black Cat line of Single Estate espressos is a combination of a new line and a line extension. Black Cat was formerly a single product. By adding an entire line of single estate variants of the line, Intelligentsia has repositioned Black Cat as an espresso brand rather than a single product. In the process, they have created an entirely new line of products, and extended the Black Cat name manifold.

This new line was created in response to pent-up demand, but there are risks with respect to brand dilution, since Black Cat was already established as the best espresso in the United States. At the same time, there was the risk of cannibalization since Intelligentsia is positioned at such a high market position so as to limit its potential market. Furthermore, with price points as high as $24/lb, these coffees are being marketed in what are essentially uncharted waters in terms of price. There was significant risk that the prices would not be accepted by the target market.