New products can fall into one of several categories. These categories are defined by the type of market the product is entering (i.e., newly created, existing but not previously targeted, existing and targeted ) and the level of product innovation (i.e., radically new, new, upgrade).
- Creates New Market with Radically New Product or Product Line – This category is represented by new breakthrough products that are so revolutionary they create an entirely new market. A relatively recent example can be seen with evolution of ridesharing services, such as Uber and Lyft. Highly innovative products are rare so very few new products fall into this category
- Enters Existing But Not Previously Targeted Market with New-Product or Product Line – In this category, a marketer introduces a new product item or product line to an existing market which they did not previously target. Often these products are similar to competitors’ products already available in the market but with some level of difference (e.g., different features, lower price, etc.). Apple’s introduction of the HomePod into the existing voice-controlled smart speaker market is an example.
- Stays in Existing and Previously Targeted Market by Enhancing Existing Product or Product Line – Under this development category the marketer attempts to improve its current position in the market by either improving or upgrading existing products or by extending a product line by adding new products. This type of new product is seen in our earlier example of Procter & Gamble’s Tide product line, which contains many product variations of the basic Tide product.