Constraints on new product development

Availability of finance and resources
in highly competitive markets businesses find that their profit margins are squeezed. This means that financial and human resources are often not available to develop new products. an example of this is in the market for budget fashion clothing. businesses in this market tend to copy products developed for designer labels

Cost
even when businesses have resources, the cost of developing new products may be prohibited. the development of products in the electronics market can cost millions of dollars. as technological boundries have been pushed forward, the cost of even modest new product development has risen sharpley. also, in many markets products have increasingly shorter life spans. this means that less time is available to recover devlopment costs.

market constraints
there is little point in a business developing a new product unless consumers are prepared to purchase it at the right price ehich can cover develpoment and production costs. many so called tremendous ideas for new products have been abandaned. this is because firms believe that they cannot find a profitable market for the product. in addition, consumers can be resistant to cahnge. this is often because of the time and effort consumers need to spend in getting to know how new products work. there is also evidence that consumers are resistant to new products which represent a radical departure form existing products.

legal constraints
firms cannot develop whatever new products they wish. legislation must be taken into account. for example, a pharmaceutical company wishing to develop a new product must be sure that it adheres to health legislation.

technology
the development of technology can affect the type of product or service provided. 100 years ago computers did not exist. today they are sold in a variety of ways to different businesses. technology may also effect manufacturing processes