Product development and innovation for developing countries: Potential and challenges

Abstract

Purpose

Between the lack of incentives for larger international companies and the lack of resources of the local companies the majority of the people in less developed countries never benefit from new products. International companies generally offer modified product offerings to consumers in developing countries. To date, their attempts to penetrate the developing country markets have not been successful. The reasons for this failure in their attempts to succeed in these markets include the prohibitive cost of developing entirely new products for this market and the low‐income levels of the families in these countries. To succeed in developing countries, international companies have to observe and study their customers' needs and uncover the problem areas. There are many approaches available to accomplish this process including systematic innovation and the seven R's. Each approach focuses on the consumer and suggests a radical approach to developing new products. The purpose of this paper is to provide an introduction and overview of new product development in emerging countries.

Design/methodology/approach

Challenges, process, and success strategies are explored.

Findings

To succeed in developing countries, international companies have to observe and study their customers' needs and uncover the problem areas. The authors suggest an approach that focuses on the consumer and suggests a radical approach to developing new products – the limitations/constraints point of view. The single biggest constraint in developing products for less developed countries is affordability (price). Unlike the new product development process that is practiced in industrialized countries, international companies wanting to be successful in less developed countries should start with the customers' affordability and value‐added point of view and then work backwards to develop products/services for these countries.

Practical implications

International companies are provided with an approach to new product development in emerging countries.

Originality/value

New product development in emerging countries is likely to become increasingly important, and there is very little research on the topic. The value of this paper is in its overview of the challenges of new product development in emerging countries, and suggested solutions.

Citation

Chandra, M. and Neelankavil, J.P. (2008), "Product development and innovation for developing countries: Potential and challenges", Journal of Management Development, Vol. 27 No. 10, pp. 1017-1025. https://doi.org/10.1108/02621710810916277