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6 Types of Classification of New Product Development

There are 6 types or stages of new product development suggested by Booz, Allen and Hamilton. Booz Allen & Hamilton Classification of New Product Development is one of the best, most recognised and simple 6 stage method to classify New Products.

A marketer must know the need for New Product Development. On the basis of need or problem, a marketer can design and launch the new product which may help the organization for survival as well as growth.

For any organization, it’s very important to retain customers to generate more profits. Understanding of types of new product definitely helps the marketer to retain the existing customer and add new without many efforts.

Before introducing a new product to market or making changes in existing products, the marketer must know the classification of New Products.

Bases for Classification of New Product Development

Generally, new product development can be broadly classified into two groups:

  1. Technological innovations: New products arising out of technological innovations
  2. Marketing-oriented modifications: New products arising out of marketing-oriented modifications

Dimensions of Classification of New Product development

Booz, Allen and Hamilton (1982) suggested that two principal dimensions need to consider while classifying new product development.

Newness for the company: How new is the product for the company?
Newness for the Market: How new is it to the marketplace?

Classification of New Product Development by Booz Allen & Hamilton

Below is the detailed information about the best classification of new product development given by Booz, Allen & Hamilton.

1. New-to-the-World Products

  • These types of new products create an entirely new market.


  • LiFi Technology, WiFi, Internet, Antibiotics, VR Technology, Digital camera, 3D Touch display
  • The introduction of products like Laptops and Palmtop has created a new market for mobile computing.

2. New Product Lines

  • New products may allow a company to enter an established market for the first time.


  • Philips in flat TV (after existing CTV market), Micromax TV, ITC Biscuits,
  • Philips has developed flat TV to target a new segment of already crowded CTV market.

3. Additions to Existing Product Lines

New products can supplement a company’s established product lines.


McDonald’s introduced Pudina flavoured or Masala burgers for Indian consumers.

4. Improvements & Revisions of Existing Products

  • Improved performance or greater perceived value & replace existing products
  • These are the new products that replace existing products by providing improved performance or greater perceived value.


  • MS-DOS to Windows GUI based OS – Windows 95, Windows 98, Windows 2000, Windows XP, Windows 8 & Windows 10, Maruti Suzuki Swift New Version
  • Microsoft replaced its MS-DOS with Windows as an improved, user-friendly GUI (Graphical User Interface) based operating system. They also updated Windows regularly and launched the versions of Windows 95, 98, 2000 and XP.

5. Repositioning

  • Existing products can be targeted to new markets or market segments.


  • Cadbury Gems repositioning to target adults,
  • Sahara Airlines is revising its fare to target the railway AC 2/3 tier passengers.

6. Cost Reductions

  • Similar performance at a lower cost.
  • New products may be developed that offer similar performance at a lower cost.


  • New versions of Splendor+, New cars with black colour fibre bumper, Mobile Phones
  • The mobile service providers like Airtel, Hutch and Reliance India Mobile are introducing new post-paid schemes with the low rental and outgoing facility.

Reference Books

  1. Principles of Marketing, Philip Kotler & Armstrong 11th Ed., Eastern Economy, PHI.
  2. Marketing Management, A South Asian Perspective, Philip Kotler, Keller, Koshy, & Jha, 13th Ed., Pearson.
  3. Marketing Management, Ramaswamy & Namakumari, 4th Edition, McMillan

This is all about the classification of New Product development given by Booz Allen Hamilton.