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Chapter 11. Building Your Context Plan > New Product Introduction Lifecycle

New Product Introduction Lifecycle

New product introductions can have serious effects on cash flow. A company’s customers often know when a new product is going to be introduced in a marketplace. When a new product is coming out, many customers put off their purchase of the product in anticipation of the next release or a newer model. Revenues drop. Many customers also don’t want to be the first to buy the new product in case there are software bugs, mechanical issues, or other problems. This hesitation further delays revenue and related cash flow. At the same time that customers are not buying the product at the levels they were previously, the company has to put out large sums of money to promote the new product. This additional marketing and sales expense further depletes cash.

New product introductions can be a very stressful time for a company, but these introductions typically follow a defined pattern within a fiscal year.


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