Generating New Products .
Because products die; because products must be weeded out and replaced; because firms
generate most of their revenue and profit from new products—product selection, definition, and design take place on a continuing basis. Consider recent product changes: TV to
E—IDTV, radio to satellite radio, coffee shops to Starbucks lifestyle coffee, traveling circuses
to Cirque du Soleil, Iandlines to cell phones. cell phone to iPhone: Walkman to iPod, mops to
Swiffers—and the list goes on. Knowing how to successfully find and develop new products
is a requirement.
Contribution is defined as the difference between direct cost and selling price. Direct costs are labor and
material that go into the product