In today’s rapidly changing business environment, product innovation is one
of the keys to a company’s survival and competitiveness. Manufacturers can
no longer produce and market large volumes of standard products with a
relatively stable market and technological climate. There has been a shift
toward unstable, rapidly changing markets and technologies. To implement
market-driven management across the organization, measurement and cost
control systems must be designed to motivate the desired consumer-oriented
behavior. The strategies that determine the direction of product innovation
have become crucial to corporate management. Industrial marketers play a
major role in product innovation, and cost accounting must support this role.
Cost management methods must help with the production of new products
which meet customer demands at the lowest cost, as well as with cost
reduction of existing products by eliminating waste.