Marketing Generics Application Note:

The Vitality Index, and your rate of new product development

In an increasingly competitive world, with technology cycle times getting shorter and shorter, a company’s ability to drive research which results in successful new products is a critical element.  Companies need to innovate and bring continuous flow of new products to market. New products is a function of two major activities: marketing / product marketing which identify what new products are needed and drive the NDP (New product Development) and market requirement plans; and effective R&D, aligned to creating products which buyers or potential buyers need and will pay for and can deliver those products on time and to budget. R&D spend is simply a financial ratio of how much any given company spends on R&D, but management want to know more than that – how much of the R&D spend produces new products which are launched, grow and produce new revenue streams for the company? This is what is called the Vitality Index. This Application Note explains what it is, how it’s measured, and why it’s significant.

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