New product development fosters knowledge and information with the sole end goal of improving the performance of companies on a global scale. As nowadays, knowledge is basically the competitive edge, for which many companies in the world have hired people for the sole reason of coming up with new knowledge. The emphasis on knowledge comes from the realization that it is a necessity if a company wants to hold an edge in the market. Managing knowledge controls the overall efficiency, overall effectiveness, and the overall innovation of the firm in question. Knowledge management finds its value due to knowledge creation. Innovation is the most important pillar for a company if they want to be competitive. Companies must always expect the unexpected and should be adaptable enough in order to quickly react to the unexpected changes in the market. All of this can be easily achieved using knowledge management strategies. By looking at the ideas suggested in literature and further the models developed we can see what the main components of knowledge management are and why they are linked with innovation. Firstly, the company will need to get past the limitations their products will face in accordance with the continuously changing market demands. Only the proper use of knowledge can help meet these demands. The companies should record the knowledge they have gained via the experience. This experience should be shared in order for the employees to specialize in certain skills. It is due to this that access to the knowledge must be open to the workers. Knowledge sharing amongst the workers is an important pillar of learning and innovation and it is necessary in order to make a joint organization that can easily handle the rapid changes that occur in the market and can attain greatness. Knowledge management is crucial in new product development as it results in innovation. This is very true for organizations that deal with IT. This industry has the highest demand for innovation. They need to expect the surprises in the market, get past the flaws in their products and to also keep up with their competitors, all the while making sure that the customer needs are being met. Overcoming market threats is only possible if knowledge management is employed. Firms are stuck in environments that evolve in a very fast manner. They can only survive if they can handle and work the data they receive and to create knowledge from it. The fast change mainly occurs due to globalization. The near non-existent trading barriers and altering business practices forces companies to take action. Also the constant technological innovation causes for a shorter life cycle in product The near non-existent trading barriers and altering business practices force the companies to take action. Also the constant technological innovation causes for a shorter life cycle in product. This also causes the people to ask for improved product with multiple purposes. Knowledge management lets a firm build up competitive benefits by improving the company performance along with buffing up the item upgrades and differentiation. Knowledge management allows you to take in new knowledge and assimilate it into your existing one. Customer knowledge management is compulsory for businesses in order to take advantage from the client engagement which is also called the active involvement in innovative item/product development. Supplying customized products and improving the quality of the product is not possible without efficient customer knowledge management. Organizations face several challenges regarding customer knowledge management. Earning knowledge from outer sources is much more taxing then gaining it from internal sources like your workers and use of technology for customer knowledge management is both difficult and challenging. Gebert, et al, 2006 states that customer knowledge can be divided into three groups. The first is named as “knowledge for customers”. This relates to all of the knowledge regarding the products, the markets and the suppliers that were used in order to complete the demands of customer knowledge. The second type is called the “knowledge about customers” which was made on the basis of the study of the data and information of the clients. The third and last one was called “knowledge from customers”, this one like the name suggests dealt mostly with feedback. Customer knowledge management is usually referred to as a strategy in modern companies that allows them to change their customers from passive buyers to active participants. Sofianti, et al, 1996 states that customer knowledge management is basically about gaining, sharing and increasing the knowledge that is in the clients and using to improve both client and corporate welfare. Customer knowledge management is also a continuous procedure that generates, disseminates, and uses the knowledge that is inside a firm, and in between a firm and its clients. Figure 1 exhibits the processes involved in customer knowledge management which include customer acquisition, storage, dissemination and utilisation. Knowledge acquisition is the beginning of customer knowledge management. The collection of knowledge is important for the creation of firm memory. Customer knowledge can support things like client support services, the sales and marketing. Customer knowledge acquisition is gained from clients, is about the clients and is for the clients. The Customer knowledge is made, based on the collected experience of the items and services, marketing, sales, support of firms and the competitors. According to customer knowledge acquisition should basically be an explosive and continuous process that collects knowledge not just about the current clients but also about the clients that left, the new clients, the prospective clients and finally those who are loyal to the competition. Customer knowledge storage refers to the procedure in which the knowledge will be placed in the repositories. This procedure creates indexes for the knowledge. This is then further divided into specific requirements. Both the repositories and the knowledge map are useful when organizing and subdividing knowledge. It is clear that when knowledge is collected and then updated regularly, it can be easily shared. Customer knowledge dissemination states that the sharing of knowledge is a must to be completed condition when it comes to the development of new technology, products and items. The work of the firm can be improved when the workers share information, the best practices, the lessons learned, the insights, the experience as well as the common sense. As, noted the ability to share knowledge in between units plays a key role in the success of a project. Knowledge utilization is the most important part of customer knowledge management. This is due to the fact that all of the other outputs are collected in this one process in order to create profit for the firm. Customer knowledge utilisation is when the current knowledge about and from the customer is used to improve the client relationship, product innovation which will improve overall quality of the product. According to knowledge utilisation makes up as utilising the knowledge both for understanding client needs and the way they react. This is called “knowledge enhancing utilisation”. The development of the customer specific products, items and services is called “action oriented utilisation”. Thus, knowledge enhancing utilization has the effect of changing in the existing knowledge base and in the studying/understanding of the clients, while the action oriented utilisation leads to more solid change in activities. Figure 2 exhibits the customer knowledge management challenges. The challenges about customer knowledge management procedures are reviewed in accordance to Orlikowski theory. In all of the procedures there are company challenges, human challenges and technological challenges that need consideration by the researchers. The first step is to explain and collect knowledge from and about the customers. Customer relationship management infrastructure includes operational structure, collaborative structure, and finally social and one that can analyse all the above mentioned. Customer relationship management is the basic technology that is needed to absorb knowledge. Due to this not having these infrastructures is a great trial for customer knowledge management. It is common sense that IT software are only tools and are not solutions to problems. It is still the people who are responsible for the sharing and spreading of knowledge. In the human side of things, the main challenges faced mainly stem from lack of motivation. Be it lack of motivation to share knowledge, to communicate with the workers, a lack of competency and not having the right skills to actually take in the knowledge. Lastly there is the lack of trust and concerns about privacy barriers. Storing knowledge is the next procedure. Companies need to store and arrange the customer knowledge. For this IT is of crucial importance. Firms need to assimilate all the knowledge into their repositories and they need to appropriately map it. They need the mapping technology to map and organize explicit and tacit knowledge. Knowledge map helps us see how the knowledge moves inside the firm. Therefore, it can be seen that customer knowledge is not only helpful in arranging knowledge but also drawing new understanding from the existing knowledge. Further using it to improve products, bringing innovation and improving quality. Customer knowledge management is the ability of the firm to use the knowledge in both the concepts of knowledge enhancing utilization and action oriented utilization. Therefore, knowledge enhancing utilization has the effect of change in existing knowledge base. While the action oriented utilization results in more tangible change in activities. It is seen that amongst all of customer knowledge procedures, the most basic pillar is technology, while the human and organizational factors are necessary ones. However, in dissemination and utilization both the human and organizational factors are crucial. Lack of a proper organizational strategy, lack of a learning environment and lack of commitment to the firm are barriers for customer knowledge management. Supplying a trust worthy environment, with the right motivation and skills are human factors that are necessary. The blood and soul of new product development (NPD) is the making and use of new knowledge. This is then further used to rectify organizational problems and to make new products reach the market place. Additionally, a company can only thrive if it manages its NPD in a good way. As stated above the flow of knowledge is a must within a firm. This information creates the context for the future NPD activities. Due to this the design of NPD is directly joined with customer knowledge management. Clartk and Wheelwright, 1992 in their research concluded that firms would have better NPD performance if they were able to react to the changes in the market well before their competition could. As, defined above the NPD is basically a picture of the knowledge of the modern generation. In this work NPD is seen as the creation of new knowledge through a study of various streams of knowledge. It is now considered to be one of the most crucial functions in firms. In most industries the competitive edge arises from the fact of who reaches the market first and who can develop new products at the fastest rate. Gibbert et al, 2002 in his research displays that by controlling the knowledge of their clients, firms are able to better grasp when new market chances are available. They can reach that chance well before their competition. They can challenge the popular saying “doing things around here” and can quickly create additional economic value for the firm, the shareholders involved and last but not the least its clients. Customer knowledge management is basically about gaining, sharing and spreading the knowledge that is within the clients for both client and company benefits. Customer knowledge management despite feeling similar to both KM and CRM is different. It requires a different state of mind and other variables. First thing is that CKM focus on knowledge from the client not about the client. In simple words intelligent companies accept the clients to be a valuable source of information. Which is why they prefer to have interactions with clients while getting knowledge about them from the sales representative. Quiet similarly the traditional knowledge mangers normally pay attention only on trying to change their workers from being knowledge collectors into knowledge sharers. The article has been written and contributed by Aleeze Azhar who is an MBA student at Forman Christian College, Lahore. She can be reached at aleeze.azhar@hotmail.com and Tweets at @aleeze_azhar