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New Product Development Process

The document outlines the steps in the new product development process. It begins with idea generation using techniques like brainstorming. Ideas are then analyzed by informally polling customers. For products combining existing offerings, development is mostly complete. Testing involves seeing if people actually purchase the new product. After refining through testing, the product is fully marketed. The second document discusses the eight stages of new product development in more detail: 1) idea generation, 2) idea screening, 3) concept development and testing, 4) marketing strategy development, 5) business analysis, 6) product development, 7) test marketing, and 8) commercialization.

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Abdullah Nazari
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108 views

New Product Development Process

The document outlines the steps in the new product development process. It begins with idea generation using techniques like brainstorming. Ideas are then analyzed by informally polling customers. For products combining existing offerings, development is mostly complete. Testing involves seeing if people actually purchase the new product. After refining through testing, the product is fully marketed. The second document discusses the eight stages of new product development in more detail: 1) idea generation, 2) idea screening, 3) concept development and testing, 4) marketing strategy development, 5) business analysis, 6) product development, 7) test marketing, and 8) commercialization.

Uploaded by

Abdullah Nazari
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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New Product Development Process: Steps

to Develop New Products and Services


You don't have to be Thomas Edison to invent things. You may have no interest in developing a better
mousetrap or a bigger breadbox or a brighter light bulb. But that doesn't mean that you won't need to do
product or service development.

Today's businesses offer customers many choices - global choices. If you sell widgets and so do 1000
other people, it's hard to get your name out there. Price can be a business killer to compete on, because
someone's always able to do it cheaper than you. So what's the solution?

New product or service development: Taking your current offerings and somehow making them different
or better. Here are the steps you'll take in product development:

Idea generation. Use creative idea starters like brainstorming to help you find the ideas you're looking
for. A site like www.mindtools.com has some great thinking resources for you to improve your ability to
think outside of the proverbial box. Try to combine two products you have into a single package or
perhaps a product and a service, something to set your offering apart from others. If you can't think of
anything, try considering a partnership or joint venture with another company.

Analysis. Analyze the potential success by asking some of your customers what they think. You don't
need to do anything formal, just do some informal polling with the people who come in the door or
through your opt in newsletter. Give them a couple of different options and ask them which one they'd
buy if they were in the market for whatever you are selling.

Development. If you're packaging products or services together that already exist, the job is mostly
done for you. However, you will still want to consider branding them as their own item. A simple
example is the combination of 3 simple products (a burger, fries, and soft drink) into another product
that is separately branded (a McDonald's Happy Meal).

Testing. Although you did take a poll, polls are not always accurate. After all, you're not asking people
to actually pony up with any money! This is where the rubber meets the road and you need to find out if
people are actually willing to buy your new and improved product. Be ready to make instant changes, if
necessary, including raising or lowering the price or offering other incentives to move the product.

Marketing. After the testing stage has helped you refine your product a little more, you can move on to
actively marketing your new product on a full scale, hopefully with noticeable improvements in sales.

Is business growing stale? Want to breathe new life into your product line-up? Consider becoming an
"inventor" and developing ideas to help you sell more products. You may want to think about:

Packaging two products together.

Finding joint ventures of complimentary products

Offering your product as a way for other people to start a business.


Finding a new use for your product.

Selling unassembled do-it-yourself version.

Take your business in new directions by developing new ways to market and sell your products.

New Product Development (NPD)


Improving and updating product lines is crucial for the success for any organisation. Failure
for an organisation to change could result in a decline in sales and with competitors racing
ahead. The process of NPD is crucial within an organisation. Products go through the stages
of their lifecycle and will eventually have to be replaced There are eight stages of new
product development. These stages will be discussed briefly below:

Stage 1: Idea generation


New product ideas have to come from somewhere. But where do organisations get their ideas
for NPD? Some sources include:

• Within the company i.e. employees


• Competitors.
• Customers
• Distributors, Supplies and others.

Stage 2: Idea Screening


This process involves shifting through the ideas generated above and selecting ones which
are feasible and workable to develop. Pursing non feasible ideas can clearly be costly for the
company.

Stage 3: Concept Development and Testing


The organisation may have come across what they believe to be a feasible idea, however, the
idea needs to be taken to the target audience. What do they think about the idea? Will it be
practical and feasible? Will it offer the benefit that the organisation hopes it will? or have
they overlooked certain issues? Note the idea and concept is taken to the target audience not a
working prototype at this stage.

Stage 4: Marketing Strategy and


Development
How will the product/service idea be launched within the market? A proposed marketing
strategy will be written laying out the marketing mix strategy of the product, the
segmentation, targeting and positioning strategy sales and profits that are expected.

Stage 5: Business Analysis


The company has a great idea, the marketing strategy seems feasible, but will the product be
financially worth while in the long run? The business analysis stage looks more deeply into
the cashflow the product could generate, what the cost will be, how much market shares the
product may achieve and the expected life of the product.

Stage 6: Product Development


Finally it is at this stage that a prototype is finally produced. The prototype will clearly run
through all the desired tests, and be presented to the target audience to see if changes need to
be made.

Stage 7: Test Marketing


Test marketing means testing the product within a specific area. The product will be launched
within a particular region so the marketing mix strategy can be monitored and if needed, be
modified before national launch.

Stage 8: Commercialization
If the test marketing stage has been successful then the product will go for national launch.
There are certain factors that need to be taken into consideration before a product is launched
nationally. These are timing, how the product will be launched, where the product will be
launched, will there be a national roll out or will it be region by region?

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