NEW PRODUCT PROCESS

A.J C. LAURENTE
NEW PRODUCT DEVELOPMENT PROCESS

PRODUCT DETAILED COMMERCIA-

IDEATION DEFINITION
PROTOTYPING
DESIGN
VALIDATION
LIZATION
IDEA GENERATION
IDEA GENERATION

• Idea generation is an intended search aimed at finding new

product development opportunities. It usually means coming up
with a list of ideas or multiple versions of a single idea to be
examined. It consists of such steps as identifying criteria for
choosing the best one, listing all the ideas, finding the most
appropriate one from the list and then, developing that idea to be
usable.
WHERE TO GET IDEAS?
1. Listen to your customers.
• Reviews
• Feature requests
• Forums & discussions
WHERE TO GET IDEAS?
2. Watch out for trends
• Tiktok, Instagram
• Borrow ideas from whole new sources
WHERE TO GET IDEAS?
3. Try new markets
WHERE TO GET IDEAS?
4. Check your UX/UI Designer, Researcher
WHERE TO GET IDEAS?

5. Brainstorm with your team.

 Don’t forget: developing new ideas is a meticulous
search for new product development opportunities.
Streamline ideas coming from different sources!
STEP BY STEP APPROACH TO NEW PRODUCT
DEVELOPMENT
STAGE 1 – IDEA GENERATION
Emphasize on customer problems.
1.Personal problems
2. Qualify each of the listed problems
• Take a look at these aspects: unworkable, unavoidable, urgent, &
underserved
3. Come up with possible solutions
4. Narrow down the problems and solutions
STAGE 1 – IDEA GENERATION
Emphasize on customer problems.
1. Personal problems
• Understand the story behind the problems that your potential
customers are facing
2. Qualify each of the listed problems
STAGE 1 – IDEA GENERATION
Emphasize on customer problems.
• Take a look at these aspects:
• Unworkable – will your product fill in the existing CX gaps?
• Unavoidable – is the problem your product will address unavoidable to
the extent that creating it is mandatory?
• Urgent – is the problem urgent that needs a solution asap?
• Underserved – is there no product available to address the existing
problem?
STAGE 1 – IDEA GENERATION

Emphasize on customer problems.

3. Come up with possible solutions
STAGE 1 – IDEA GENERATION

4. Narrow down the problems and solutions

• Replicate – create a similar product to your competitors but launch
it in a new market condition.
• Re-purpose – revamp an existing business model
• Upgrade – introduction of a better business model than the existing
one
STAGE 2 – IDEA SCREENING

Screen your ideas

• Choose the one idea with the highest potential for success
• SWOT Analysis is a good practice in shortlisting ideas.
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

1. Quantify Gain/Pain Ratio

2. Conduct a Competitor Analysis
3. List Down the Major Product Features
4. Create a Value Proposition Chart
5. Concept Testing
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

1. Quantify Gain/Pain Ratio

• Evaluates the potential benefits (gain) and drawbacks (pain) by
assigning weights to each factor and calculate the balance.
• Gain – benefits of the product to the customer
• Pain – the pain and the cost to the customer in order to adapt to the
new product
• >1 – gain outweighs the pain; <1 – pain outweighs the gain
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

2. Conduct a Competitor Analysis

• List your competitors
• Identify their strengths and weaknesses – products offered, marketing
strategies, target market, pricing, etc.
• Check if there is “white space”
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

White Space
• A place where a company might have room to maneuver in a crowded
playing field
• White space = opportunity
• An area with lack of products, untapped
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

3. List Down the Major Product Features

• How is it an innovative feature?
• How is it going to solve a problem?
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

4. Create a Value Proposition Chart

• Value Proposition is the value a company promises to deliver to
customers should they choose to buy their product.
STEP 3 – CONCEPT DEVELOPMENT & TESTING
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

For students

Who always carry heavy school bags

causing pain in their shoulders and
back

KP bags can ease their back

& shoulder pains

Through its innovative

design

and use of lightweight

materials.
A value proposition tells a customer the number one reason why
a product or service is best suited for that particular customer.
STAGE 3 – CONCEPT DEVELOPMENT & TESTING

5. Concept Testing
• Present your product idea to a set of selected customers.
• Get their insights.
STAGE 4 – MARKET STRATEGY & BUSINESS ANALYSIS

1. Mc Carthy’s 4Ps of Marketing for New Product Development

• Product
• Price
• Promotion
• Placement
2. Analyze development and production costs and determine the
product’s potential profitability.
 STAGE 4 – MARKET STRATEGY & BUSINESS ANALYSIS
Category Meaning Purpose
Product Finalize the product based on the concept testing report Product Design
Branding Strategy
Level of services offered
Price Strategize around product licensing cost, estimate profit Pricing Strategy
margins, and create an unbeatable marketing strategy Discounting Policies
Payment Modes
Promotion Distinguish the new solution from others by highlighting Balancing advertising, marketing, and public
the hero point or unique feature relations strategy
The mediums to reach out to the target
audience
Maintaining a fair to-and-from customer
communication frequency limit
Placement Communicate how it solves the key problems of the Finalizing product distribution strategies
customer Defining the product’s scope, i.e., local vs
Global
STAGE 4 – MARKET STRATEGY & BUSINESS ANALYSIS

2. Analyze development and production costs and determine the

product’s potential profitability.
• Identify the base price
• Cost-Based Pricing Model
• Market-Focused Pricing
STAGE 4 – MARKET STRATEGY & BUSINESS ANALYSIS

Cost-Based Pricing Model

• Initial production cost is added to the markup percentage to come up with
the new product’s final price.
• Cost-Plus Pricing Formula
• Price = Cost X Desired Profit Margin
• Price = Cost + Desired Profit
STAGE 4 – MARKET STRATEGY & BUSINESS ANALYSIS

Market Focused Pricing

• Price Above Market - A higher price is suitable when proceeding with New
Product Development initiatives that solve an urgent problem of the customers.
• Copy Market - Selling the new product at the same price as the competitors.
• Price Below Market - A lower price bracket than the competitor.
STAGE 5 – PRODUCT DEVELOPMENT

Prototype
• A visual representation of the product
STAGE 6 – DEPLOYMENT

Product is available and is ready to use by the end-users

STAGE 7 – MARKET ENTRY/COMMERCIALIZATION

• Introducing the new product in the market

• Marketing activities are in place