New Product Development
Idea Generation
The first stage of the New Product Development is the idea generation. Ideas come from
everywhere, can be of any form, and can be numerous. This stage involves creating a large pool of
ideas from various sources, which include
Internal sources – many companies give incentives to their employees to come up with
workable ideas.
SWOT analysis – Company may review its strength, weakness, opportunities and threats and
come up with a good feasible idea.
Market research – Companies constantly reviews the changing needs, wants, and trends in
the market.
Customers – Sometimes reviews and feedbacks from the customers or even their ideas can
help companies generate new product ideas.
Competition – Competitors SWOT analysis can help the company generate ideas.
Idea Screening
Ideas can be many, but good ideas are few. This second step of new product development involves
finding those good and feasible ideas and discarding those which aren’t. Many factors play a part
here, these include –
Company’s strength,
Company’s weakness,
Customer needs,
Ongoing trends,
Expected ROI,
Affordability, etc.
Concept Development & Testing
The third step of the new product development includes concept development and testing. A
concept is a detailed strategy or blueprint version of the idea. Basically, when an idea is developed in
every aspect so as to make it presentable, it is called a concept.
All the ideas that pass the screening stage are turned into concepts for testing purpose. You
wouldn’t want to launch a product without its concept being tested.
The concept is now brought to the target market. Some selected customers from the target group
are chosen to test the concept. Information is provided to them to help them visualize the product.
It is followed by questions from both sides. Business tries to know what the customer feels about
the concept. Does the product fulfil customer’s need or want? Will they buy it when it’s actually
launched?
Their feedback helps the business to develop the concept further.
Business Strategy Analysis & Development
The testing results help the business in coming up with the final concept to be developed into a
product.
Now that the business has a finalized concept, it’s time for it to analyse and decide the marketing,
branding, and other business strategies that will be used. Estimated product profitability, marketing
mix, and other product strategies are decided for the product.
Other important analytics include Product Development, Branding Marketing, Marketing Mix,
Competition of the product, Costs involved, Pricing strategies, Breakeven point, etc.
Product Development
Once all the strategies are approved, the product concept is transformed into an actual tangible
product. This development stage of new product development results in building up of a prototype
or a limited production model. All the branding and other strategies decided previously are tested
and applied in this stage.
Test Marketing
Unlike concept testing, the prototype is introduced for research and feedback in the test marketing
phase. Customers feedback are taken and further changes, if required, are made to the product. This
process is of utmost importance as it validates the whole concept and makes the company ready for
the launch.
Commercialization
The product is ready, so should be the marketing strategies. The marketing mix is now put to use.
The final decisions are to be made. Markets are decided for the product to launch in. This stage
involves briefing different departments about the duties and targets. Every minor and major
decision is made before the final introduction stage of the new product development.
Eight steps of New Product Development
1. New Product Strategy – Innovators have clearly defined their goals and objectives for the
new product.
2. Idea Generation – Collective brainstorming through internal and external sources.
3. Screening – Condense the number of brainstormed ideas.
4. Concept Testing – Structure an idea into a detailed concept.
5. Business Analysis – Understand the cost and profits of the new product and determining if
they meet company objectives.
6. Product Development – Developing the product.
7. Market Testing – Marketing mix is tested through a trial run of the product.
8. Commercialization – Introducing the product to the public.
Portfolio And Project Management for New Product Development Benefits
• Align and prioritize all products based on business strategy to maximize your return on R&D
investment.
• Maintain an optimum product pipeline by continuously analyzing, simulating and
restructuring the product portfolio.
• Allocate resources amongst competing products to maximize performance.
• Improve visibility into the entire product life-cycle for more informed, real-time decisions.
• Reduce product cycle time and time to market by optimizing cross functional integration on
projects.
• Ensure environmental, safety and regulatory compliance through standard methods and
processes.
