5.15:
New Product Development – Process
The new product development or NPD process is a systematic, phased approach to creating and introducing innovative offerings to the market. It consists of distinct stages.
Idea generation marks the inception, where innovative ideas are brainstormed.
Diverse external sources like distributors, customers, and competitors, and internal sources like research and development contribute to new product ideas.
Brands also seek input and suggestions from various individuals using online platforms through crowdsourcing.
The second stage is idea screening, where the ideas having strong potential are identified while others are eliminated.
The next stage is concept development and testing, where product concepts are developed and tested to seek initial feedback from customers.
After this, the marketing strategy development phase outlines product positioning, branding, and promotion plans.
The business analysis stage assesses the product's economic viability and potential profitability, and then the brands craft a prototype in the development phase.
This prototype is used for test marketing to gather real-time user feedback for possible adjustments.
Finally, the commercialization phase encompasses full-scale production, marketing, and product distribution.
5.15 New Product Development – Process
The new product development (NPD) process typically consists of seven key stages:
- Idea Generation- In this stage, ideas come from various sources, including customers, competitors, employees, suppliers, or market research, to create a large pool of ideas for new products.
- Idea Screening: In this stage, the generated ideas are evaluated for viability, considering market potential, feasibility, and alignment with the company's goals and resources.
- Concept Development and Testing: The selected ideas are developed into product concepts and then tested among target consumers for initial feedback.
- Marketing Strategy Development: A detailed marketing strategy for the new product is developed here, including targeting, positioning, and marketing mix.
- Business Analysis: This stage evaluates the commercial viability of the new product based on estimated sales, profits, costs, and the break-even point.
- Product Development and Test Marketing: This stage transforms the concept into a physical product by creating a prototype tested in a limited market area to assess consumer response and make necessary alterations.
- Commercialization: If the test results are positive, the product is launched into the market, which includes decisions about the time and location of the launch.
Each stage is crucial in minimizing risk and increasing the probability of success for the new product.