New Product Development

New Product Development Process

The primary processes of new product development include idea generation, idea screening, concept development, concept testing, marketing strategy, and commercialization.

New product development: Idea generation

Idea generation, often known as the systematic search for new product ideas, is the first step in developing new products. The most important sources of new product ideas come from inside and outside the company in the form of consumers, rivals, distributors, suppliers, etc.

New product development: Idea screening

The production of a significant number of ideas is the objective of the idea-generating process. Oftentimes there may be too many ideas generated. Some ideas will have to be prioritized, others not. Thus idea screening comes in handy.

New product development: Concept development and concept testing

After the company has come up with ideas and chosen the right one, it must develop a product concept.

After the company has developed the concept, it must test it before increasing production and aiming for a larger market.

Before developing them into tangible new goods, many businesses first put potential new product ideas through rigorous customer testing. A word or visual description may be adequate for specific idea examinations. However, marketers may improve the dependability of the concept test by presenting the concept in a more solid and tactile manner.

New product development: Marketing Strategy

The next step includes developing a marketing plan and an initial marketing strategy for releasing the new product into the market.

The marketing strategy is divided into three sections as follows:

1. The first section describes the target market, the anticipated value proposition, sales, market share, and profit targets for the first few years.

2. The second section of the description provides an overview of the product's anticipated pricing, distribution, and marketing expenditures for the first year.

3. The long-term sales objectives, profit targets, and marketing mix strategy are part of the third section of the marketing strategy.

Product development

The next step in the process is product development.

This is the part where the R&D team and other relevant teams come together to develop the product's physical form.

New product development: Test marketing

The following phase, test marketing, is the stage during which the product and its intended marketing program are examined in actual market conditions.

If the product is successful in both the idea and product tests, it is ready for the test marketing stage. Test marketing aims to familiarise the marketer with the process of selling a product before the marketer goes through the enormous expenditure of a complete introduction.

It allows the organization to evaluate the product and its complete marketing program, including advertising, distribution, pricing, branding and packaging, target markets and positioning strategies, and budget levels.

New product development: Commercialisation

Commercialization is the final phase of new product development. Information management needs to make a final choice on whether or not to launch the new product obtained via test marketing. If the business decides to go through with commercialization, which means releasing the new product into the market, it will be required to bear significant expenditures.

Stages of New Product Development Overview

As a recap, the stages of new product development are as follows:

• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy development
• Business analysis
• Product development
• Test marketing
• Commercialization

Idea Generation in New Product Development

Idea generation in new product development is the first phase of producing new products. This step is also often called the systematic search for new product ideas. Consumers, competitors, distributors, and suppliers are essential sources of new product ideas. Marketers may find the most important sources of new product ideas inside and outside their organization. There are four primary sources of idea generation:

• Internal sources. The firm can uncover new ideas via the process of formal research and development by using internal sources. Many companies invest vast amounts of money into research and development, which helps them learn more about new product needs and develop them accordingly.

• External sources. Businesses can get valuable ideas for new products from any one of a variety of external sources. Distributors and suppliers, for instance, could have some suggestions to give. Because of their proximity to the market, distributors are uniquely positioned to relay information on consumer concerns and product opportunities. The firm may learn about new ideas, methods, and materials from its suppliers, which it can then incorporate into the development of new products.

• Competitors. The company's rivals are also a very significant source. Businesses should keep an eye on their rivals' communications campaigns and marketing strategies to learn more about their upcoming products.

• Crowdsourcing. Many businesses are now developing what is known as crowdsourcing or open innovation, a new method that gets customer feedback and then uses that information to drive innovation.

Advantages and Disadvantages of New Product Development

There are many advantages and disadvantages of new product development.

The main advantages of new product development include:

• Seizing opportunities - As the preferences and interests of customers change over time, new product development may assist businesses in capitalizing on possibilities to market to these evolving tastes and interests.

• Keeping pace - In a world where most customers cannot keep up with the rapid introduction of game-changing innovations, a product line that remains unchanged over time may seem worn out and stale to consumers. With new product development, a company may stay relevant in today's ever-evolving market.

The main disadvantages of new product development include:

• Risk - Instead of venturing into uncharted ground, companies may stay with a market they already know. When launching new products to the market, there is a great deal of unpredictability involved, from working out the characteristics of untested manufacturing procedures to presenting clients with options they may or may not desire.

• Cost - New product development may be pricey. Companies need to come up with the idea generation process, develop the concept design, and then make the physical aspect of the product. Additionally, companies should spend significant money on test marketing. All these aspects ad costs.

New Product Development Examples

Some examples of new product developments are as follows.