In the world of business, everything should be well researched and planned. Introducing a brand new product is no exception to that rule.
Preparing for a new product to hit the market should be anything but random. There is a defined new product development process that is translated into clear steps. For budding entrepreneurs, this may be a baffling mission. However, following this product development strategy guarantees the best results when the product reaches the final stage and faces the market.
What Is the New Product Development Process?
The new product development definition is a process which involves a number of steps that should be done before introducing a new product to the market. It includes all product development stages starting from the idea phase to the launching phase.
The 7 Stages New Product Development Process
Step#1: Idea Generation
The first step in the product development cycle is idea generation which us a lot like brainstorming. At this phase, the goal is to collect a pool of innovative concepts and ideas. Any great invention or product starts with a brilliant idea. Coming up with ideas can be tricky. However, the search can start at home. Almost 55% of all new product ideas come from internal sources according to one study. Ask your employees, especially those in direct contact with your customers.
What do they think your customers need? Do they have a specific frequent request? What are their complaints usually about? The answers to such questions can inspire you to come up with good and practical ideas. Another great source is your customers themselves. The best way to know what the customers need is by asking them. Listen to their feedback, conduct surveys and gather up information that can help you develop new ideas.
In addition to these two sources, SWOT analysis is a considerable way to create ideas. SWOT analysis is identifying your company’s strengths, weaknesses, opportunities, and threats. By comparing these to your competitors and to the market needs as well, you will have some ideas of what your next product should be.
Step#2: Idea Screening
The second step of the new product development process is built on the first. You have gathered now as many ideas as you could, put them in a list. Now it is time to cross out inadequate ideas from that list. Filtering your ideas means you have to evaluate each one of them based on specific factors. ROI, affordability, and market potential are three major factors that should determine the utility of these product ideas.
ROI is an equation that measures how profitable an investment is by dividing the net profit by the amount of money invested in that product. You can guess what affordability is. Yes, it is whether or not your budget allows turning this idea into a real product. Finally, the market potential is the estimated sales revenues of the product when it reaches the market. Rating your ideas according to these three factors will give you an insight into the best handful of ideas. The appropriate decision-makers should select the most useful idea
Step#3: Concept Development and Testing
The second step’s main goal was to find out the best “product idea.” The third step of new product development process aims to turn this product idea into a product concept. What is the difference between both? A product idea is an idea for a product that the company can see itself marketing to customers; meanwhile, a product concept is a detailed version of the idea stated in meaningful consumer terms.
Having created a properly designed concept, the trial is the right thing to do next. If the concept has been properly designed, the consumer should be able to visualize it. Introduce your concept to a small sample of consumers, and examine your concept. Do consumers understand what it is? Is it useful? Is it what they expect from your company? These are important questions that you should investigate your product. Modify your concept accordingly and try to keep testing every version of your concept till you reach the best outcome.
Step#4: Business Analysis
Let’s get down to business. This phase of the new product development process is about setting up profit expectations. By now you do have a specific product concept. So, this step entails planning a detailed marketing strategy that includes determining your target consumers and defining product positioning. Product positioning is an element of a marketing plan that tackles customer needs, competitive pressures, and communication channels.
The business analysis also includes product pricing, distribution, and marketing budget. Once again, all these factors and suggested strategies must be evaluated and must succeed at meeting the company’s objectives and customer expectations.
Step#5: Product Development
At this point of the new product development process, your product is ready to become a prototype (the first version of a product.) You will have a tangible model of the product, and once again you will put it to test. It is safe to say that the whole process holds a trial and error approach. You can ask consumers for their opinion about the design, the shape, and the quality of your product. Based on their reviews you can apply some improvements and tweaks to your prototype. Your product should reach its best –possible- form before it is ready for the next step.
Step#6: Market Testing
Create more prototypes and release them in select areas, preferably those who are the closest to your target customers. Evaluate how the market responds to your product. Do customers love it? If not, why? Assess the pricing of your product, the number of sales it makes, in addition to your marketing messages. Are your marketing messages strong enough to engage your customers? Do they show the positives of your product? The target of this phase of the new product development process is to validate the concept and the whole surroundings of the product.
Step#7: Commercialization and Launch
Based on the results of market testing, you should now add the finishing touches to your product. The next step would be the final and most important step, launching. Therefore, this is your last chance to alter anything about the product: from its idea to its price and everything in between. Now it is time for launching your product. Estimate the market demand for your product accurately and launch an appropriate amount based on that. Make the necessary advertising and follow an effective marketing strategy.
Make sure your marketing covers digital channels as well. Prepare your customers for the launching of a new product. Determine when and where your product will be launched, this is crucial to your product’s success. Keep tracking your product closely, observe its numbers and analyze them. This will help you learn from any mistakes and avoid them in the future.
To Wrap Things Up
The new product development process consists of eight steps:
- Idea generation
- Idea screening
- Concept Development and Testing
- Business analysis
- Product development
- Market testing
Do not forget that launching a new product is like trying something for the first time. It includes a lot of expectations and estimations. The new product development cycle helps you create a product that matches the market’s needs. Therefore most of the stages of product development involve trying and testing the product more than once and twice to guarantee the best possible outcome. Do not limit your ideas, and do not be afraid to risk or try something new, as long as you will test it before launching.