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New Product Development Process

The document discusses the 8 stages of new product development (NPD) that organizations go through to improve and update their product lines. The stages are: 1) idea generation, 2) idea screening, 3) concept development and testing, 4) marketing strategy development, 5) business analysis, 6) product development, 7) test marketing, and 8) commercialization. Going through these stages helps ensure new products address customer needs and are viable additions to the product line. Failure to update products through NPD can lead to lost sales as competitors advance.

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Abdullah Nazari
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223 views

New Product Development Process

The document discusses the 8 stages of new product development (NPD) that organizations go through to improve and update their product lines. The stages are: 1) idea generation, 2) idea screening, 3) concept development and testing, 4) marketing strategy development, 5) business analysis, 6) product development, 7) test marketing, and 8) commercialization. Going through these stages helps ensure new products address customer needs and are viable additions to the product line. Failure to update products through NPD can lead to lost sales as competitors advance.

Uploaded by

Abdullah Nazari
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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New Product Development (NPD)

You don't have to be Thomas Edison to invent things. You may have no interest in developing
a better mousetrap or a bigger breadbox or a brighter light bulb. But that doesn't mean that
you won't need to do product or service development.

Today's businesses offer customers many choices - global choices. If you sell widgets and so
do 1000 other people, it's hard to get your name out there. Price can be a business killer to
compete on, because someone's always able to do it cheaper than you. So what's the solution?

Improving and updating product lines is crucial for the success for any organisation. Failure
for an organisation to change could result in a decline in sales and with competitors racing
ahead. The process of NPD is crucial within an organisation. Products go through the stages
of their lifecycle and will eventually have to be replaced There are eight stages of new
product development. These stages will be discussed briefly below:

Stage 1: Idea generation


New product ideas have to come from somewhere. But where do organisations get their ideas
for NPD? Some sources include:

• Within the company i.e. employees


• Competitors.
• Customers
• Distributors, Supplies and others.

Try to combine two products you have into a single package or perhaps a product and a
service, something to set your offering apart from others. If you can't think of anything, try
considering a partnership or joint venture with another company.

Stage 2: Idea Screening


This process involves shifting through the ideas generated above and selecting ones which
are feasible and workable to develop. Pursing non feasible ideas can clearly be costly for the
company.
Stage 3: Concept Development and Testing
The organisation may have come across what they believe to be a feasible sidea; however, the
idea needs to be taken to the target audience. What do they think about the idea? Will it be
practical and feasible? Will it offer the benefit that the organisation hopes it will? or have
they overlooked certain issues? Note the idea and concept is taken to the target audience not a
working prototype at this stage.

Stage 4: Marketing Strategy and


Development
How will the product/service idea be launched within the market? A proposed marketing
strategy will be written laying out the marketing mix strategy of the product, the
segmentation, targeting and positioning strategy sales and profits that are expected.

Stage 5: Business Analysis


The company has a great idea, the marketing strategy seems feasible, but will the product be
financially worthwhile in the long run? The business analysis stage looks more deeply into
the cash flow the product could generate, what the cost will be, how much market shares the
product may achieve and the expected life of the product.

Analyze the potential success by asking some of your customers what they think. You don't
need to do anything formal, just do some informal polling with the people who come in the
door or through your opt in newsletter. Give them a couple of different options and ask them
which one they'd buy if they were in the market for whatever you are selling.

Stage 6: Product Development


Finally it is at this stage that a prototype is finally produced. The prototype will clearly run
through all the desired tests, and be presented to the target audience to see if changes need to
be made.

If you're packaging products or services together that already exist, the job is mostly done for
you. However, you will still want to consider branding them as their own item. A simple
example is the combination of 3 simple products (a burger, fries, and soft drink) into another
product that is separately branded (a McDonald's Happy Meal).
Stage 7: Test Marketing
Test marketing means testing the product within a specific area. The product will be launched
within a particular region so the marketing mix strategy can be monitored and if needed, be
modified before national launch.

Is business growing stale? Want to breathe new life into your product line-up? Consider
becoming an "inventor" and developing ideas to help you sell more products. You may want
to think about:

Packaging two products together

Finding joint ventures of complimentary products

Offering your product as a way for other people to start a business

Finding a new use for your product

Selling unassembled do-it-yourself version

Take your business in new directions by developing new ways to market and sell your products.

Stage 8: Commercialization
If the test marketing stage has been successful then the product will go for national launch.
There are certain factors that need to be taken into consideration before a product is launched
nationally. These are timing, how the product will be launched, where the product will be
launched, will there be a national roll out or will it be region by region?

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