Developing a product is a challenging and drawn-out process. A well-planned and perfectly implemented new product development process can generate leads for a company, make customers switch from competitors and create both tangible and intangible wealth for the business.
The new product development process
- Idea generation
The first step in the New Product Development (NPD) process is to come up with ideas that are feasible, viable, and implementable. To do this, companies can conduct:
- SWOT analysis: This stands for Strength, Weakness, Opportunity, Threats. Here, you need to analyze what your internal strengths and weaknesses are. You need to ask yourself what opportunities you can create for yourself in the market and what existing opportunities you can take advantage of. Finally, you need to check what/who your potential threats are and see whether you have the resources to combat these threats or not.
- Market research: Both primary and secondary research is extremely beneficial when in the idea generation phase. Understanding how the current market is, where it’s headed, and what customers want can help companies come up with great ideas.
- Idea screening
Once you have all your ideas in place, you need to screen out the bad ideas from the good. Not all ideas will be viable for your company and in these cases, it’s best to analyze your current standing to come to a definite conclusion. One type of analysis that you can conduct is:
- PESTEL analysis: This is an external environment analysis model; it stands for Political, Economic, Social, Technological, Environmental, Legal Analysis. Check how your company fares in all these categories and use the inputs to come up with product ideas which can be supported by your existing capabilities.
- Concept development and testing
Once you have zeroed in on your idea, develop the complete concept in detail. Work out all the facets of the idea such as – the materials to be used, the process to be used, the usefulness of product to the customer, the method of usage and disposal, maintenance and so on.
Next, you can conduct focus group studies to introduce your concept to the market and check how it is being received by potential customers. This will help you understand whether this product is worth pursuing or not.
- Product designing
Next comes the design stage where you’ll need to design the external and the internal aspects of the product. Aspects such as functionality and ease of use also need to be planned and an ergonomically-designed product must be developed.
CAD/CAM software can be used to design the products.
- Test batch production
Instead of producing the product in mass, manufacture a small batch that you can test in the market. Ensure that you follow the exact same processes that you intend to follow when producing in mass.
- Market testing
The products you produce in the test batch are prototypes of the final product. Subject these prototypes to the same marketing mix as you would the final product. This means, your prototype should have the same pricing and the same distribution and promotion strategies as the final product.
Once you place this prototype on the market, you’ll be able to understand how the final product will fare and you’ll be able to take the right decisions.
- Product and strategy modifications
After the market testing, you’ll be aware of the changes that need to be made to both the product and the marketing strategy. These modifications need to be implemented at this stage.
If needed, you can subject the modified product to another round of market testing to check its performance in the market.
- Product launch
Finally, once the product has been perfected, you can go ahead and launch the product officially on the market.