WHAT IS NEW PRODUCT DEVELOPMENT ?
Product development typically refers to all of the stages involved in bringing a product from concept or idea through market release and beyond. This includes identifying a market need, researching the competitive landscape, conceptualizing a solution, developing a product roadmap, building a minimum viable product, etc.
New product planning is done with the ultimate objective to secure the long term viability of the company’s total activities and to form the basis for continued development and growth.
STAGES INVOLVED IN NEW PRODUCT DEVELOPMENT
In general, there are 7 stages involved in the development of a new product which are discussed as :-
- Idea Generation & Screening – This is the initial stage where a business sources for ideas regarding a new product from various sources such as business customers, competitors , newspapers, employees etc. This stage is very crucial as it forms the foundation for all the other phases. The generated ideas then go through a screening process to filter out the feasible ideas out of the pool of ideas generated.
- Concept Development & Testing – In this stage the enterprise conducts a market research to find out the potential costs, revenues and profits arising from the product along with a SWOT analysis to identify the strengths, weakness opportunities and threats existing in the market. In this stage, the good product ideas must be developed into detailed product concepts that are conveyed in consumer-oriented terms. This concept is then presented to the target customers & their feedback is recorded.
- Development of Market Strategy – In this step, the company tries to come up with strategies to introduce a promising product into the market. The company must therefore come up with the price, potential revenue figures as well as advertising and distributing channels in this step.
- Business Analysis – In this stage the product undergoes a business analysis to find out whether the product is financially feasible & also to access the risk factor associated with the product. It involves a review of the sales, cost & profit projections of the new product to analyse whether they satisfy the company’s objectives.
- Product Development – In this stage the product idea is actually turned into reality. The research and development department works on the product concept for many months and even years to come up with a working and functional prototype of the product concept.
- Test Marketing – The Test marketing is a tool used by the companies to check the viability of their new product or a marketing campaign before it is being launched in the market on a large scale. It allows the company to test the product and its entire marketing programme, including targeting and positioning strategy, advertising, distributions, packaging etc. before the full investment is made.
- Commercialisation – The final stage in the new product development process is commercialization which simply refers to the introduction of the new product in the market. A huge amount of investment in advertising, promotion and other marketing efforts is required to launch the product
Thus, the New product development is a crucial step for innovative companies which must be done with the primary focus of generating superior customer value and ensuring that the product is well received in the market.