Of the millions of consumers who make purchases on a daily basis, a vast majority of them remain unaware as to what a difficult and tedious new product development process each and every product had to endure before they could be in a position to place those products in their shopping carts. In order for a business or an entrepreneur to successfully introduce a product into the market, several hurdles need to be overcome, and there must be a thorough understanding of the market, consumers, and competition to ensure that the product can fill a real demand and offer satisfaction and quality to customers.
New product development examples always involve different steps and different complications that the business or enterprise had to face but from their struggles, a new product development process can be arrived at to help you avoid common mistakes and ensure that your product can penetrate the market.
What is the New Product Development Process?
New product development refers to transforming an idea into a usable software product. Identifying a market opportunity centred on customer needs, determining the idea’s feasibility, and delivering working software are all part of the New Product Development process.
The new product development process is a systematic guide for all budding businesses and entrepreneurs that will help them develop a customer-oriented, high-quality product with the best chance of doing well in highly competitive markets. In an attempt to explain the new product development process, many market experts believe that there exist 6 or 7 stages of the new product development process. This number, however, can vary based on how detailed the process is from one example to another. Read on to know more about these stages and find out the 8 steps of the new product development process.
Why do companies require New Product Development Process?
The new product development process is critical for companies because so many functions need to be coordinated. Everything from public relations and marketing to engineering and design. There are many people involved. There are a lot of dependencies between tasks. As a result, it should be obvious that having a process is beneficial. Here are a few specifics:
- Everything that needs to be done will be done because checklists detail what each function group must accomplish and when.
- Clarity is important for a fast-moving team. They have a detailed plan in place to guide their efforts.
- It ensures objectivity and creates a sense of trust and confidence.
- Communication is an important aspect of any process. Gate reviews are formal “check-ins” for the leadership of the organization. They get the necessary information, and leaders can pose questions, offer advice, and so forth.
- There is a scope for continuous improvement in a defined process.
There is no doubt that a new product development process is needed. It’s time to understand its significance and turn it into an innovation engine.
12 Stages of Product Development Process
It is important to understand that there is no one generic product development process and that each rendition of such a process will vary depending on the depth and detail that each explanation covers. This article explains 8 stages of the product development process, which are listed below.
- Idea Generation: The first stage in the product development process is idea generation. In this stage, the company comes up with many different and unique ideas based on both internal and external sources. Internal idea sources more often than not refer to the in-house research and development teams of the company and external sources refer to competitor innovations, the customer wants, distributors and suppliers, and so on. The company thereby focuses on coming up with as many feasible ideas as possible.
- Idea Screening: The next stage involves screening this often-large set of ideas. The primary objective of this stage is to focus on ideas that align with the company’s customer value and financial goals. The stage focuses on filtering out ideas that are poor or not feasible and retaining those with good potential. This is to ensure that the company does not face losses by moving ahead with fickle ideas that do not promise adequate returns.
- Concept Development and Testing: The third of the product development process steps is concept development and testing. In this stage, good product ideas must be developed into detailed product concepts that are conveyed in consumer-oriented terms. The concept must be made in order to protect the product in terms of how consumers perceive it and how it will potentially be received in the market and by which set of potential customers. This concept must then be tested by presenting it to the target consumers and their response must be considered.
- Development of Marketing Strategy: The new product development process in marketing is covered in stage four. In this step, the company tries to develop strategies to introduce a promising product into the market. The company must therefore come up with the price, potential revenue figures, and advertising and distributing channels in this step.
- Business Analysis: The product concept is put through a vigorous business analysis or test in order to ascertain projected sales and revenue and also assess risk and whether the production of the product is financially feasible. The company’s objectives are considered and if these are satisfied, the product is moved on to the next step.
- Product Development: This is the step that comes after the management of a company declares a product concept to be in line with the goals of the company and issues green light for development. The research and development wing of the company then works on the product concept for many months and even years in some cases, to come up with a working and functional prototype of the product concept.
- Test Marketing: This is the penultimate stage of the new product development process and involves testing the product and its suggested marketing program in realistic market settings. This stage provides an insight into how the product will be introduced into the market, advertised, produced, packaged, distributed, and eventually sold to the customers, and therefore any optimizations if required can be made by the company.
- Commercialization: The final step of the product development process is that of commercialization. Based on the information gathered during the test marketing process, the business management may either go ahead with the product launch or put it on the backburner. In case the go-ahead is given, the product is finally introduced into the market and this process is called commercialization. This stage often leads to massive costs in terms of initial infrastructural investments, sales promotions, and advertisements.
- Research: At this point, there are two vital things to consider: First and foremost, is there a demand for the service or product. Are there many people seeking a solution to the problem that your product solves? Do you notice a void that needs to be filled? Second, are there any products identical to yours existing on the market? If this is the case, it doesn’t necessarily rule out the possibility of your idea becoming a success; nevertheless, how will you improve on what is already available?
- Computer-aided design: Nowadays, computer-aided design is essential for the new product development process. This technique creates a computer simulation of your final design using 3D rendering software. This can help uncover any possible difficulties that were not obvious from the product design. Take advantage of this opportunity to return to the final design stage and address any issues.
- Computer-aided manufacturing and Prototype Evaluation: This is where you may witness a tangible prototype of your product that was created using a computer-aided manufacturing system. A thorough review is required for every product development process. Make sure that your testing is rigorous and thorough. Don’t be afraid to be honest with yourself about any design defects or problems since this will only help your final product be the best. Return to step 3 if necessary to iron out the kinks.
- Manufacturing and assembly: It’s time to produce your product if you made it through prototype testing without any issues that need to be addressed. Other selections, such as materials, packing lists, and the manufacturer, may be made here. Consider how to keep prices low while keeping the quality you desire to maximize revenues.
At this point, you may need to make some important decisions on additional materials. Consider prices, but keep in mind that employing ineffective materials could hurt your sales. Don’t jeopardize the quality of your work by cutting corners today.
The primary focus of the entire product development process is to generate superior customer value and ensure that the product is well received in the market. More importantly, every company needs to properly evaluate the kind of commitment that the product production calls for and whether or not such a commitment can be undertaken by it based on the financial and administrative resources available at its disposal. This 8-stage product development process is by no means an absolute structure that makes or breaks a product, but it certainly offers an excellent starting point for all businesses that are looking to launch a product into the market.
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