In business and engineering segment, new product development refers to the process of creating and bringing a fresh product to the market. It is also referred to as NPD. There are several distinct and analytical stages of new product development which are discussed as follows.
- The creation of a new product initiates with an idea. It is the first step towards a new product development which is known as idea generation. The ideas are generated from many dimensions. One of the prominent dimensions is the SWOT analysis. Since this initiative analyses the current market and industry conditions, hence it results is the proposal of the ideas that are yet to be introduced in the market. The focus is given to customer needs and wants. In doing so market research is extensively performed along with gaining suggestions through feedbacks and surveys. It also involves looking in to the competitor success and failures.
- The next stage is to screen the ideas for viability. The screening process is performed based on return on investment, affordability, current market statistics and potential. This is a crucial step in order to prevent a product failure scenario due to the investment involved.
- The next phase is development of concept and testing. Just clearing the screening phase is not enough to take the final decision. In this phase a small group of real customers are targeted to give feedback regarding the concept. This phase helps in understanding the fact that the customers can relate to the idea. Their understanding is crucial in this stage. It also helps in modifications and additions to the present idea.
- After finalizing the concept, a thorough business analysis is necessary to understand the profitability quotient of the concept. It includes elements such as marketing strategies, chalking out the target customer base, product positioning and marketing mix. In this stage the probable demand of the product is analyzed with reference to costs, competition and break even mark.
- After the approval, the concept is passed on to the development and marketing people. The operational people create a prototype of the product in a limited amount. This makes it easier to understand the product features and functionalities in a better way. It paves the way for consumer testing and gaining feedback on the features and packaging.
- Next up, the prototype goes on for market testing. It is a different process than consumer testing. In this, the product is introduced based on the decided marketing plan to a certain segment. This helps in validating the entire process of the product and its marketing strategy as a whole.
- After the development and validation of the concept, the final decision regarding the production of same is taken. The pricing details and marketing plans are finalized. The sales teams are updated with the details related to the product so that the final phase can be carried out smoothly.
- The product after is commercial development is launched in to the market. The launching agenda is planned before hand for gaining maximum impact. As a part of the final review, market performance analysis is performed just after the launch.