Scribd
Upload
316 views

New Product Development Process

The new product development (NPD) process typically involves 8 stages: 1) Idea generation, 2) Idea screening, 3) Concept development and testing, 4) Marketing strategy and development, 5) Business analysis, 6) Product development, 7) Test marketing, and 8) Commercialization. The goal is to take a new product from concept to market. Not all products go through every stage, as some may be skipped or combined. The process helps organizations improve and update their product lines to maintain or grow market share in the face of competition.

Uploaded by

AfiaSiddiqui
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
316 views

New Product Development Process

The new product development (NPD) process typically involves 8 stages: 1) Idea generation, 2) Idea screening, 3) Concept development and testing, 4) Marketing strategy and development, 5) Business analysis, 6) Product development, 7) Test marketing, and 8) Commercialization. The goal is to take a new product from concept to market. Not all products go through every stage, as some may be skipped or combined. The process helps organizations improve and update their product lines to maintain or grow market share in the face of competition.

Uploaded by

AfiaSiddiqui
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

New Product Development Process:

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. New product development (NPD) is the term used to describe the complete process of
bringing a new product or service to market. Companies typically see NPD as the first stage
within the overall strategic process of product life cycle management used to maintain or
grow their market share. Products go through the stages of this lifecycle and will eventually
have to be replaced.
The Process:
One thing to keep in mind is that not all products go through all the stages in the process.
Some stages may be skipped or some combined together, depending on the product and the
organizational practices. Yet this remains the most comprehensive model for the product
development process.
1. Idea generation: (Often called the fuzzy front end of the process)
But where do organisations get their ideas for NPD? Sources include employees, competitors,
customers, distributors and suppliers. Ideas for new products can also be obtained from basic
research using a SWOT analysis, Market and consumer trends, company's R&D department,
focus groups, corporate spies, trade shows etc.
2. Idea Screening:
The objective is to eliminate unsound concepts prior to devoting resources to them. Pursuing
non feasible ideas can clearly be costly for the company. This stage is also termed a GO/NOGO gate since products are either allowed to move on to the next stage (GO) or eliminated
(NO-GO).
3. Concept Development and Testing:
Once an idea or concept is selected, it needs to be taken to the target audience. Questions like
what will customers think about the idea, will it be practical and feasible, will it offer the
benefit that the organisation hopes it will, are some issues overlooked, how will the product
be produced most cost effectively etc. should be looked after. Note that the idea and concept
is not a working prototype at this stage.
4. Marketing Strategy and Development:
Marketing strategy and development stage deals with how the product/service idea will be
launched in the market. A proposed marketing strategy will consist of the marketing mix
strategy of the product, the segmentation, targeting and positioning strategy sales and profits
that are expected.
5. Business Analysis:
The marketing strategy may seem 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, the costs, target market shares, breakeven point and the expected life of the
product.

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.
7. Test Marketing:
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. The product and its packaging
are tested in typical usage situations. Focus group customer interviews are conducted and the
product is introduced at promotional events like trade shows.
8. Commercialization:
If the test marketing stage has been successful then the product will go for launch. Certain
factors like timing, product launch strategy, place of product launch, advertisements and
promotions, distribution pipeline, national roll out or region based entry etc. are decided
during this final phase.

You might also like