The New Product Development process defined
Over the years we have worked with a number Category, Innovation and Product Development managers, so understand how vitally important a smooth and well thought out New Product Development (NPD) process can be. Although different teams may approach things slightly differently, there is an overarching strategy that remains the same.
There are 8 key stages in the New Product Development process, each one as important as the next, and in an order that will ensure it has the very best chance in a sometimes challenging environment.
How can you and your teams bring a new product to market in an organised and controlled way?
1. Idea generation – innovation.
This is where product research and product development teams will bounce around new ideas that could expand the current business offering in innovation sessions. Large corporations and big brands rely heavily on their category and product innovation managers to constantly come up with new ideas that will push their brands forward. In smaller SMEs, this can sometimes fall to senior management and the marketing department.
2. Initial screening – filtering process.
The strength of the new product development process largely depends on a strict filtering process where teams can carefully evaluate which ideas are worth pursuing and those which should be discarded. Pursuing an idea that doesn’t fit certain given criteria can be costly as well as a potentially time- and labour-intensive exercise.
3. Concept development – ironing out the full scope of the idea.
This is where teams will consider the innovations’ technical feasibility, the product or services design, and the market potential. A new product concept is basically a blueprint for your idea.
4. Business evaluation – does the product align with the company’s business objectives?
The new product or service now needs to be held against the company’s business objectives and strategic plans to see if it stacks up. What is the likely demand for this new offering? What would be the cost and the potential profit margins?
5. Product development – creating a prototype or pilot service.
Theory very rarely directly translates into true life so the business will need to create a prototype product or pilot service to commit the blueprint to reality. Does the product look how it was planned? Are there additional features it may need? These all need to be worked out in the product development stage.
We often find that buyers or senior management will need to visualise how a concept will look, or peform to ‘buy in’. A great presentation that includes mock-ups, prototypes or digital walk-throughs can really aid the new development process – and help to quickly turn around these initial decision stages in the New Product Development process.
6. Market testing – modifying the product according to the market.
This stage allows the business to assess customer reaction to the product or service before entering the market. The final stage of rigorous testing ensures that the new product works not only for the consumer but also for the manufacture and support organisations. Teams will apply all elements of the marketing mix to see how the product will ‘roll out’.
7. Commercialisation – pricing the proposed product or service.
In the final pre-launch stage, the new offering will be committed to a pricing strategy for its launch. Teams will evaluate the impact of the product on their existing portfolio, the competition and their pricing, the expected lifecycle of the product and the likelihood of early adopters. Pricing strategies involve extensive research and are aligned with the overall strategic plans of the business, such as whether they adopt a market skimming or market penetration approach.
8. Product launch – introduction to the market.
Finally, after a stringent round of prototyping, testing, and business analysis – a new product’s launch begins the products life cycle. This is where marketing teams will come together to decide the elements of the marketing mix they will employ to ensure the product performs as expected. Social media campaigns utilising influencers, print ads, or even article features in targeted press – there will be a number of tactics used, largely dependent on the overall business strategy of the brand/business.
Why are product innovation and the new product development process so important?
New product development is an important aspect of business portfolio management and growth. Without innovation, companies would soon lose touch with changing consumer needs and struggle to commit to their long-term business strategies.
A constant analysis of the current market allows NPD teams to jump on innovation, which could prove a real game changer for a brand in an often-saturated market. In this digital era, it is more important than ever that New Product Development teams are looking at how they can push their portfolios to outperform the competition and add value to their consumers.