New Product Development Process in 8 Steps
Do you ever ask yourself how it is that certain businesses always come up with the best ideas while others seem to live from “marketing campaign to marketing campaign”?
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When studying the practices of business empires, discussion about what makes certain companies leave others in the dust has been hotly debated. Although clearly details like the economic climate, financial backing, and talent all need to be considered, organizations can and do tip the scales in their favor through what’s known as the New Product Development (NPD) Process.
Interestingly enough, the whole process is covered in 8 Steps:
1. The Generating of Ideas
Coming up with fresh ideas has often been considered one of the hardest parts of this whole process. If a campaign is put together on a less than profitable idea, the final product will likely have a lower ceiling on the market. This is why executives often consult industry and market trends before heading to the next phase.
2. Screening Ideas
So how do you go about differentiating between great concepts that’ll resonate with buyers and ideas that’ll hamstring your campaign before it even begins? By making sure that the product has profit potential. This is done by addressing things like the size of the target market, expected market growth, as well as the needs of the ideal customer.
3. Developing and Testing the Concept
This is the part where companies start rolling up their sleeves. The question now shifts from “Can this work?” to “How do we get this to work?”
During this stage, the organization and the marketing department will iron out details like the benefits of the product, marketing ideals, production costs, and anticipated customer response.
4. Business Analysis
Now company decision-makers will turn their attention to the numbers. You can have a potentially lucrative idea, but what good is that if the costs are too much handle –or worse- completely unaccounted for? The halfway mark of the Product Development Process features the calculating of production costs, key financial milestones such as the break-even point, and sales estimates.
5. Testing! Testing! Testing 1-2!
At the end of the day, abstract discussion and number-crunching can only take you so far. To get a better sense of how successful a product could be, businesses test the market. This is where the focus groups and their feedback come in.
As the betas try out the product and state their thoughts, businesses continue to refine details like durability, design, and appeal. Along those lines, A/B Testing is a course you’ll definitely want to consider.
6. The Technical Side
Whether you’re selling children’s toys or printers, the technical aspects of the product need to be addressed ahead of time. This is where things like technical guides, schedules, exit strategies, and financial estimations are sorted out before the product is formally introduced to the market.
The product is introduced to the market during this phase. This is where the marketing campaign and the sales funnel associated with it start really coming together. How precisely do companies handle this aspect? Marketing Principles 1 and Marketing Principles 2 do a fantastic job of explaining this in-depth.
8. New Product Pricing
Going by what’s intuitive, you’d think that commercialization would be the last phase. After the product has been made available to customers, however, many businesses like to take stock of what’s going on. More importantly, evaluating products is a key part of helping the company develop products more efficiently in the future.
How do you think the conventional approach to developing products could be improved? Or does it need changing at all?
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