Every business exists for the sole purpose of creation of concepts in the form of products and services and then selling those products and services to customers for a monetary value. However, the ultimate truth about products is that they have a finite life span, much like mortal human beings. However, they may have an average life span that is longer than humans. There have been many brand names, household and easily recognizable that have since long gone. The inherent reason for a product going out of the market can be many and that is beyond the scope of this discussion. What is relevant though is that due to this continuous phasing out of products, new concepts and products have to be developed. Thus the primary task of a business is to keep churning out new products and concepts and then market them to the target demographic.
Every product goes through a series of life stages. They have an initial concept stage which is followed by a testing and validation of the product idea, followed by prototyping and testing and then finally launch. Because of the inherent risks of high rate of product failures, the new product development cycle has assumed critical importance for businesses. Without new products it would be impossible for a business to sustain itself in the tough business environment and thus die out eventually. In order to ensure that the new product development process is as full-proof and dependable as possible, businesses have thus involved a process of guideline which has each of the levels of the NPD process clearly earmarked and a set of checks in place that will ensure that the concerned level is a success. These checks can also be considered as to be assessments, which are performed by the management at the conclusion of each level. Depending on the results of each level the business can then take a further call whether to keep funding or close the development process.
Typical Product Development Life Cycle Stages
1. Generating an Idea
This is the stage where the initial product ideas are tossed about. Whether it is the design and development of a new product or up-gradation of an existing product lineup, this is the stage when creative juices are flowing and creative designers are having sleepless nights going back and forth between the board room and the drawing board.
This is also the stage where customer feedback and expectations are also ascertained via surveys, email marketing, telemarketing or through any other form of market research. This is to find out if the product that is being launched or being planned meets the expectations of the target demographic. However, this can only work if the right set of questions are asked. As such before the survey process is initiated to target a test sample of the demographic, a Focus Group discussion is conducted to ensure that all the relevant points are known and a refined set of questions can be prepared. Product ideas can also be revealed by public opinion. Surveys which are aimed at understanding the needs and preferences of customers can very well reveal what the market is looking for.
The concept stage is also when existing prototypes of products that match the requirements and are already in the market are tested and evaluated for their performance and efficiency. Room to further develop on the performance of these prototypes are also ascertained and discussed.
2. Screening and Filtering of Ideas
Once all ideas and information has been assimilated, the next stage in the NPD cycle is the screening of ideas and the final selection of the one most promising idea which can be further pursued and developed. The process of screening can be accomplished using a number prevalent methods. They can be based on the company’s existing strategies in terms of marketing as well as can be based on the current focus that the company has. E.g., an important metric for screening can be the current demographic that the business is focused on. If the product that is being conceived does not cater to the current demographic that the company is focusing on it could mean a change in the business’s marketing strategy and additional cost on acquiring new customers from a completely different demographic. The additional costs can severely overstretch the scare resources of the company and the benefits that the new product brings in terms of additional revenue can thus be negated.
Additionally, the new product may not be measuring up to the profitability levels that the company has. Let’s say that a company allocates 45% of a product’s price as its research, development and production cost. Another additional 10% is dedicated to transportation, warehousing and other ancillary costs, 10% on advertising and marketing and the balance of 35% is the profit component. If the new product does not match the profitability expectations then it is simply not worth to pursue. This is assessed in the screening stage
An important way to screen ideas and concepts is by directly taking feedbacks from the target demographic. Customers are not only great for the sustenance of a business through their buying of products, but they are an excellent source for fresh original ideas as well as validation of ideas generated through some other sources. Bouncing ideas against a seasoned customer base will not only reassure that the ideas are going to work but also save a business from possible disasters and NPD (New Product Development) failures by restraining them from pursuing ideas that are eventually not going to work.
Businesses can take this more direct and less scientific approach by putting design concepts and ideas in front of specialized focus groups. However focus group discussions can be a costly and time consuming affair and they are difficult to arrange as well. Comparatively one-on-one interviews are more cost effective and the can give direct answers at a much lower cost. These answers can then be used to validate a product’s feasibility. However, there is one problem in using focus groups and direct interviews, the answers are subjective and they tend to vary wildly even within a single focus group and or sample demographic taken for direct interviews. Additionally, businesses may approach the SWOT analysis route to ensure they are on the right path in terms of NPD.
3. Conceptualization and Implementation of a Prototype
In this stage, once the feedbacks from various statistical, research and subjective analysis have been received the company moves onto creating a product prototype. This prototype is the fundamental basis on which the company will go on to manufacture the final product and sell it in the market. For industries such as automobile, real estate, heavy vehicles, machinery this prototype stage is the congregation of the concepts, ideas and criticism that has been collected over the last few stages and their final coming to shape of a design that the ultimate manufacturing process is to be based on. Several prototypes are discussed however only one is (and depending on the industry a few are) conceptualized.
In the case of new product developments that are highly technology based, there is a growing amount of risk that the first entrant to a market is sometimes superseded by later entrants who take time to develop a better more refined version based on the same technology concepts. This problem can come up even though the idea and the concept is bounced against the target demographic. Marketers have found that basing decisions on consumer opinion alone is not the right way to go. Or even if consumer opinion is based on it is better to approach it in a two-pronged way to ensure that the opinions of both the technology minded and those not. In such discussions the development team could explain both the new technology aspects of the concept as well as the conceptualized use of the product in the form of a presentation and then leave the groups to take the discussion forward. The group can deduce further usage of the product and or discover yet not identified commercial applications of the concept. The concept of such group discussions to validate a concept is to find out whether the concept is viable and marketable.
Testing is also an important requirement of the conceptualization stage. A new product prototype needs to be tested thoroughly before it can be released into the market. An automobile for example would need to be tested to check whether all the safety requirements as warranted by a target market has been conformed with and the performance is satisfactory. Testing is also required to ascertain if the USPs of the product performs better than the current standard in the market.
The prototyping level takes all the inputs gathered up until the conceptualization stage and uses that to develop a single unit of the product. The prototyping stage can however throw up some issues chief among them is an insufficient analysis of all the pros and cons of a product before a prototype is made. This happens as sometimes the design team can become too emotionally attached with a prototype leading to its ‘push’ through the decision making process even though the design may have received negative feedback in the initial one to one surveys and or focus group studies.
The manufacturing stage is the next level which follows the prototyping stage. Factory reconfigurations are done to accommodate the new design and the manufacturing process that is required to produce them. Large scale manufacturing is the hallmark of this stage as the products are being manufactured for the purpose of distribution in to the market.
The manufacturing stage has its own specific challenges and those challenges are met according to the demands of the industry. For example an automobile manufacturing company decides to launch a new vehicle. The new product which has a complex manufacturing process. It can however be streamlined by assessing the components and then deciding which ones can be overlooked for the finishing process. These may be the components that are going to be deep inside the finished vehicle and the customer may never get to see them.
At the manufacturing stage a host of manufacturing guidelines are to be followed. Some of these guidelines are more of an industry matter in the sense these are laid down by the governing body representing an industry. Sometimes design guidelines can be more of a necessity arising out of a government guideline such as safety. At other times these guidelines are more internal and arise out of the company’s own safety and design methodologies.
The most successful products have a great team who move forward as the evolution on the products quickly develops. An experienced product manager can be the key in making or breaking your project success.