New product development is the process of developing, creating, identifying, evaluation, and commercialization of a new product in the market is called new product development. There are several steps in the process of new product development.
New Product Development Process
1. Idea generation: It is the very first step in the process of developing a product. In this stage researchers or marketers can identifying customer needs and wants. The development of a product will start with the concept. The rest of the process will ensure that ideas are tested for their viability, so in the beginning, all ideas are good ideas
Ideas can, and will come, from many different directions. The best place to start is with a SWOT analysis, which incorporates current market trends. This can be used to analyze your company’s position and find a direction that is in line with your business strategy.
2. Idea screening: The second step in New product development is Idea screening. The purpose of idea generation is to create a large pool of ideas. The purpose of this stage is to pare these down to those that are genuinely worth pursuing. Companies have different methods for doing this from product review committees to formal market research. It is helpful at this stage to have a checklist that can be used to rate each idea based on the factors required for successfully launching the product in the marketplace and their relative importance.
3. Concept Development and Testing: The third step in New product development is Concept Development and Testing. An attractive idea has to be developed into a Product concept. As opposed to a product idea that is an idea for a product that the company can see itself marketing to customers, a product concept is a detailed version of the idea stated in meaningful consumer terms.
4. Marketing Strategy Development: This is the next step in new product development. The strategy statement consists of three parts: the first part describes the target market, the planned product positioning, and the sales, market share, and profit goals for the first few years. The second part outlines the product’s planned price, distribution, and marketing budget for the first year. The third part of the marketing strategy statement describes the planned long-run sales, profit goals, and the marketing mix strategy.
5. Product Development: If the new product is approved, it will be passed to the technical and marketing development stage. This is when a prototype or a limited production model will be created. This means you can investigate exact design & specifications and any manufacturing methods, but also gives something tangible for consumer testing, for feedback on specifics like the look, feel, and packaging for example.
6. Test Marketing: After designing, the next step is testing the product in the market. The term ‘test marketing’ is also sometimes called ‘Field-testing’. The word ‘test’ means examination or trial. Test marketing, thus, means testing the product in the market before the product is commercialized on a large scale. This is done with a view to understanding the market and the marketing considerations like the nature of competition, nature of demand, and the consumers’ needs, etc.
7. Commercialization/ Launch the product Internationally: New products approved for commercialization enter the final phase of the development process. During the period required to get into full-scale production, various activities started in earlier phases, such as package design, promotional literature, and advertising copy can be completed. Depending on the similarity of the new product to present products and its estimated market potential, it might be assigned to an existing division, to a new division specifically established for it, or to a new enterprise owned wholly or partially by the developing company. When the company decides to commercialize its products, the major cost takes place.