product development (new product development — NPD)

The new product development process consists of the following components:

Idea generation is the continuous and systematic quest for new product opportunities, including updating or changing an existing product. The goal is to generate ideas for new products or services — or improvements to products or services — that address a gap in the market.

Idea screening takes the less wanted product ideas out of the running. Unsuitable ideas should be determined through objective consideration, early testing and feedback from consumers.

Concept development and testing is vital. The internal objective analysis is replaced Market strategy and business analysis identifies the product strategy of how to optimally market and sell a product or service. It’s comprised of the four P’s of marketing — product, price, promotion and place.

Product. The service or good that’s been designed to satisfy the demand of a target audience.

Price. Pricing decisions affect everything, including profit margins, supply and demand as well as market strategy.

Promotion. The goals of promotion are to present the product to the target audience — increase demand and illustrate the value of the product. Promotion includes advertisements, public relations and marketing campaigns.

Place. The transaction may not occur on the web, but in the digital economy, customers are generally engaged and converted on the internet. Whether the product is provided in a traditional brick-and-mortar business setting or is available through an omnichannel approach, the optimal channel or channels must be determined. This is especially true if the targeted potential customers are to become actual customers.

Feasibility analysis or study yields information critical to the product’s success. It entails organizing groups that will test a beta version or prototype of the product, then evaluate the experience in a test panel. This feedback communicates the level of interest in the product Questions to be answered during feasibility analysis include the following:

• Do you have the labor and materials required?
• What’s the price of production, delivery and promotion?
• Do you have access to the right distribution channels?

Product technical design and product roadmap integrates the results of the feasibility analyses and feedback into the product. This stage consists of turning that prototype or concept into a workable market offering; ironing out the technicalities of the product; and alerting and organizing the departments involved with the product launch. This includes research and development, finance, marketing, production and operations. This step should also consist of creating a product roadmap that teams will follow to develop the new product.

Test marketing or market testing is where the goal is to validate the entire concept — from marketing angle to packaging, advertising and distribution. Test marketing is often performed Market entry and commercialization is the stage in which the product is introduced to the target market. The product is now available to everyone and the product lifecycle begins. The life of the product is shaped Product development is an ever evolving and fluid process. In some organizations, there’s a dedicated team that researches and tests new products whereas smaller organizations may outsource their new product development to a design team. In midsize organizations, the product manager is often the person in charge of product development. Regardless of which framework is used and who is in charge of new product development, this is just one aspect of the entire product lifecycle management (PLM).