- What is the New Product Development Process?
- 7 Stages of New Product Development
- 1. Idea generation
- 2. Idea screening
- 3. Concept development & testing
- 4. Business and marketing strategy development
- 5. Product development
- 6. Test marketing
- 7. Commercialization
- 1. Your concept becomes foolproof
- 2. Enhances product quality
- 3. It reduces expenses and the chances of failure
- 4. Accelerates innovation
- 5. Leads to better marketing strategies
- How Appinventiv Can Help in Converting your Ideas into Reality?
Everything should be thoroughly researched and planned in the business sector. It is true even when launching a completely new product. Preparing for the release of a new product should not be haphazard.
The most crucial aspect of the new product development process is that your product should be able to solve the problem of the end-user. It is paramount above everything else, as it’s the only way to create a product that is ready for the market, which is critical to any product’s success.
It can be difficult to bring a new product to life, especially if you have a product idea that can benefit a target audience but you’re unsure how to get it in front of them. Thankfully, there is a blueprint for new product development—a strategy that will assist you in bringing your ideas to life.
In this article, we will walk you through the fundamentals of the new product development process and the steps you can take to plan your product development phases.
What is the New Product Development Process?
A structured and meticulously implemented new product development process (NPD) is the best way to obtain new products. Companies need a constant stream of new ideas developed into new products to survive and succeed in the wake of maturing products.
The complete set of actions through which a firm visualizes and delivers a new offering is referred to as the product development process. It includes all of the necessary phases, from determining product-market fit to determining the optimal approach for producing and launching the product to determining its cost and go-to-market strategy.
The goal of the new product development process is to humanize technology in order to suit the needs of end users. The following are the results of good product development:
- Creating new business prospects and expanding existing businesses
- Increasing profitability and productivity
- Enhancing customer pleasure
The terms “product development” and “new product development” are not interchangeable. Product development focuses on introducing products that already have a Proof of Concept (POC), whereas new product development focuses on completely new concepts with a significant level of uncertainty around their development and subsequent adoption.
Seven critical stages must occur during the new software product development process, as well as an organizational mindset that welcomes doing something besides what has already been perfected that will keep your company competitive in an ever-changing marketplace.
7 Stages of New Product Development
The process of creating a new product is divided into seven stages. By following this method, you’ll be able to consistently think of new product ideas.
Although new product development stages can be a lengthy process that often necessitates iteration, it’s all done to guarantee that your product is as superior as it can be before it reaches your buyers and meets their demands in the most efficient manner possible.
To ensure that the original idea can finally make it to market, the seven steps of the new product development process demand strong concept development and product innovation. This is usually accomplished by fostering design and product advancements through innovative ideas and professional technical approaches, such as:
- Using Concept Generation to analyze the user’s demands
- Coming up with solutions to the problem
- In order to improve existing products further, addressing usability, safety, and user acceptance issues
- Using Ergonomic and Aesthetic Principles
- Comparing and ranking all concepts and ideas
Let’s have a look at the various stages of new product development.
1. Idea generation
The process of developing a new product begins with the generation of ideas. It is one of the most crucial phases of product development and entails brainstorming an idea (or ideas) that would help you overcome an existing customer problem in a novel and creative way. It’s critical to have a thorough understanding of the target audience and their pain points, which you should tackle while brainstorming ideas to help you meet customer needs.
There are two potential sources of fresh ideas:
- Internal source: The company generates new ideas internally. It includes both R&D and staff contributions. Employees are frequently the biggest source of fresh ideas, as they are constantly exposed to the product as well as consumer feedback. Organizations like Toyota have created incentive programs to encourage their employees to come up with viable ideas in this regard.
- External sources: The company seeks out new ideas from outside sources. It includes external sources such as distributors and suppliers, as well as competitors. Customers are the most significant external source since the new product development process stages must be centered on delivering value to customers.
2. Idea screening
The new product development process’s second step builds on the first. You’ve amassed as many ideas as possible and made a list of them. It’s now time to cross off any ideas that aren’t good enough from your list.
However, there are more things to consider while screening a product idea than whether it is “strong” or “weak.” Ideas must also be compatible with a company’s broader business plan and direction.
The usability of these product concepts should be determined by three primary factors: return on investment, affordability, and market potential. Other considerations include the product’s capacity to be successfully marketed, its link to competing products, distribution, product pricing, and production time.
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis might prove to be useful when shortlisting new product development concepts.
3. Concept development & testing
Rather than testing the product itself, you would test the concept of your product at this stage. A product concept is a more thorough version of the idea expressed in consumer-friendly terms.
The essential steps involved in concept creation are as follows:
- Measuring the gain/pain ratio
- Performing a competitor analysis
- Identifying the core product features
- Creating a value proposition chart
The test is the next logical step once you’ve developed a well-designed concept. Consumers should be able to comprehend the concept and see if it has been effectively created. Your next step should be to demonstrate your idea to a limited group of potential customers and evaluate it.
4. Business and marketing strategy development
Setting profit expectations is the purpose of this step in the new product development process. Business analysis and marketing strategy are intertwined with developing a strategy for reaching out to and connecting with a specific demographic and must be regarded as a critical phase in the new product development process’s seven stages.
This stage, also known as marketing strategy development, involves a few key elements in the construction of a good marketing mix. The following are some of these aspects:
- Definition of the target market, as well as the value proposition offered from the customer’s point of view
- Profit targets over time, particularly during the first year
- Pricing, distribution, and overall budget
- Sales forecasts for the long run
5. Product development
Your product is fit to become a prototype or the first edition of a product at this point in the new product development process. This way, you’ll have a physical representation of your concept that you can test in real life rather than just on paper. This prototype, also known as a minimal viable product (MVP), is a simple version of your product that will help you gain a sense of how it works and point out areas that have to be improved.
For iterative and incremental development, a minimum viable product (MVP) could be introduced and deployed in the market with minimal features. Naturally, modifications are based on the fundamental response from customers, which is obtained through effective communication and collaboration.
According to Gartner, many firms believe in involving customers in the early stages of product development. This places them in a stronger position to create a product while adhering to ergonomic guidelines.
R&D and operational expenses create a significant increase in spending at this stage. One or more physical copies of the product concept will be developed and tested by the R&D department.
6. Test marketing
You’re doing market testing when you release prototypes to the target demographics and ask for their feedback on how well the product works. It involves inquiring about what your target audience enjoys about your proposed product and what they want to see fixed or incorporated into it.
Running a test of your product early on can ensure its success before investing too much time and money. A positive response indicates that there is sufficient demand for the product, which leads to the start of the manufacturing process.
There are two types of market testing methodologies:
- Alpha testing involves test engineers analyzing a product’s performance. They keep track of the marketing mix’s effects on the final product. If there are any issues, changes are planned and implemented before the final thumbs up.
- Beta testing involves customers using the product and giving input to the company. It has to do with paying close attention to the customer’s voice. If there are any problems, they are returned to the project team for correction.
Commercialization is the ultimate stage of the new product development process, where you put your products on the market. The business will need to establish or rent a production facility in this phase, which will incur the biggest expenditures. In the first year, a significant amount of money might be spent on advertising, product promotion, and other marketing operations.
Here are a few of the most important considerations:
- Calculate the global market for your product and introduce an appropriate quantity based on that estimate
- Make the relevant advertisements and stick to a marketing strategy that works
- Ensure your marketing strategy includes digital channels
- Prepare your consumers for a new product launch
- Choose a launch date and location for your product
- Keep a tight eye on your product and pay attention to its performance
Benefits of New Product Development for an Organization
As a company, you must strike a balance between the necessity and difficulties of new product development in order to maintain your competitive advantage. It’s here that the new product development process stages kick off. It assists you in determining the new product’s market viability and economic utility.
Here are a few ways you may assist your company in reaping the rewards of new product development:
1. Your concept becomes foolproof
Properly following the new product development process steps allows you to test the concept with a real audience and get feedback before implementing it. It also provides reliable information on whether the product is acceptable or not, and it also helps in determining the audience’s reaction to the concept.
2. Enhances product quality
During the planning step, you will plan everything from the raw materials used in product development to the product’s features. You’ll also assess for market fit and test your prototype at the end of the process. It will ensure that the company delivers a high-quality, widely available product.
3. It reduces expenses and the chances of failure
According to Fundera research, over 20% of new enterprises fail in their first year. It happens due to several factors, including insufficient market research, inefficiency, and the lack of commercially viable business strategies. The different phases of product development process are aimed at minimizing these risks for your organization by evaluating the feasibility of your idea and the existing market scenario.
Identifying the efficacy of new products in the NPD process before they can be placed on the market allows you to change your concept to market needs or completely abandon it to save time and money.
4. Accelerates innovation
The new product development process works as a catalyst for fresh ideas in your company.
It’s only natural that having a framework to examine the feasibility of new ideas will lead to their adoption rather than more ad hoc ways of idea development that are more likely to fail.
5. Leads to better marketing strategies
The development of a marketing strategy for your product can be aided by the new product development phases. You can leverage the information you gathered during the development process into a well-defined marketing plan. After that, the workflow is simplified and hastened. The following are the three most important aspects of your new product marketing strategy:
- Targeting a specific market and various methods of communicating with them
- Analyzing statistics such as product pricing, distribution technique, and marketing budget for the first year.
- Forecasting long-term sales and profit margins.
How Appinventiv Can Help in Converting your Ideas into Reality?
Each stage of new product development can be difficult, but success will come from a continuous cycle that significantly enhances each new product. If you want to successfully bring your innovative design ideas and design and development initiatives to market, Appinventiv can be your trusted partner.
We are a well-known firm that offers software development services to a large number of clients. We have years of experience producing remarkable software product solutions to address the most complex business concerns.
We are a leading custom software development company in New York that works with clients from a variety of sectors and emphasize understanding their business processes, goals and objectives, and constraints so that we can create the best product possible that meets customer expectations and meets their unique go-to-market milestones.
We recently collaborated with Asian Bank to design, develop, and launch a comprehensive fintech platform that allows consumers with crypto assets to store, transact, and convert their assets into fiat currency. It’s essentially a core banking system with all of the necessary features and capabilities.
For another client JobGet, we build an innovative product where job seekers and employers can message each other and schedule meetings in real-time. The platform has helped to bring down the job search process from months to days for blue-collar workers. Till date, 150,000 jobseekers have been placed and the client has received $2.1 million funding for their innovative product idea.
In case you are also looking for similar services, contact us for a journey full of innovation. Our experts will guide you through the entire process and help you develop a product that customers would love and embrace.
The most important goal in all of these stages of the new product development process is to create superior customer value. Only then will the product be a commercial success. With the rapid changes in the market as a result of technological advancement and modernization, it is critical for everyone to be aware of the seven stages of the product development process.
We hope that this article has given you a better understanding of what goes into new product development. Following these stages will make the process of product development a lot easier and hassle-free.
Q. What significance does the product development process have?
A. Product development strategies are critical for ensuring value for your potential clients as well as ensuring that demand exists and that your finished products are of the highest possible quality before going to market.
Q. What role do new products play in a company’s success?
A. You can sell more to existing clients (getting the most of established relationships is less expensive than finding new consumers) and distribute fixed costs like facilities or equipment across a range of products by generating new products and services.
Q. What is the average time it takes to develop a new product?
A. If your team includes an experienced product developer and your idea is of moderate complexity, you should be able to get your first prototype in 3 months and a finalized works-like-looks-like prototype in 6-9 months.
Q. What is the most crucial phase in the launch of a new product?
A. Research and testing are the most important steps in the new product release process. Though a product may appear to be a good idea at first, a closer examination may uncover severe flaws. For example, you can learn that another company attempted to launch a similar product but failed miserably.
Q. What are the difficulties in developing a product development strategy?
A. The following are the most common product development challenges:
- The viability of the market
- Problems with the product plan
- Management of the workflow
- Issues in product engineering
- Policy on pricing.
- The rate at which innovation occurs
Q. How do you successfully launch a new product?
A. To launch a new product successfully and without any hassle, you can follow the below mentioned steps-
- Checklist for product launch
- Get to know your customer
- Make a statement about where you want to be in the market
- Stakeholders should be told about your positioning
- Make a plan for how you’ll get your product to market
- Set a launch target for yourself
- Make promotional material
- Make sure your team is ready
Q. What causes new products to fail?
A. Terrible design, poor user experience, improper implementation, complexity creep, and a lack of quality control are all contributory factors to new product failure.