Although developing a new product can be a great investment for any company, it is important to understand the various steps involved so as to make the process successful.
The first step in the new product development process if idea generation. A company can generate product ideas from the various source available to it. The first source is internal sources where the company gets ideas from within the company including from employees. There is also the external idea sources such as suppliers customers competitors and distributors.
Idea screening is the next step in the new product development process. All the generated ideas are screened so that only the good ones remain and the other rejected. As a result the number of ideas that were generated in the first step will be reduced in order to cut the costs of product development and only retain a small number of good ideas. When screening out the ideas, things like ROI, market potential and affordability of the product are considered.
The third stage in new product development process is concept development and testing. The idea is then explained in a concept that is meaningful for consumers to comprehend. This way, the consumers can be able to perceive the product and give their reaction. It is also crucial to provide in-depth information so that they will have a clear image of the actual product. Besides, the concept testing can either be done symbolically or physically.
The next step that follows in this process is the marketing strategy development. This step involves designing the market strategy that will used to introduce the product into the market. It involves three stages which are; a description of the target market, the products planned price and the profit goals as well as marketing mix strategy to be used.
Business analysis is the other step in the new product development process. This step involves determining whether the new product will be profitable by reviewing the costs, sales and profit projections. The company can estimate the sales by conducting market surveys and looking at past history of similar products.
The next step is product development after passing the business analysis. The business concept is developed into an actual product that can be tested by consumers. After product development, the next step is test marketing. The product and the marketing programme are tested including advertising, packaging, and distributions.
After test marketing, the final stage is commercialization. In this stage, a lot of money is spent on advertising, sales promotion, and renting a manufacturing facility. Also, crucial decision should be made where to launch the product in order to target your market.