Every entrepreneur is concerned with the success – of their new product on the market. To ensure product marketability, companies use a process known as new product development (NPD). It was developed by Dr Robert G. Cooper from an in-depth study on reasons why products succeed or fail on the market. When developing new concepts, the following eight steps are critical to determining the marketability of the new product and the continued existence of the company.
Step 1: Idea Generation
Idea generation is the first step in the NPD process. It involves searching for new ideas using internal and external SWOT analysis and looking at marketing trends in the industry to develop the best ideas. All the while taking into account return on investment, affordability and distribution.
New product ideas may be collected from internal sources, customers, competitors, distributors and suppliers.
Step 2: Idea Screening
Idea screening involves the careful selection of good ideas from a pool of ideas. All the ideas are filtered in order to separate the feasible product ideas from the non-feasible ones. Some of the factors that might be used to filter through the ideas may include:
- Is the product addressing the needs of the customer?
- Does the product align with the company’s objectives, goals and resources?
- Does it consider the company’s strengths and weaknesses?
- What are the current industrial trends?
- Affordability, advertising and distribution
- What is the expected return on investment?
Step 3: Concept Development and Testing
To move the new product development project along, the feasible product ideas will have to be turned into product concepts. The product concept is a detailed version of the idea, describing the idea in the view of the customer. Testing these concepts helps the developers know the customers’ reaction before the product is introduced onto the market.
The developers want to know how the customers view the new product and if it fulfils the customers’ needs. At this stage, the new product development process also looks at legalities related to the new products such as patent research and design due diligence.
Step 4: Marketing Strategy and Business Analysis
Once the product concept has been tested and approved, a marketing strategy should be set up to find the best and most profitable way to sell the new product. The developer must look at the target market, product positioning and the marketing mix that should be used. The business analysis needs to take into consideration if there is a demand for the new product, production costs, competition and identify the point of break-even.
Step 5: Product Development
At this the point, the concept must be developed into a tangible working prototype to show that it can be turned into a workable. A product that can be put on the market. The prototype can be used to determine the exact product design and specifications, and also determine production methods. The prototype also gives consumers something realistic to test and judge its aesthetics, as well as packaging. This allows the developers to gather useful feedback that they can use to make the final product a quality product.
Step 6: Test Marketing
Test marketing is about arranging focus groups, test panels and sample tests. This gives the developer useful information for last-minute improvements and changes to the product. This stage also brings buzz and hype around the product before the actual advertising and marketing is rolled out. The marketability of the product is proved here, making a good case for why product testing is important.
Step 7: Commercialisation
This stage is when the actual completed new product is introduced to the market. This is where the pre-agreed marketing mix strategies and marketing is put into effect. The four important things to look at when introducing the new product are:
- When to release the new product
- Where is the best place to release it and how widespread will the release be?
- To whom will the distribution and promotion target?
- How will the developer release the product to their target market
Step 8: Introduction
A detailed launch plan is needed for maximum positive impact of the product introduction into the market. At this point, the developer can look back at the product development process and learn from mistakes made and review the performance of the market.
By following these eight steps, new product development can be made easier, faster and have a higher chance of launching a successfully marketable product. A product idea can make or break a company. A successful product means continued existence, while a failed product means the opposite. It is up to the company to come up with great product ideas that are marketable.