New product development is a process of idea generation, creation, designing, validation, and launching of a product that is completely new to the market. Examples of new product development include creating a new brand of canned soup, launching an app for tracking mileage, and introducing a smartwatch that can track workouts. This process requires careful planning and consideration of potential customer needs, market trends, and competitive landscape.
Businesses that have the best product development strategies incorporate the right governance to create novel concepts for products while gathering sufficient funding to ensure that these products can grow. These companies work on a systematic process of vetting and prioritizing new products as per the target market and customer needs. A new product development project goes through a thorough understanding of the new product ideas, target audience, concept testing, product management, and other new product development stages.
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What is a New Product Development?
New product development is the entire process of creating a new product in the market, renewing an already existing product, or launching a product in a new market. Different elements of the process include idea generation, product design along with different business considerations.
The process can be broadly described as the transformation that takes place in different stages from the concept to the final product to the market opportunity. The company that creates the product will also provide different means for generating income. The new product development involves researching the needs and requirements of the customers along with the environment, competition, and market nature.
- New product development is the process of bringing a new product to market, which includes generating the idea, assessing its market potential, refining it, creating a prototype, and ultimately launching it for sale.
- To remain competitive in the market, companies either develop new products or improve the existing ones.
- Building a product that’s already been conceptualized and tested falls under regular product development while coming up with a completely new idea, generating, developing, and launching it is involved in new product development.
Why do Brands Need New Product Development?
Having the process of new product development is nothing less than a boon for any company and organization.
This process helps the company in achieving growth and success with the creation of new and amazing products that meet the needs and requirements of the people. Some reasons why product development should be considered are:
- To meet the customer’s changing needs and requirements
- To launch a new product in the market
- To maintain an edge against the competition
- To solve the problems of customers
- To create products and introduce them based on disruptive technology
- To help in solving common issues of the product
Popular Brand Examples Using New Product Development
- JBL launched a new headset series called JBL Live, which promises to provide superior sound quality, extended battery life, and increased comfort.
- Apple launched the initial iPhone in 2007 and has subsequently introduced various new models including iPhone XR, iPhone 11, iPhone 12, iPhone 13, and iPhone 14.
- Coca-Cola introduced the Zero Sugar version of its popular drink to a different group of people.
- McDonald’s added a new burger option called McVeggies, which features a patty made entirely out of plants.
Stages of New Product Development Cycle
One very important thing to keep in mind is that there aren’t any generic processes for product development. The renditions will differ according to the detail and depth of the explanation that has been provided by the company.
There are 8 different stages of the New Product Development process and these have been explained in detail below –
1) Idea Generation
This is the 1st stage of the process and in this particular stage, the company will come up with ideas that are based on external and internal sources. Mostly, internal data is comprised of development teams and in-house research. External data on the other hand refers to customer requirements, competitor creations, suppliers, distributors, and other factors. A model mostly used by the company is SCAMPER- Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, and Rearrange/Reverse.
2) Idea Screening
This is the next stage of the process where the ideas are screened to make sure that only the best are selected. The main goal here is to put primary focus on those ideas that resonate most with the financial goals of the company along with the consumer values. This stage will filter out some of the ideas that don’t have enough potential to benefit the company in the long run.
3) Concept Development
The third stage of the process is concept development which is a pretty important one and it focuses on the testing and development of the concept. The concept development stage will comprise the development of the ideas into detailed concepts for the company. These ideas will be properly conveyed using terms that are customer-oriented. It is essential to create a concept to project the new product idea in terms of how it is supposed to be perceived by the customers. It is also important to then test the concept to ensure that can withstand the competing market efficiently.
4) Strategy Development
In this particular stage, the company has to come up with different strategies that are meant to introduce a worthy product into the competitive market. This process is extremely important to ensure that the product that is developed will have the right launch. The company has to create strategies for potential revenue, price, as well as other figures for distribution and advertising in the best way for this step to work properly.
5) Business Analysis
This is the 5th stage in the new product development process and albeit a very important one. In this process, the concept of the product will be put through different tests and business analysis models to properly figure out the revenue and sales projected. This process also helps in risk analysis and much more. The objective of the company is to make sure that the product can satisfy all the conditions, optimize the market share, and only then be moved forward.
6) Product Development
Now in this step, the company will declare the concept of the product to be completely in line with the goals and objectives that the company has. Hence, the company production team will get the green light for beginning the process of production. The product development team and research section will work on this particular product concept for a certain period and come up with a functional prototype of the concept.
7) Test Marketing
The second last stage in the process involves the proper testing of the prototype along with the marketing strategy of the product in the best way. This stage will also help the company figure out ways to introduce the product into the market through a well-defined market strategy. More focus is put on the processes of production, market research, market testing, advertisement, distribution, and sales in this process.
This is the stage when the product is finally completed and will be ready to launch. Based on the important pieces of information that had been collected about the product, the company will decide on the marketing process as well as proper business management too. In this stage, the company could choose between launching the product or it can also choose to put the product aside. If the product gets a proper get-go, then it will be introduced to the customers along with the features and benefits that it has to provide. Apart from that, there are some other things to keep in mind about this process. Here, the company will have to incur different expenses such as initial investments in infrastructure, advertisements, and promotions.
New Product Development Examples
The entire cycle of a product development process will vary according to the industry, so it is suitable to take a look into the most amazing and largest industries that partake in the process of new product development.
These industries are completely straight when it comes to the development of products and hence there are different case studies to prove the point that we are trying to make. Let us have a look at some of the popular product development examples-
In the world of fashion, the process of new product development will usually begin traditionally by creating a sketch of the design using different digital programs. Then the sketch will be developed into a working sample with the help of a creator of patterns. This is the phase of prototyping where the size set will be designed. Hence, different samples with different sizes will be created based on various measurements. After finalizing the size set, the production process will begin.
Rather than creating the product, most apparel and fashion companies tend to print on demand to create the clothing in the first place. With this method, designs can be uploaded to a particular 3rd party application that will provide a legitimate connection between the fashion store and a warehouse. This is where the order will be completed and the clothing will be delivered to the fashion house without any glitches.
Other important factors that should be considered:
Labels: Some of the fabric tags that are stamped or sewn into an article of clothing will contain certain information about care instructions related to the fabric content.
Hand tags: Most of the branded tags that hang from any piece of brand-new clothing contain details about the size and the price of the clothing.
Wash tests: By putting the product through different washing tests, the company can ensure that the product will be able to hold through the test of time and care.
The cosmetics industry incorporates different products that are always expanding. It might be due to the ever-changing trends related to self-care and wellness. From skincare to bath products and makeup, there are new products that are launched by these beauty brands. These products mostly focus on all-natural components as well as sustainable results. Hence, the process of creating a prototype of the product based on everyday ingredients becomes a lot easier.
The process of White labeling can be considered a proper and popular process in the cosmetics industry. Now, what does that mean? Well, it is the process that involves the discovery of a particular product that already exists, and then branding and packaging of the products that are already produced. No matter what route is taken, the process of mass manufacturing has naturally opted.
Some important factors that are to be included:
Regulations and laws: Some research related to FDA regulations and the inclusions that they can have for the product will help in providing more information about the packaging.
Warnings and labels: You need to identify all the important materials that are used in the product along with the potential reactions that the people might have.
Shelf Life: It is important to conduct different tests on the shelf life of the product. Along with that, the necessary information should be provided about the products’ expiration dates.
3) Food & Beverages
The products of food and beverages are commonly used for the process of new product development since they can be developed at a low cost and that too from the comfort of the homes. It is a pretty simple process to create an energy bar, right? All you have to do is go to the market and get the ingredients that you need to create the energy bar. The only thing that you have to do to make it a new product is to tweak the recipe a little bit. To make sure that you are properly able to manufacture the product so that it can be sold in stores, it is essential to have a commercial kitchen with a proper license. This is where the food or the beverage can be produced after passing the safety and health inspection.
These commercial kitchens are basic set-ups that consist of all the cooking equipment along with ovens and other appliances to create large batches of food or beverages. However, in the case of mass production, having a co-manufacturer is a good idea for sure. The manufacturing facilities have proper specialization when it comes to efficient processes of all the raw materials to produce amazing beverages and food products for the customers.
Some of the important factors that should be considered are –
Laws and regulations: Most countries tend to have different laws as well as regulations related to allergen warnings, dietary information, health claims and so much more. As a company, you will have to agree to all these regulations and comply with them while creating the product.
Warnings and labels: It is essential to have a display of all the ingredients that are included in the product along with the nutritional information as well.
Expiry dates: You also need to keep in mind the lifetime of the product and mention the expiry date and shelf life of the item. Also, proper instructions should be provided about storing and packaging the product.
Advantages of New Product Development
The data from Mckinsey Global Institute states that just 1 out of every 7 ideas for a product results in the development of the product itself.
These are pretty low rates of success. Also, the rates of failure for the products that are launched range somewhere between 25 and 45 percent in total. Hence, it is important to know where to spend the resources, money, and time of the company. This will help in deciding whether the company is going to be a success or not.
If you want to ensure that your company can create products and helpful services that will appeal to the clients, having a proper new product development strategy is simply the best idea.
With a strategy in place, you will have the best chance of avoiding losses for your company. There are some other advantages that a company can get from a properly developing new product development strategy and some are mentioned below –
1) Creating a culture of innovation
To create a new product, it is essential to have new ideas. With a culture of proper innovation, the ideas of people will be heard as well as tested and hence it can lead to proper business growth and success.
2) Keeping up with customers’
The habits and requirements of the customers keep on changing according to the economies as well as other important reasons. Having a proper product development process in hand will ensure that the companies can keep up with the newly emerging demands of the customers.
3) New opportunities
When you focus on the requirements of the customers, you will be able to make sure that new opportunities are created for the success of the business in the best way.
4) Higher Value
With new designs for the companies, you will be able to create products that are valuable to the customers, thus increasing the value of the company as well.
5) Improved brand reputation
When all the requirements of your customers are fulfilled with proper product development, it can help in increasing the reputation of your brand.
6) More Marketing time
A systematic and streamlined process will help in the identification and creation of plans for mitigating any challenges in marketing in the future.
7) No feature creeps or pitfalls
With a proper strategy for new product development, you will be able to manage customer requests better. Not to mention that it will lead to the mitigation of any pitfalls that might come forth in the future.
Here is a video by Marketing91 on New Product Development.
Tips for Improving NPD Process
To optimize the effectiveness of new product development projects, you should follow these tips –
1) Develop a long-term plan
Developing new products is a long-term process that requires patience. Simply aiming for quick wins won’t be enough beyond the initial startup phase. To consistently develop new products, your company requires a distinct vision, a reliable strategy to achieve it, as well as adequate funding and organization to support and implement the strategy.
2) To optimize NPD, you should include both technical and customer perspectives
While tech companies are typically focused on technology, an effective venture board for approving investments in new product development should have a balance of technical and customer-oriented skills, including a Product Manager. When screening ideas for product development and marketing strategy, it is important to consider the customer’s perspective to make informed decisions.
3) Please provide adequate funding to support NPD.
Although it may seem simple, not many companies prioritize nurturing early-stage new product development to maximize their product portfolio’s potential return. Providing seed funding for new ideas that align with company budgets and strategies is crucial in transforming new product concepts into successful offerings in the market.
4) Create a product portfolio strategy
Establishing a product portfolio strategy can help prioritize investments in new product development and help focus on the right projects. Having a clear portfolio strategy helps you to identify which products have the highest potential and invest resources accordingly. It also helps you to anticipate market trends and competitive pressures, so that you can make informed decisions about which new products to develop.
5) Capture the Voice of the Customer
Having a direct connection with customers during the initial stages of developing a product is crucial, whether through Design Thinking or any other approach that focuses on meeting market needs. Establishing a clear process to convert customer feedback into a product with the most appealing features is crucial.
6) It’s better to avoid committing to too many features than to overpromise and underdeliver
Companies often overpromise on features and fail to deliver on them. It’s better to start with a minimum viable product that includes basic functionality, and then use test marketing to guide the product development process as early as possible. It is important to listen to customers to identify essential features. It is not recommended to promise more than you can deliver as it damages the brand’s reputation. Instead, it is better to fulfill your commitments and gradually enhance the product over time.
Taking everything into account, new product development is nothing less than a revolutionary process that helps in the conversion of untried, new, ideas into workable and functional products.
By creating these products, companies all over the world will be able to delve deeper into the mindsets of their customers and provide them with exactly what they want to optimize their brand presence and sales.
Summing up the different stages of new product development, a proper process of success and growth can be created for every single brand. Now, in closing, how useful do you consider the production process in developing successful and sustainable new products that can optimize the brand’s profit margins?
What are the Characteristics of a successful NPD organization?
The new product development refers to the following characteristics –
- New product ideas developed in response to client demands are the foundation of effective NPD.
- The greatest new product ideas are in line with an organization’s strategy for product development.
- A fluid, lightweight procedure cultivates the concepts.
- Work is completed by cross-functional agile teams by a defined new product development procedure.
- The outcome is a brand-new product that thrills consumers and helps the company expand.
How long does it take to develop a new product and get it to market?
The amount of time required will be influenced by multiple factors, such as the level of difficulty of the product, the company’s stage and resources, as well as the industry involved.
If you want to create a successful product, having a clear process in place can help you and your team work faster and more efficiently whether you’re starting from scratch or making improvements. This process can increase your chances of success.
Who is involved in the new product development process?
Developing a new product is a collaborative effort that involves individuals from various departments within the company. During the idea generation phase, cross-functional teams work together to create the initial product concept.
Many industries rely on cross-functional teams to develop new products. These teams consist of members with different skills such as design engineering, coding, testing, product management, sales, and finance, among others. The team is led by a team leader or scrum master and stays together throughout the development cycle.
What are Some of the New Product Development Ideas?
Some of the ideas for developing a new product include-
- Survey customers to gain an understanding of their problems, needs, and value proposition
- Identify new trends in the industry that can be addressed with a product
- Research existing products to determine what can be improved or modified
- Identify internal issues that are within your control to solve
- Identify any issues or challenges that customers may encounter with a product currently serving the same market as ours
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