New Product Development Process

Five steps in the New Product Development Process are:

1. Idea Generation

• Brainstorming – thinking about it
• Creating a new product based on some observed need
• Thinking of a new product based on some accident or chance circumstance

2. Screening

• Getting opinions from
  • Employees
  • Potential customers
  • Media
  • Government
• What are the weaknesses of existing products that are similar
• Is there any competition for a new product
• What are the industry sales and market trends the product idea is based on

3. Idea Evaluation / Concept Development

• Estimate costs, revenue, profit,
• Do market research
• Target market segmentation
  • Describe the main group of people who will be the first customers

4. Development of Product / Business Analysis

• Physically design and manufacture the product
• Estimate likely selling price based upon competition and customer feedback
• Estimate sales volume based upon size of market
• Produce a physical prototype or mock-up
• Test the product (and its packaging) in typical usage situations

5. Commercialization

• “Make enough to sell”
  • Manufacture a large amount to send out to the stores that will stock the items so enough inventory on hand for the public to buy
• Launch “promotion campaign”

Product Development Process:

Opportunity Identification:

• Internal sources
  Company employees at all levels
• External sources
  Customers
  Competitors
  Distributors
  Suppliers
  Outsourcing

Idea Generation (Ideation):

• Cross Functional Team
• Generate Ideas

• Brainstorming
• Suspend judgment
• Encourage creativity

Identify Opportunity Areas

• Problem solving to bring new ideas to the table
• Sketching or prototype
• Idea prioritization

Generate New Product Concepts and evaluate against a set of company criteria for new products.

Concept Development:

• Done by Marketing and/or Advertising Agency

• Conducting “Focus Groups”
• Objectives

Judge whether the concept fits the opportunity area, and constraints

Refine and / or describe the product concept

• What it is :
• What benefit(s) will it deliver to the user
• Key information – size, varieties, package, price

Concept Screening / Testing:

• Produce a Concept Board
• Conduct a survey

• Representative sample of end users via Internet, Panel
• Show concept and ask buying intent, uniqueness, value

Analyze the results

• Compare scores to internal criteria, benchmarks, norms
• Forecast “Trial”

If end user shows interest in trying the product during the trial
forecast, then the concept qualifies for development – It clears the
first stage gate.