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 new product development process always starts with idea generation. This involves the search for new product ideas systematically. A company can generate new ideas from two sources including the internal source where employees and other staff of the company contribute to ideas. The other one is external idea sources where the company collects its ideas externally like form distributors, customers, suppliers and also competitors.
Idea screening is the next step in the new product development process. This is an important step that ensures only good ideas are selected and the bad ones are rejected. This way, the company will remain with only a few number of ideas and this will help cut on costs. The unsuitable ideas will be eliminated based on things like affordability, market potential and ROI.
When the idea has passed the screening process, the other step is concept development and testing. The new product idea is converted into a concept that consumers will be able to understand. This way, the consumers can be able to perceive the product and give their reaction. The detailed version of concept provided will help consumers have an idea of what the actual product looks like. When it comes to testing, the concept can be tested to target audience either through physically or symbolically.
The next step that follows in this process is the marketing strategy development. This stage involves development of a marketing strategy for introducing the new product into the market. The marketing strategy can be formulated to include the description of target market, planned price of the product and marketing mix strategy.
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. In order to know the sales f the new product, the company can look at the sales history of similar products or conduct a market survey.
If the product is found to satisfy the company’s objectives, it is moved to the next stage of product development. Here the actual product is developed into something tangible for consumer testing. The second last step in the new product development process is test marketing. The whole concept is for the marketer to have to have an experience of testing the product.
Finally, the last stage in the new product development process is commercialisation. 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.