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. There is the internal idea sources where he company generates new ideas internally. Apart from the internal sources, the company may get new product ideas externally from distributors and suppliers as well as customers.
Idea screening is the next step in the new product development process. Here, screening takes place to get rid of unsuitable ideas as soon as possible. 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. Some of the factors considered when screening ideas include affordability, market potential and its ROI.
When the idea has passed the screening process, the other step is concept development and testing. Here, you want to develop the idea into a product concept which is elaborated in consumer terms. 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. These concepts can be provided to consumers physically or symbolically.
The next step that follows in this process is the marketing strategy development. Here, the market strategy for introducing the product into the market is developed. It has three parts which include; description of the target audience, the price, distribution and marketing budget and lastly, marketing mix strategy and profit goals.
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.
When the product has passed the business test, it goes to product development stage. 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. Here, the product is tested in a market setting so that the marketer can have an experience before introducing the whole package.
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. The company should come up with a good location to launch the product to attract potential customers.