New Product Development Process: Simplified
The definition, steps & why it’s important to automate your New Product Development Process.
The definition, steps & why it’s important to automate your New Product Development Process.
“By new product we mean original products, product improvements, product modification and new brands that the firm develops through its own research and development efforts”.
Source: William J. Stanton, M.J. Elzel and B.J. Walker.
Source: William J. Stanton, M.J. Elzel and B.J. Walker.
A product can be new to the company or to the market.
Based on this, 6 categories of new product introductions are identified. Here’s the list of New Product Categories.
These products are entirely new to the company and to the world.
These products allows a company to enter into an already established market. Product is not new to the market. But it’s new to the company.
These products supplements a company’s existing product line.
A better version of an existing product that will replace the current one.
Existing products that are targeted to new markets or market segmentation.
Existing product with similar features and performance but given at a lower cost.
Source: William J. Stanton, M.J. Elzel and B.J. Walker.
Products do have limited life spans. And new products just don’t appear out of nowhere. Therefore, New Product Development is an essential part of a company if you are to thrive in the market place, if not at least remain relevant.
There are various cost associated with introducing new products such as engineering, sales, marketing, distribution, etc. and this cost is very much significant for a company in most of the cases.
If not handled properly, instead of substantial profits, an introduction of a New Product may bring losses to a company. This is where the ‘New Product Development Process’ comes in.
There are 8 stages identified in the New Product Development Process.
This is the search for new ideas for a company. It could come internally or from outside such as customers. Important thing here is that, there has to be a proper systematized way of capturing large number of ideas.
There’s significant cost a company would incur even during the NPD process. Objective of this step is to filter out and only keep ideas that would later turn in to profitable products.
The product concept is about how end consumer perceives the product. Company can come up with a idea of how the product will be presented. It could be a drawing or a more physical (rough) prototype representation. Either way testing will be done to find out the consumer appeal towards the concept.
Marketing Strategy should include, target market details, product positioning, sales/profit goes for first few years. It should also include, planned price, distribution strategy and the marketing budget
Management will evaluate the strategy developed. Evaluation will specifically focus on key areas such as cost, sales and profits for the coming years.
An advanced prototype or the actual product is developed here. It will then be tested for features and functionality. It's also externally tested with the consumers to get their feedback.
This is about testing the product in a realistic market setting. For example, if it’s a physical product, the whole marketing strategy will be run in few stores or it could even be a city. The effectiveness of the strategy is then measured.
Management makes the final decision on the launch of the product. Then comes the important decisions to make, when to launch, where to launch and how to launch.
Rapid commercialization is the main objective of every New Product Development Process. Manual way of NPD such as using emails, spreadsheets and non-suited software may have following disadvantages,
So, manual approach actually do more harm to the company than any good.
Tired of spending too much manual time on the NPD Process? A good New Product Development Process tool should give NPD team and the management a dose of motivation to traverse through the NPD process effortlessly and launch products fast.
With an automated NPD Workflow, team can spend less time buried under paperwork & endless meetings and spend more time exploring new ideas, looking at the real product development process and launching more products fast. WorkHub24 New Product Development Workflow Software is the answer to getting rid of your tiresome NPD process and start launching more products on time. Click here to see more details of WorkHub24 NPD Process Automation Workflow.
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