Designing and creating products is a process that begins with an idea, moves to a prototype, and culminates with a live product. No matter what step you are on, whether it is a product, operation, development, test, etc., it matters. Creating a template for future project processes and products makes future work easier. Small and medium-sized companies that develop products, particularly those without product development processes, are worried about whether the product will be delivered on time and will be delivered with high quality. Many companies strive to streamline new product development process and make it more efficient in the construction process.
What is New Product Development (NPD) Process
In new product development (NPD), you create a new product and introduce it to the market. Due to changes in consumer preferences, increased competition, technological advancements, or to seize a new opportunity, your company may need to engage in this new product development process. A business that thrives on innovation knows what its market wants, makes smart improvements, and develops products that meet and exceed customers’ expectations.
‘New products’ can include:
- It is a product that your business has never made or sold but a product that someone else has brought to market.
- New products were created and introduced to the market for the first time. The products might be completely original or modified and improved versions of existing products.
Businesses that already exist are not restricted from participating in NPD. By researching, developing, and releasing new or even one-off products, start-ups, sole traders, and freelancers can create a niche within the market. Similarly, you can master NPD and the new product development process without being an inventor. In addition, you can purchase new products by licensing or purchasing copyrights.
Top Eight Crucial Stages in New Product Development Process
Understanding that there is no generic product development process is crucial to understanding that each rendition will have different depths and details depending on the explanation. Here are the 8 stages of the new product development process explained in this article.
#1 Setting Up a Project: Generation of Ideas
The new product development process begins with the generation of ideas. At this stage, the company develops a variety of unique ideas both internally and externally. By doing so, the company can generate as many viable concepts as possible. A company’s in-house research and development teams are usually the sources of internal ideas, while external sources come from competitor innovations, customer needs, distributors, and suppliers.
The project approval stage is where the core functions of the product manager are reflected, the new product requirements are defined, and the core functions are refined. Rather than focusing on solutions that only meet 20 percent of customer needs, focus on solutions that meet 80 percent. It is possible to progress product development or prototype development more effectively when a team brainstorms, communicates and divides the work effectively. The product design, target market, level of performance, and investment demand are all included.
#2 Filtering Your Ideas
If you have brainstormed and conducted early product surveys, you will probably have a few ideas. Obviously, not all ideas work, and that’s why everyone has to be involved in determining the best option, and of course, a backup plan is also necessary. Conceptual development and product planning are the first steps towards developing a new product; once the project is approved, it moves into the detailed design phase. During this stage, you will design and build prototypes of products and develop tools and equipment used in production.
The design-build-test cycle is the foundation of detailed product engineering. Defining the required products and processes conceptually and embodying them in a prototype (whether in a computer format or in a physical medium) is the first step, and the prototype will be tested for analog use after that. During the design-build-test cycle, a product development engineer should modify the prototype to include the desired performance characteristics, if the prototype fails to demonstrate these characteristics. After the detailed product engineering phase is complete, the product is designed to meet the technical requirements and be approved by the sales team.
#3 Validation of the Conceptual Model
Developing a product begins at the third stage. Several product concepts are then compared with competitors to determine their marketing and positioning strategies. Customers are introduced to product concepts in prototype form so that their reactions can be understood. A company can use small-scale experiments to verify concepts and opinions before developing a new product. Samples can be created, and potential customers can be consulted. Once the concept prototype has been received, the prototype test and the quality control process follow. Each part needs to fit perfectly. The problem can be solved in advance if it is found at this stage.
#4 Create Marketing Plans for New Products
During this step, the company strives to develop new strategies for introducing a new product to the market. With the product launch, selection of distribution channels, and first-year budget requirements, a further marketing strategy was developed based on market size, demand, growth potential, and profit estimates for prior years.
#5 Create a Business Model for New Products
Starting with estimated sales, purchase frequency, and the nature of the business, the business model, is determined. The next step is to estimate the cost and expense of producing and distributing the new product. This is how the profit estimate is calculated. Discounted cash flow analysis is commonly used to assess whether a new product is viable.
#6 Producing New Products in Reality
The company has created a variety of products, including prototypes and final products. From a technical and commercial perspective, determine whether it is viable to continue production. An analysis is run in this step of the new product development process that shows the costs are higher than the estimated amount resulting in the abandoned project.
#7 New Product Market Testing
With the help of brand names, packaging, and prices, new products are prepared to capture consumers’ attention. In the future, the focus will be on the users after the launch of advertisements, advertorials, and products. It is the ability of operators to provide excellent user experiences to allow users to love the product, and they cannot live without it. It is the ability and trust of operators to let the users use the products for the first time and let them know about them. Additionally, it must be demonstrated that “good products come from operation”. It is more common for software products to include product instructions, while the web is more likely to feature FAQs.
Commercialization is the last step of the product development process. Business management may decide to launch the product based on the information gathered during the test marketing process or put it on the backburner based on the information gathered. Commercialization is the process of introducing a product to the market once it has been given the go-ahead. The initial infrastructure investment and promotion and advertising costs are usually quite high at this stage.
Remind Yourself: This is a loose process.
Throughout developing a new product, errors will be made, designs will be trashed, and loss could occur. Working in synchrony with all team members will ensure the success of your launch, even if you have to reinvent the wheel. The only way to ensure productivity during the new product development process is to spell out goals along the way and to have contingencies outlined on paper for each stage of the process.
Related Article: Software Architecture : 5 Principles You Should Know
The Importance of the Product Development Process
Companies and societies depend on product development for survival. Effective product development will provide the following:
- Creating new value for customers: Every new development must offer new value to the customer as its first and foremost goal. This is the only thing that would make them trade in their money for the new device. A product or service that offers overwhelming value, however, will draw customers in droves. Companies grow because of new and increasing value. Firms that lack new value for customers eventually wilt and die. When a company’s value isn’t increasing, it loses market share because its competitors are increasing their value.
- An improved society: Many new products are incremental improvements over the previous versions, which are only slightly faster or have a few new features. The products provide enough new value to generate revenue for the company, but they are hardly a boon for society. There are certain times when new products will benefit society more profoundly than simply satisfying consumers’ immediate needs. Novel drugs for the treatment of debilitating diseases and automotive safety devices that save hundreds of lives annually are examples of these. Though neither of these offers immediate satisfaction to a consumer, they save lives and help society in the long run.
- Growth and Existence of the Company: The lifeblood of any company is the development of new products and services. If they are not present, the firm withers and dies, or another company absorbs it. By operating these companies, society benefits from the jobs provided to employees (who are also consumers) and taxation and charitable contributions.
Throughout the new product development process, the primary focus is on ensuring that the product meets customers’ needs and is well received in the market. Furthermore, each company needs to evaluate whether or not such an undertaking is achievable within the financial and administrative resources at its disposal in light of the demands of the product production. The eight-stage new product development process is by no means an absolute framework that will guarantee a successful product launch. Still, it certainly offers a solid starting point for any business looking to launch a new product.