New Product Development Strategies
New Product development is a journey. It’s the road which leads to the actual product and then the actual product to the market. As it is said, it all starts with an idea. Every product goes through a number of stages before being introduced in the market.
The first stage of the New Product Development is the idea generation. Ideas come from everywhere, can be of any form, and can be numerous. This stage involves creating a large pool of ideas from various sources, which include
- Internal sources– many companies give incentives to their employees to come up with workable ideas.
- SWOT analysis– Company may review its strength, weakness, opportunities and threats and come up with a good feasible idea.
- Market research– Companies constantly reviews the changing needs, wants, and trends in the market.
- Customers– Sometimes reviews and feedbacks from the customers or even their ideas can help companies generate new product ideas.
- Competition– Competitors SWOT analysis can help the company generate ideas.
Ideas can be many, but good ideas are few. This second step of new product development involves finding those good and feasible ideas and discarding those which aren’t. Many factors play a part here, these include –
- Company’s strength,
- Company’s weakness,
- Customer needs,
- Ongoing trends,
- Expected ROI,
- Affordability, etc.
Concept Development & Testing
The third step of the new product development includes concept development and testing. A concept is a detailed strategy or blueprint version of the idea. Basically, when an idea is developed in every aspect so as to make it presentable, it is called a concept.
All the ideas that pass the screening stage are turned into concepts for testing purpose. You don’t want to launch a product without its concept being tested, right?
The concept is now brought to the target market. Some selected customers from the target group are chosen to test the concept. Information is provided to them to help them visualize the product. It is followed by questions from both sides. Business tries to know what the customer feels of the concept. Does the product fulfil customer’s need or want? Will they buy it when it’s actually launched?
Their feedback helps the business to develop the concept further.
Business Strategy Analysis & Development
The testing results help the business in coming up with the final concept to be developed into a product.
Now that the business has a finalized concept, it’s time for it to analyse and decide the marketing and other business strategies that will be used. Estimated product profitability is estimated, marketing mix, and branding strategies are decided for the product.
- Competition of the product
- Costs involved
- Pricing strategies Breakeven point, etc.
Once all the strategies are approved, the product concept is transformed into an actual tangible product. This development stage of New Product Development results in building up of a prototype or a limited production model. All the branding and other strategies decided previously are tested and applied in this stage.
Unlike concept testing, here the actual prototype is introduced for research and feedback. Actual customers feedback are taken and further changes, if required, are made to the product. This process is of utmost importance as it validates the whole concept and makes the company ready for the launch.
The product is ready, so should be the marketing strategies. The marketing mix is now put to use. The final decisions are to be made. Markets are decided for the product to launch in. This stage involves briefing different departments about the duties and targets. Every minor and major decision is made before the final introduction stage of the New Product Development.
This stage involves the final introduction of the product in the market. This stage is the initial stage of the actual product life-cycle.