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 development of a new product will start with 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.
After they have gathered several ideas, the next step is idea screening. 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. The unsuitable ideas will be eliminated based on things like affordability, market potential and ROI.
The third stage in new product development process is concept development and testing. The idea is then explained in a concept that is meaningful for consumers to comprehend. The idea which is now a concept is tested to the consumers in order to get their feedback and reactions. It is also crucial to provide in-depth information so that they will have a clear image of the actual product. Besides, the concept testing can either be done symbolically or physically.
After testing the concept and analyzing whether consumers need or want the product, the step that follows is the marketing strategy development. Here, the market strategy for introducing the product into the market is developed. It involves three stages which are; a description of the target market, the products planned price and the profit goals as well as marketing mix strategy to be used.
Business analysis is the other step in the new product development process. Here, you want to find out whether factors like sales, cost and profit will meet the business objectives. The company can estimate the sales by conducting market surveys and looking at past history of similar products.
When the product has passed the business test, it goes to product development stage. The business concept is developed into an actual product that can be tested by consumers. 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. The product is introduced into the market and costs such as advertising and promotion are incurred. The launching place should also be put into consideration.