This document outlines the new product development process and its importance. It discusses the 7 main stages: 1) idea generation, 2) screening, 3) concept development and testing, 4) business analysis, 5) product development, 6) market testing, and 7) commercialization. It emphasizes that new products are critical for business growth but have high failure rates, so a thorough process is needed to develop successful innovations.
This document outlines the new product development process and its importance. It discusses the 7 main stages: 1) idea generation, 2) screening, 3) concept development and testing, 4) business analysis, 5) product development, 6) market testing, and 7) commercialization. It emphasizes that new products are critical for business growth but have high failure rates, so a thorough process is needed to develop successful innovations.
This document outlines the new product development process and its importance. It discusses the 7 main stages: 1) idea generation, 2) screening, 3) concept development and testing, 4) business analysis, 5) product development, 6) market testing, and 7) commercialization. It emphasizes that new products are critical for business growth but have high failure rates, so a thorough process is needed to develop successful innovations.
This document outlines the new product development process and its importance. It discusses the 7 main stages: 1) idea generation, 2) screening, 3) concept development and testing, 4) business analysis, 5) product development, 6) market testing, and 7) commercialization. It emphasizes that new products are critical for business growth but have high failure rates, so a thorough process is needed to develop successful innovations.
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New Product Development Process
Chapter No 5 Chapter Outlines
Importance of Product Innovation
Requirement for Growth High Failure Rates
Development of a New Product
What is a New Product Stages in the New Product Development Process Importance of Product Innovation Requirements for Growth Every organization need new products/innovation for the growth of their organization. Now-a-days in this modern era there is such fast competition that organization can not survive without bringing innovation. For Example: Apple Inc is famous for innovation, a sign of growth.
High Failure Rates
The existing products of organization has greater failure rate due to the technology advancement, change in the taste of consumers and due to tough local and foreign competition, therefore organization should bring product innovation. For Example: P1, P2 and P3 face high failure due to change in technology. New Product Development Process
1. Idea Generation 2. Screening 3. Concept Development and Testing 4. Business Analysis 5. Product Development 6. Market testing 7. Commercialization New Product Development Process Step 1. Idea Generation
Internal Sources: Research and Development can be done in market for more new and customer oriented ideas. Employees can also give good ideas according to the objectives and capability of organization For example, Samsung has built a special center to encourage and support new product innovation ideas internally by their employees. New Product Development Process Step 1. Idea Generation External Sources: Customers. The Company can analyze customer questions and complaints to find new product that better solve consumer problems. Competitors. The company buy competitors product to analyze their sale, and to see how it works and decide whether they should bring out a new product of their own. Distributors. Distributer are close to the market and can pass information about consumer problems and new product possibilities. Suppliers. Suppliers can tell the company about new concepts, techniques and materials that can be used to develop new product.
8-6 New Product Development Process Step 2. Idea Screening
“Idea screening is the process to spot good ideas & drop poor ones”. The screeners must ask at least these questions: Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment/target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends on which the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price? New Product Development Process Step 3. Concept Development & Testing
Develop the Marketing and Engineering Details
• Who is the target market and who is the decision maker in the purchasing process? • What product features must the product delivers? • What benefits will the product provide? • How will consumers react to the product? • How will the product be produced most cost effectively (with lowest price)? • What will it cost to produce the product? • Testing the concept by asking a sample of prospective customers that what they think of the idea. New Product Development Process Step 4. Business Analysis
Business Analysis Estimate likely selling price based upon competition of same and substitutes products in the market by customer feedback. Estimate sales volume based upon size of market Estimate profitability and break-even point of your product that you want to offer in the market. New Product Development Process Step 5. Product Development
Product Development; Developing the product concept into physical product in order to ensure that the product idea can be turned into a workable product. New Product Development Process Step 6. Market Testing
Test the product (and its packaging) in the market on small
scale in typical usage situations. Conduct focus group customer interviews or introduce at trade shows or seminars to target customers. Make adjustments where necessary, as suggested by the target customers in the test marketing session. Produce an initial sample of the product and sell it in a test market area to determine customer acceptance and feedback for improvement. New Product Development Process Step 7. Commercialization
Commercialization means launching the product
in the market on large scale. Produce and place advertisement and other promotions in the market. Fill the distribution channel with products which you want to launch. Critical path analysis is most useful at this stage which means that you should analyze each possible best option for launching the product in the market.
