The New Product Development Proces s
The N e w Pr o d uc t De ve lo pme nt Pr oc es s Ta bl e of Contents
Generating the Idea ............................................................................................................................... 1 New Product Development in Business and Engineering .............................................................. 1 The ‘Front End’ of the Process......................................................................................................... 1 The Process ........................................................................................................................................... 3 1. 2. 3. 4. 5. 6. 7. Idea Generation ......................................................................................................................... 3 Idea Screening ........................................................................................................................... 3 Concept Development Testing ................................................................................................. 3 Business Analysis...................................................................................................................... 3 Beta and Market Testing ........................................................................................................... 4 Technical Implementation ........................................................................................................ 4 Commercialization (often considered post-NPD) ................................................................... 4 Strengths and Weaknesses ........................................................................................................... 5 New Product Design ............................................................................................................................. 5 Market Potential/Target Demographic ................................................................................................ 6 Market Research Analysis.................................................................................................................... 6 Kinds of Market Research ................................................................................................................ 6 Buy Reports .................................................................................................................................. 6 Run Surveys .................................................................................................................................. 6 Market Research Types ........................................................................................................................ 7 Quantitative Research .................................................................................................................. 7 Qualitative Research .................................................................................................................... 7 Developing the Cost Analysis .............................................................................................................. 7 Sample Cost Analysis Worksheets ...................................................................................................... 8 Supporting Documentation ................................................................................................................ 11 References ........................................................................................................................................... 14
The SWOT Analysis ......................................................................................................................... 4
The N e w Pr o d uc t De ve lo pme nt Pr oc es s Generating the Idea
The ability to consistently introduce new products is essential to many companies’ future growth and success. Marketing personnel who are in charge of product decisions habitually follow set procedures for bringing products to market. In the scientific area of the industry, it may mean establishing ongoing laboratory research programs that are responsible for discovering new products in the medical field. Some companies may not follow a deliberate step-by-step course of action. Non scientific companies may pull together resources for product development and use a timetable that is more informal. In both circumstances, the steps are useful for showing the information input and decision making that must be done in order to successfully develop new products. The course of action also shows the important role that market research plays when developing products. The 7-step process works for most industries; however it is less effective when developing products that are brand new to the market. The foremost reason lies in the target market’s inability to provide adequate feedback on advanced product concepts because they often find it hard to grasp ideas that are completely different. Many of these steps are used to research breakthrough ideas; however, the sales personnel should exercise caution in their attempts to interpret the results, as they may be misleading.
New P roduct Develop ment in Busin es s and Engineering
Both in business, and in engineering, new product development (NPD) describes the complete process that brings a new product or service to market. There are two parallel paths associated with the NPD process: 1. Generating the idea a) Product design b) Detail engineering 2. Market research a) Marketing analysis Usually companies look at new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management which used to maintain or grow their market share.
The ‘F ront End’ of th e Pro cess
This is what lays the foundation for a new product development process. The front end is where the organization develops the product’s concept and then decides whether or not to invest time and resources into a further development of the idea. It is the period between when an opportunity is first considered, and when it is deemed ready to enter into a structured
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The N e w Pr o d uc t De ve lo pme nt Pr oc es s
development process. It takes into account all activities from the search for new opportunities through the formation of a germ of an idea, all the way through to developing an exact concept. This is when an organization approves and begins the concept’s formal development. Although this may not be an expensive part of the product development process, it can consume as much as 50% of the development time. This is the point when major commitments of time, money, and the product’s nature are made. This component sets the course for the whole entire project, as well as the project’s end product. This part