Your products are the engine for your business’ growth. They satisfy customers’ need and bring you the money required for boosting your company. But there is a caveat. In the modern, fast-paced world, product life cycle is growing ever shorter. If you want to stay relevant in the marketplace, you have to keep your product portfolio up to date. Which means you have to know when it’s time to start new product development, and how to plan and perform it.
Planning new product development is exactly what we’ll be discussing in today’s piece. You’ll learn all the whats and whys of this process and how to put it in motion in the most efficient way. Take it away!
What is New Product Development?
NPD is a set of actions required to establish a new product: from generating the product concept at the very start, to eventual market launch. In other words, it’s the process of turning your product idea into reality.
Due to the obvious importance of this topic, new product development has been thoroughly researched over the years. This allowed to pinpoint a few key stages that the company should go through as during the NPD process to thrive. These stages may vary a bit depending on the type of your business and the market specifics, but knowing the outline will help you set the correct course for success.
New Product Development Stages
Among the first to research NPD was Robert G. Cooper with his book Winning at new products released in 1968. In it, he coined the term Stage-Gate innovation process, a.k.a. Phase-Gate model. This project management technique turned out quite effective for new product development. In its original form, it included 5 basic steps:
- Building business case
- Testing and validation
Even today, this model remains as relevant as ever, though it did undergo certain amendments along the road. The most contemporary version includes 8 stages of new product development, so let’s take a closer look at them.
1. Generating an idea
That’s where it all starts. The first step of your development journey involves coming up with product ideas (e.g. via brainstorming). While you want to end up with a nice variety of ideas and concepts, make sure they’re not totally random. One way to ensure this is by building them upon the results of the previously conducted SWOT analysis of your business. In other words, your ideas should utilize your strengths, incarnate opportunities, reduce weaknesses, and avoid threats.
2. Identifying good ideas
Now that you’ve got yourself a whole list of ideas, it’s time to get rid of most of them. At this stage, you evaluate your ideas and filter out those that don’t meet your criteria. The key here is to properly determine these criteria. They should be chosen according to your business goals and your current position in the market. Examples of the criteria can include:
- market potential
- existing competition, etc.
3. Testing the ideas
It’s time to test the concepts and ideas that you’ve settled on at the previous stage. You want to check if your understanding of what your customers need correlates with reality. The desired outcome of this stage is a proven concept or idea, along with clearly identified customer needs that you will be able to take into account during product development.
One way to do this is through a consumer survey. You can conduct it as part of your pre-launch marketing activities, or contact your current clients. Ask them some direct questions about your idea or concept, mixed with more general questions that could help you better understand your target audience, probe the ground, so to speak.
4. Business analysis
Now that you know what kind of product you want to develop and what your target audience needs, see how it fits your business strategy. For this, build a proper metrics system (e.g. development time, product value, or a percentage of sales), carefully and deliberately set your business goals, outline a strategy based on them, and choose a fitting, goal-oriented planning digital tool, such as Goals by KeepSolid. It will help you evaluate your progression on the way from your marketing strategy to your goals.
At last we’ve come to the development itself. This stage can potentially take up the most time and resources, so it’s important that you stick to the strategy and goals defined at the stage 4. In addition to building the product itself, this phase includes preparing its beta release and/or customer testing and survey. Flesh out your design, complete the core content, and implement and test the planned features. Also, make sure your Q&A team thoroughly tests your product before it gets into customers’ hands.
6. Beta testing
Now that you’ve got yourself a working version of your product, it’s time to create a consumer test group and let them pull it to pieces. You want to collect the honest feedback, however harsh and upsetting it may be. The more issues are pinned down at this stage, the faster and cheaper it will be to fix them.
We’re almost done! At this stage you should determine your pricing model and give the final touches to your marketing plans. Focus on your distribution and sales teams, install the pricing for your product, load your distribution spots. Don’t forget about quality customer service and technical support. Prepare to work with negative feedback and monitor customers’ needs.
8. Product launch
At last! The culmination and payoff of the whole new product development process. You’ve completed your product, conducted market analysis, identified target audience, settled on a marketing strategy and PR program, and prepared a pricing plan. The only thing left is to push your figurative big red button and send your product to the market. You’ve done it! You only leave it to the consumers to determine if it suits their needs. In most cases, if there are similar products in the market, people will always research top products and compare them for the best fit. Give it your best and you will beat your close competitors.
Obviously, your work doesn’t end here. Ahead lies a lot of tweaking and polishing, communicating with customers and tackling unexpected challenges. But that is a story for another day, as the NPD, or new product development, is wrapped up.