Introduction
Improving and updating product line is crucial for the success for any organization. Failure for an organization to change could result in a decline in sales and with competitors racing a head. The process of product development is crucial with in organization products go through the stages of their life cycle and will eventually have to be replaced.
Process of new product development
In business and engineering, new product development is the term used to describe the complete process of bringing new product or service to market. There are two parallel paths in the new product process;
One involves the idea generation, product design and detail engineering.
The other involves marketing research and marketing analysis.
Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle. Management used to maintain or grow their market share.
The process
1. Idea generation
New product idea have to come from somewhere but where do organizations get their ideas for new product development.
Ideas for new products can be obtained from basic research using a SWOT analysis, market and consumer trends, companies research and development department, competitors, focus groups, employees, sales people, corporate spies, trade shows or ethnographic discovery method may also be used to get an sight into new product line or product features. Idea generation or brain storming of new product, service or store concepts- idea generation technique can begin when you have done OPPORUNITY ANALYSIS to support your ideas in the idea screening phase.
2. Idea screening
This process involves shifting through the idea generated above and selecting ones which are feasible and workable to develop pursing non feasible ideas can clearly be costly for the company.
The object is to eliminate unsound concepts.
The screeners must ask at least three questions;
Will the consumer in target market benefit from the product?
What is the size and growth forecasts of the market segments/ target market?
What is the current or expected competitive pressure for the product idea?
What are the industry sales and market trends 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?
3. Concept development and testing
The organization may have come across what they believe to be a feasible idea, however, the idea needs to be taken to the target audience;
What do they think about the idea?
Will it be practical and feasible?
Will it offers the benefit that organization hopes it?
Will have they overlooked certain issues?
Note the idea and concept is taken to the target audience not a working prototype at this stage.
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 be product incorporate?
What benefits will the product provide?
How will consumers react to the product?
How will the product be produced most cost effectively?
Prove feasibility through virtual computer aided rendering and rapid prototyping?
What will it cost to produce it?
4. Business analysis
In business analysis following three types of estimate are made;
Estimating future sales
Estimating future costs
Estimating future profits
Estimating future sales
For business analysis, first we estimate future sales of the product. Though, it is very difficult to forecast the sales of a product which have not yet been developed, but efforts are made to have an idea of these sales.
Estimating future costs
Different elements of the costs are analyzed. Estimating future costs of the product t o be developed provide a real base for measuring the profitability of a product.
Estimating future profits
After estimating future sales and costs of a product producer estimate future profits. It is also considered whether these profit will provide desired rate of return on capital invested or not. If not, the idea is dropped and if yes, it is finally selected.
5. Product development
Finally it is at stage that a prototype is finally produced. The prototype will clearly run through all the desired tests, and be presented to the target audience to see if changes need to be made.
Product stage development includes;
Produce a physical prototype or mock-up.
Test the product (and its packaging) in typical usage situations.
Conduct focus grow customer interviews or introduce at trade show.
Make adjustments where necessary.
Produce an initial runoff the product and sell it in a test market area to determine customer acceptance.
6. Test marketing
It means testing the product with in a specific area. The product will be launched with in a particular region. So the marketing mix strategy can be monitored and if needed, be modified before national launch.
According to Philip kotler ” test marketing is the stage where the entire product and marketing programme is tried out for the first time in a small number of well chosen and authentic sales environments “
Reasons for testing
o To know the reaction of the consumers.
o To know the defect and alternatives.
7. Commercialization
If test marketing stage has been successful then the product will go for national launch. There are certain factors that need to be taken into consideration before a product is launched nationally. These are;
Timing
How the product will be launched?
Where the product will be launched?
Will there be a national roll out or will it be region by region?
Commercialization mainly include;
Launch the product.
Produce and place advertisement and other promotions.
Fill the distribution pipelines with product.
Critical path analysis is most useful at this stage.
Conclusion
Product development includes the technical activities of the product research, engineering and design. Product development is the process of finding out the possibilities of producing a product keeping in view the customers needs and wants. It includes the decision as to whether it would be feasible or not to produce the product and whether it would be profitable or not for the enterprise to do so. Product development also includes modification of existing products and elimination of unprofitable products.
New product is a product that is new to the manufacturer producing it even though it may have been made in same form by others.
Improving and updating product line is crucial for the success for any organization. Failure for an organization to change could result in a decline in sales and with competitors racing a head. The process of product development is crucial with in organization products go through the stages of their life cycle and will eventually have to be replaced.
Process of new product development
In business and engineering, new product development is the term used to describe the complete process of bringing new product or service to market. There are two parallel paths in the new product process;
One involves the idea generation, product design and detail engineering.
The other involves marketing research and marketing analysis.
Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle. Management used to maintain or grow their market share.
The process
1. Idea generation
New product idea have to come from somewhere but where do organizations get their ideas for new product development.
Ideas for new products can be obtained from basic research using a SWOT analysis, market and consumer trends, companies research and development department, competitors, focus groups, employees, sales people, corporate spies, trade shows or ethnographic discovery method may also be used to get an sight into new product line or product features. Idea generation or brain storming of new product, service or store concepts- idea generation technique can begin when you have done OPPORUNITY ANALYSIS to support your ideas in the idea screening phase.
2. Idea screening
This process involves shifting through the idea generated above and selecting ones which are feasible and workable to develop pursing non feasible ideas can clearly be costly for the company.
The object is to eliminate unsound concepts.
The screeners must ask at least three questions;
Will the consumer in target market benefit from the product?
What is the size and growth forecasts of the market segments/ target market?
What is the current or expected competitive pressure for the product idea?
What are the industry sales and market trends 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?
3. Concept development and testing
The organization may have come across what they believe to be a feasible idea, however, the idea needs to be taken to the target audience;
What do they think about the idea?
Will it be practical and feasible?
Will it offers the benefit that organization hopes it?
Will have they overlooked certain issues?
Note the idea and concept is taken to the target audience not a working prototype at this stage.
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 be product incorporate?
What benefits will the product provide?
How will consumers react to the product?
How will the product be produced most cost effectively?
Prove feasibility through virtual computer aided rendering and rapid prototyping?
What will it cost to produce it?
4. Business analysis
In business analysis following three types of estimate are made;
Estimating future sales
Estimating future costs
Estimating future profits
Estimating future sales
For business analysis, first we estimate future sales of the product. Though, it is very difficult to forecast the sales of a product which have not yet been developed, but efforts are made to have an idea of these sales.
Estimating future costs
Different elements of the costs are analyzed. Estimating future costs of the product t o be developed provide a real base for measuring the profitability of a product.
Estimating future profits
After estimating future sales and costs of a product producer estimate future profits. It is also considered whether these profit will provide desired rate of return on capital invested or not. If not, the idea is dropped and if yes, it is finally selected.
5. Product development
Finally it is at stage that a prototype is finally produced. The prototype will clearly run through all the desired tests, and be presented to the target audience to see if changes need to be made.
Product stage development includes;
Produce a physical prototype or mock-up.
Test the product (and its packaging) in typical usage situations.
Conduct focus grow customer interviews or introduce at trade show.
Make adjustments where necessary.
Produce an initial runoff the product and sell it in a test market area to determine customer acceptance.
6. Test marketing
It means testing the product with in a specific area. The product will be launched with in a particular region. So the marketing mix strategy can be monitored and if needed, be modified before national launch.
According to Philip kotler ” test marketing is the stage where the entire product and marketing programme is tried out for the first time in a small number of well chosen and authentic sales environments “
Reasons for testing
o To know the reaction of the consumers.
o To know the defect and alternatives.
7. Commercialization
If test marketing stage has been successful then the product will go for national launch. There are certain factors that need to be taken into consideration before a product is launched nationally. These are;
Timing
How the product will be launched?
Where the product will be launched?
Will there be a national roll out or will it be region by region?
Commercialization mainly include;
Launch the product.
Produce and place advertisement and other promotions.
Fill the distribution pipelines with product.
Critical path analysis is most useful at this stage.
Conclusion
Product development includes the technical activities of the product research, engineering and design. Product development is the process of finding out the possibilities of producing a product keeping in view the customers needs and wants. It includes the decision as to whether it would be feasible or not to produce the product and whether it would be profitable or not for the enterprise to do so. Product development also includes modification of existing products and elimination of unprofitable products.
New product is a product that is new to the manufacturer producing it even though it may have been made in same form by others.
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