New Product Development Process

Step 1- Idea Generation

a) b) c) d) e) f) Attribute Listing Forced Relationship Morphological Analysis Reverse Assumption Analysis New Contents/ New Context Mind Mapping

a)
b)

c)

Attribute listing is a process of preparing a check list about the various characteristics of a futureristic product. Listing all the characteristics of an object that are markedly different from the product that is to be changed. The process of considering each idea in relation to each other and developing a generalized relationship. It starts with identification of a problem and ends with listing every possible combination which is possible. Ex: Cereal as breakfast Cereal as desert

d) In this the normal assumptions are not taken. They are identified and then reserved. Ex : In a restaurant instead of serving what is in the menu, the customer is left to decide the menu and theme himself.
e) When a familiar processes ex involving human health are put in new contexts like day care home, crehes, old age home, health parlour, stress reduction, reakee therapies, gymnasiums, clinical therapies, it is referred as development of new context and new content.

f) Preparing a checklist of ideas generated by various employees as a result of brainstorming. Ex Procter& Gamble, Diamler, Intel.

Step 2- Idea Screening

Is the product idea compatible with objectives, strategies resources. Select the best idea, have the resources and go ahead with the product. The process of Selecting, Short listing, Prioritizing the various ideas is known as idea Screening. It suffers from 2 limitations. Drop Error- When a company misses a good idea. Go Error: When a company permits a poor idea to move into development and commercialisation.

Step 3 Concept Development and testing

A product idea can be turned into several concept. Each Concept represents the category that defines the product.

Concept testing
It involves presenting the product concept to target customers and getting their reactions. Ex ; In case of electronic goods and durables companies are using prototyping i.e. developing tentative experimental designs of the products bases on various concepts using IT tools such as computer aided designing and virtual reality.

Step 4 - Marketing Strategy Development

Designing the Initial market Strategy for introducing the product in the market.

First Level
Target Market Size Product Positioning Sales Revenue Market Share Profit Goals

Second Level
Planned Pricing Distribution Market Budget

Third Level
Projected Sales Projected Costs

Step 5 - Business Analysis

It involves the detailed review and projection of relevant market factors, revenues, costs and trends for a proposed new product to determine whether they satisfy company objectives. If they do then the concept can move in the development stage.

Business Analysis
This is a stage of special importance in the new product development process, because several decisions regarding the project are taken based on the analysis done at this stage. This stage will decide whether from the financial and marketing point of view, the project is worth proceeding with. Investment analysis and profitability analysis of the project is made. The projects overall impact on the organisations financial position is made. Firms estimate the demand of the new product as a part of business analysis.

Business Analysis

Business Analysis would involve: The demand Projections Cost Projections Competitors Potential Competitors Required Investment Profitability

Step 6 - Product Development If the product passes through the business test, it moves to the manufacturing department to convert in the physical product. Going from descriptive to the physical products constitute physical product development. Research & Development and engineering are heavily involved. Marketing management also has a role. The attributes visualized for the product must also be designed into the product.

Product Development

Customer Orientation continues to be the focal point as the product takes form. Engineering personnel evaluates the product technically by testing it physically and Marketing personnel determine its brand name, packing, labeling and pricing.

Step 7 Market Testing

The product is introduced into a more realistic market settings to learn how large the market is and how consumers and dealers react to handling, using and repurchasing the product.
It involves a fully developed new product for sale in one or more selected areas and observing its actual performance. The purpose is to evaluate the product and pretest marketing efforts in a real settings. Test marketing allows the marketer to see the feasibility of product in the real test conditions.

Step 8 - Commercialization
After the successful test marketing of the product, the company is ready to introduce the product in its target market. It is known as commercialization. With Commercialization the product will start with its introductory stage of product life cycle.
In the commercialization stages the following factors are to be considered. Acceptance by customers & intermediaries The intensity of distribution (i.e how many outlets) Promotional Mix Competition Price Cost of Commercialization