Product Development Stages

In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process : one involves the idea generation, product design, and detail engineering ; the other involves market 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.

There are several stages in the new product development process...not always followed in order:

• (1) Idea Generation: Ideas for new products can be obtained from customers (employing user innovation), the company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or through a policy of Open Innovation.
• (2) Idea Screening: The object is to eliminate unsound concepts prior to devoting resources to them. The screeners must ask at least three questions: Will the customer in the target market benefit from the product?, 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: Develop the marketing and engineering details and test the concept by asking a sample of prospective customers what they think of the idea
• (4) Business Analysis: Estimate likely selling price based upon competition and customer feedback, estimate sales volume based upon size of market and estimate profitability and breakeven point.
• (5) Beta Testing and Market Testing: Produce a physical prototype or mock-up. Test the product (and its packaging) in typical usage situations. Conduct focus group customer interviews or introduce at trade show. Make adjustments where necessary. Produce an initial run of the product and sell it in a test market area to determine customer acceptance
• (6) Technical Implementation: Involves managerial planning and focusing on feedback. Make necessary adjustments to ensure product is ready for launch.
• (7) Commercialization: Launch the product. Produce and place advertisements and other promotions. Fill the distribution pipeline with product. Critical path analysis is most useful at this stage