Technology | 13-09-2021 | Harnisha
Innovations and New Product Development (NPD) are imperative to keep any business growing. When a company develops a product, there is a process and steps to follow. It will ensure that you are building the best product for your audience.
A problem arises when entrepreneurs skip any of the steps to make the process shorter. They have absolutely no idea it will end up with plenty of barriers.
NPD includes all the required steps to plan, create, and promote new products. Obviously, you need to invest time and financial resources in products. But before, make sure you have researched thoroughly about each aspect of the market and the development process.
It is a systematic guide for all businesses and entrepreneurs. The process will help them to create customer-centric products without compromising quality. Usually, it contains 7-8 steps within the process.
A new product does not mean a new-to-the-world product. Very few of all new products are truly innovative and unique. Businesses mostly upgrade existing products and relaunch them.
But no matter the type of new product a company develops, they should follow a proper method. It will effectively turn product ideas into reality.
Everyone knows that consumer needs are constant. It will keep changing rapidly as per technology innovations. So businesses need to improve their product accordingly. They have to provide something new or better than the previously produced.
Companies often attempt to outshine and achieve a competitive advantage over others in the same target market. NPD is necessary to keep pace with,
● Changing customers needs
● Increasing competition
● Technological innovations
● New opportunities for growth
● To boost brand awareness and reputation
● To utilize excess capacity
According to Mckinsey global institute,
● Four out of Seven product ideas get into the product development phase
● Three products get launched out of fourteen product ideas
● One out of Seven product ideas can provide a successful product
● The failure rate of launched products is between 25% to 45%
When you follow well-assessed strategies, you can escape from common deadfalls such as,
● Selection of wrong time to publish the product
● Misinterpretation of consumer needs
● Poor product design and marketing
● Overestimation of market size
● Very high product price
● Competition risks
● High development costs due to resource overuse
Here is an insight into each NPD phase to better understand how to develop a new product.
In this phase, you need to go through various iterations of a product. It will help you to discover unique features to excel in the competition. Consumers’ needs are changing each day like technology. So, your product must be something that you can improve and upgrade by the time. You have to research what gets better for the users and business.
You will get new product ideas from different sources like,
● Internal sources (R&D)
● External sources (Competitors, Customers, Distributors, and Suppliers)
● Brainstorming (Engineers, Scientists, Managers, Marketing people)
Generating a good product idea is your starting point. Carefully assess each one to identify whether you should pursue or dump.
When you want success, it is necessary to determine and test good product ideas. Your ideas must also belong to the overall business strategy. Please check on,
● Relevancy and desirability of new product
● Profitability of your idea
● Requirement of the market
● Affordability of resources
● Customer behavior and expectations
● Technical feasibility
If your product does not meet the goals of the screening process, you need to discard that idea. Again start the process with new idea generation. If you pass with the screening process, the next step is to create an in-depth concept and check feasibility.
You can also perform SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for your ideas. It will help to discover their benefits and drawbacks.
The next step is to assess possible expenses, revenues, and profits emerging from the product.
● Do potential consumers acknowledge the product idea?
● Will they be responsive to the idea?
● Do they really need such a product?
● Will they try out a product when it is ready to use?
All these questions need to get tested with a targeted audience. It will make the product concept clear and more focused. Concept testing assists in picking the best one among other ideas. Discard all the poor thoughts as soon as possible.
Involving your audience in this process can get you some brilliant suggestions. Be open to ideas and grab everything that seems beneficial to you.
Now is the phase to be strategic. Decisions about marketing and branding are one of the main components of building a business strategy. Start with defining your target customers and identifying your product position.
Product position means analyzing
● Customer needs
● Competitive constraints
● Communication channel you are planning to use
Assure your ideas fit into your business’ strategic plans. Identify market demands, overall expenses, and profit margin. Come up with strategies to deliver promising products into the market.
It is the final phase before the production of a prototype. Thus, gather as much information as you can. It will help to identify the costs fit in with your overall strategy or not.
The idea on a paper is all set to convert into a product now. The product is created according to the customer's needs and desires. The main goal of this stage is to,
● Further determining a target market
● Discover necessary features and attributes that are important to add
● Identify the most cost-effective ways to produce the product
● The actual cost of production
Build a prototype where the designing aspect is very critical. Check out whether your product idea is feasible with design, development, and safety.
Also, focus on testing and evaluating the prototype. Share experience and views through the testing process. Validate the defined features are available in the design.
The amount of testing differs based on the product you are going to produce. Products with high risks need to go through further testing.
This phase aims to mitigate the doubtfulness spinning around product success. Assess the feasibility of your marketing campaign.
Perform alpha testing by judging the product based on performance. Check product performance and map marketing mix results.
Beta testing enables customers to use your product and get unbiased feedback. It is about listening to VOC (Voice-Of-Customers). On arising any issue, go back to the development team to fix it.
You can also apply IHUT (In-Home Usage Test). Intended customers use the product and provide their feedback.
Set the pricing of the product and finalize marketing plans. To decide the proper value, you need to consider some factors like,
● Impact of the product on your whole portfolio
● Advantages to the customers
● Possibility of customers to pay the expense you will decide
● Competitor’s pricing
● various selling channels you plan to use
● The expected life cycle of your product
Realistically consider the costs of equipment, processes, devices, and administration. Explore various suppliers and expenses of marketing/distribution.
A well-thought-out launch can be effective. It will let you get in front of your audience and drive customers.
But some entrepreneurs make mistakes by discontinuing advertising their product after launching. Without a powerful marketing strategy, the product life cycle gets limited.
Try to assess the market demand you will face and plan accordingly. Be ready with your marketing strategies and ensure it contains digital marketing.
Even after a product gets launched, keep collecting valuable data. Make changes as per market needs. Consistently track the progress of your product.
A new product is the outcome of multiple steps taken by a company. Starting from conceptualization to effective commercialization, each step is essential. You can tailor every phase to work well with processes and the teams’ architecture.
The focus should be on delivering the best customer value.
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