Stages in New Product Development
Roll your mouse over each step to view its description.
Concept Development & Testing
As the first step of product development, ideas for new products can be obtained from customers, in-house R&D department, competitors, focus groups, employees, salespeople etc.
The objective here is to eliminate unsound concepts prior to resource allocation. Three essential questions to be asked while screening are:
- Who will 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?
This stage is to develop the marketing and engineering details and test the concept by seeking feedback from prospective customers.
At this stage, company calculates its overall return on investment, if the product is launched. If it is profitable, company will produce it else drop the plan.
The product prototype is prepared and tested against typical usage situations. An initial run of the product is produced and sold in a test market to determine customer acceptance.
This stage involves managerial planning and focusing on feedback. Necessary adjustments are made to ensure that the product is ready to be launched in the market.
Commercialization of the product starts at this stage. Advisements and other promotional activities are initiated in full swing by the company.