Product development starts with idea generation — these innovative ideas go through screening before reaching the final phase, production and commercialization, reports Chron.
“New product development is a crucial process for the survival of innovative companies. The business environment today is very dynamic and competitive. For enterprises to withstand competition from multinationals, they must continuously update their products to conform to current trends. The new product development process is the cycle that a new product must undergo from conceptualization to the final introduction into the market.” – Reports Daphne Adams from Chron.
This is the initial stage where a business sources for ideas regarding a new product. Some of the sources for new product ideas include the business customers, competitors, newspapers, journals, employees and suppliers. Small businesses may be limited when it comes to technical research-based idea generation techniques. This stage is crucial as it lays the foundation for all the other phases, the ideas generated shall guide the overall process of product development.
The generated ideas must go through a screening process to filter out the viable ones. The business seeks opinions from workers, customers and other businesses to avoid the pursuit of costly unfeasible ideas. External industry factors affecting small businesses, such as competition, legislation and changes in technology, influences the enterprise’s decision criteria. At the end of the screening process, the firm remains with only a few feasible ideas from the large pool generated.
The enterprise undertakes research to find out the potential costs, revenues and profits arising from the product. The business conducts a SWOT analysis to identify the strengths, weakness opportunities and threats existing in the market. The market strategy is set out to identify the product’s target group, which facilitates segmentation of the product’s market. Market segmentation is important as it enables the firm to identify its niche. The identified niche influences most of the marketing decisions.
Product Development and Commercialization
Product development entails the actual design and manufacture of the product. Development commences with the manufacture of a prototype that facilitates market testing. Based upon the results of the tests, the business owner decides on whether to undertake large-scale production or not. Favorable results precede large-scale production and commercialization. The business launches its promotion campaign for the new product. The market research conducted during the conception stage influences the timing and location of the product launch.
Read more at Five Phases of the New Product Development Process