New Product Development Process

The Process of new product development may vary from one firm to another but generally, the stages are as:-

Stage I: Idea generation

The process of new product development starts with the search for product ideas. To be successful ,it is important that this idea should not be casual.

Common Sources Of New Product Ideas

a) Changing customer needs and trends in consumer markets. b) Competitors c) R & D scientists d) Laboratories e) Foreign Market and Media f) Employees g) Trade channels h) Top management

Stage II: Defining Target Markets

The Second stage is that of identifying prospect or target customer groups. It is important that firms defines its target customer group in specific terms. It should also examine the cost of serving this group. These factors are important ,as they will help the firm narrow down its decision field. At this stage the firm should also identify success factors in different product ideas. For example, some ideas may require strength in the distribution network, others may require strength in technology, and yet others may demand a high brand image.

Stage III: Concept Development and Testing

Having defined the target group, the next stage is that of developing product concept and testing them. Many firms skip this stage in the belief that if they have great ideas, customers will pick them up by themselves This Stage can be better understand by the help of these three key terms:A) Product idea A possible product that the company might offer to the market. B) Product Concept An elaborated version of the idea expressed in meaningful consumer terms. C) Product Image The particular picture that the consumers acquire of an actual or potential product.

Stage IV: Feasibility Study

Once the product concept s have been tested, the next step is to conduct a market feasibility study. This study involve the following: A) Estimation of demand in the target market, at different price levels. B) Forecasting sales, based on demand estimation and competitive analysis. C) Estimating the cost of serving the market segment, taking into account cost of transportation, warehousing, margins required by the trade to market the new product, promotion expenses, and sales force cost. D) Based on the cost and anticipated sales revenue, calculating the brake-even prices and the sales volume. Once the product concept is found feasible, the firms takes concept to next stage.

Stage V: Product Development

This is the stage where the product ideas now move from the concept and design boards to R&D and Manufacturing for physical development. Both these department keep the customer feed back in mind, while developing the physical version of the product. Also, they must ensure that the product is easy and safe to use by customer. This becomes all the more important in durables and other industries products where the user may not have same level of knowledge and understanding as the R&D scientists.

Quality Function Deployment (Q.F.D)

QFD involves the customer and suggests that all product development/improvements be based on consumer feedback.QFD has been defined as a systematic way of ensuring that the development of product features, characteristics, and specification. . QFD is designed to help planners focus on characteristics of a new or existing product or service from the viewpoints of market segments, company, or technology-development needs. The technique yields graphs and matrices.

Stage VI: Test Marketing

The new product is now tested on four parameters: Trials, first purchase, adoption(repeat purchase) frequency, and the volume bought each time. On account of risks involved in test marketing, most companies avoid it. But those who do it, know that it can yield valuable information about customers, dealers, marketing mix, and strategy.

Stage VII: Commercialization

Once the test marketing is completed and the firm has favorable results, it is then ready to commercialize the product or, in other words, launch the new product. The launch plan must consider the following : a)Timing b)Place c) Strategy

THANK YOU
KUMAR SAURABH SINGH KUMAR PRAFFUL LAV MOHAN CHANDAN KUMAR