When it comes to successful new product development, productivity is key. Entrepreneurs seeking to remain relevant, efficacious and profitable must continuously conceive and develop new products that not only make it to the market, but also deliver great value to target audience members. It’s crucial for businesses to understand what consumers want, whether similar products already exist on the market and how they can create products superior to those developed by their competition. To take great product ideas and translate them into even greater final physical products, a new product development strategy (NPD strategy) is of the essence.
Steps to a new product development strategy
Your NPD strategy should be systemic, customer-driven and sales-goal oriented. Here are the basic steps:
Idea generation. Idea generation is a continuous, meticulous search for new, viable product development opportunities. Often, companies employ basic internal and external SWOT (strengths, weaknesses, opportunities and threats) analyses and examine market trends to generate hundreds, or even thousands of potential product ideas. Internal ideas can be sourced through R&D and employee brainstorming, while external ideas tend to come from studying and communicating with distributors, suppliers, customers and competitors.
Idea screening. This second step of new product development involves screening all newly-generated ideas to sift the good ones from the not-so-good ones – and discarding the latter.
Concept development. All ideas passing the screening stage are developed into concepts, which will subsequently be tested for real-world viability.
Concept testing. Once concepts have been developed, each one is tested with sample target consumer groups. The feedback these focus groups provide is used to further develop the concept to better meet customers’ needs and demands.
Business strategy analysis & development. Once a promising concept has been selected, it is time to put together an initial business and marketing strategy. This requires an in-depth analysis of the methods your product management, marketing and sales teams will ultimately use to create and sell the product to your target audience.
Product development. A physical prototype or limited production model is built and branding (and other strategies) are tested and applied.
Test marketing. Placing an actual finished product for sale in one or multiple sample market settings and observing how well (or how poorly) it sells under the pre-determined marketing plan.
Commercialization. Our product and all associated marketing strategies are ready for launch.
Congratulations! You made it to the commercialization stage of new product development. Your product and all associated marketing strategies are ready for launch. Now it’s time to implement a full marketing plan and production process.
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