New Product Development Process Example Essay
New Product Development Process Sample Essay
The world is full of opportunities to satisfy unmet needs by creating new products and services. However, the challenge is determining the product of service that will help the organization to meet its objectives. This is because the product that a business chooses must be able to meet the overall objectives of the business, earn the company the desired profit, meet the company’s strategic positioning goals, and conform to the operational requirements of the business. This means that every good product idea is no always visible. It is therefore important that a company does thorough research of the of the new product idea before it begins to mass-produce the product so to avoid new product failure. This paper will outline the process of creating a new product
There are four main stages in the new product development process: idea generation, idea screening, idea evaluation, development of the product, and product commercialization. According to Annacchino (2003), the market is full of opportunities, ideas, concepts, and triggers of new product. Opportunities refer to identifiable business of technology gaps that a business can exploit in order to gain a competitive advantage or solve customer’s problems. An idea refers to a perception of a new product or idea that helps a business to solve the needs that exist in the market (Ahmed, 2014).
A concept refers to a description of a technology needs and the customer benefits that will result from a conceived idea. Triggers, on the other hand, refer to factors within the market that promote the creation of new products (Urban, Hauser, & Urban, 1993). One of the triggers to new product idea is advancement in technology, which creates a new opportunity to improve existing products. Another trigger is increase in competition, which forces business organizations to improve their products in order to remain relevant in the market. A company should choose only the ideas that fit into its overall objectives and strategies (Veryzer, 1998).
The second step in new product development is screening existing business ideas. The process of screening will help the business to sort out those ideas that fit with the business’ market and technological area of focus. The managers should also look at whether the idea has a potential for growth, is technologically viable, and is legal (Annacchino, 2003).
The third process in new product development is conceptualizing the product idea. One of the main activities that take place in this process is market research. Carrying out the market research helps the managers determine whether there is enough demand for then new product. The data that the business collects during the market research stage helps it in designing a projection of the costs, revenues, and profit from the new product. This will help the managers to determine whether the new product is financially viable. The business should also design a number of working prototypes for the new product. In a restaurant business, the new product prototype can be a new dish or a combination of dishes (Urban, Hauser, & Urban, 1993).
The fourth process of the new product development process is the development of product. During this process, the managers must design the final product and manufacturing the new product or service. This process also involves determining the selling price for the new price, estimating the sales volume, and conducting a market test. This process gives the business a chance to test the new product in the market to determine whether there is any real demand for it before full commercialization (Calantone & Benedetto, 1988). The test marketing helps the business to test the performance of the new product without inventing too many resources in a full-blown marketing campaign.
The fifth step in new product development is the commercialization or the launch of the new product. During this stage, the business should increase the product production and delivery so that the product is available to a larger share of the market. This will also involve observing the marketing data and production costs to determine whether the product will start earning profits as the company increases its sales volume. The company should also design a marketing promotion strategy to market the new product and create awareness in the market (Ahmed, 2014).
The process of developing a new services such as those offered in restaurants is different to that the process of developing. The differences result from the differences between products and services, namely, intangibility, heterogeneity, perishability, inseparability, and simultaneity in production and consumption of the product and service. These unique features of services make the process of designing and marketing the new service different from that of designing and marketing tangible products. For example, intangibility of services makes it difficult to share the new service idea with others in the organization. This therefore means that the service development team must make the service tangible by the use of flow charts and pictures. Secondly, the new product ties the clients to the service provider or employees of the firm. This means that designing a new service involves more work in training the personnel within the firm in order to offer the new service to the clients (Annacchino, 2003).
In conclusion, the process of designing a new product or service begins by identifying the opportunities available in the market. Next, the managers must screen the ideas, evaluation the available pool of ideas, develop the product, and commercialize the product. Once the company has commercialized the product, it must design a marketing strategy to promote the new product or service in order to increase awareness among the customers. However, when designing and marketing a product, a firm must keep in mind the unique features of a service and adjust the product development and promotion strategy to match these features.
Ahmed, R. R. (2014). New product development: strategy & implementation mechanism based on primary & secondary data research in pharmaceutical industry. International Journal of Management, IT and Engineering, 4(5), 152-176 .
Calantone, R. J., & Benedetto, C. A. (1988). An integrative model of the new product development process. Journal of Product Innovation Management, 5(3), 201-215.
Schilling, M. A., & Hill, C. W. (1998). Managing the new product development process: strategic imperatives. The Academy of Management Executive, 12(3), 67-81.
Urban, G. L., Hauser, J. R., & Urban, G. L. (1993). Design and marketing of new products. Englewood Cliffs, NJ: Prentice Hall.
Veryzer, R. W. (1998). Discontinuous innovation and the new product development process. Journal of product innovation management, 15(4), 304-321.