Extensive New Product Development Stages Overview

To create a new product in the company’s product line, a team of experts will go through product development steps. Starting with the idea generation stages, the team moves through a number of stages to get all the details needed to come up with a tangible product. A new product development also goes through the same stages, however since this product has never been developed before, it comes with new risks and uncertainties. This article takes you through the new product development stages and explains what your team needs to do to achieve the goals set.

Extensive New Product Development Stages Overview

Step 1: Generation

New product ideas can be obtained using SWOT analysis. Other methods that may be used to identify new product lines include market trends, competitors, focus groups, company’s R&D department, employees, salespeople, trade shows, ethnographic discovery methods or corporate spies.

When generating new ideas, consider ROI, affordability and distribution costs. Moreover, the idea should be lean, mean and scalable. Keep the NPD process nimble and apply flexible discretion over the activities to be executed. Develop multiple road map versions scaled to suit various project types and risk levels.


Step 2: Screening

In the first phase, many ideas would be generated but not all of them would be implemented. Idea screening involves eliminating unsound concepts before devoting any resources to them. Set the screening criteria based on the following factors:

  • The benefits of the product to customers in the target market
  • The size and growth projections of the target market
  • The current or expected competition for the idea
  • The market trends and industry sales the idea is based on
  • Technical feasibility of manufacturing the product
  • The profitability of the product when manufactured and retailed at the projected price

Once you have set screening criteria, stick to it so that poor ideas can be dropped in the early stages.

Step 3: Development and Testing

This phase involves developing the engineering and marketing details. Search patent databases to find out if there is a similar product that can raise intellectual property issues. Identify the target market and the decision maker when it comes to buying. Establish product features that must be incorporated into the product and still produce it in the most cost effective way.

It is important to know the potential benefits of the product and how consumers will react to it. This is also the time to calculate the production cost. Testing the Idea can involve asking some potential customers what they think about the idea

Step 4: Business Analysis

Build a metric system to track progress. This includes input metrics, like average time in all the new product development stages, and output metrics that estimate the retail price based on completion and customer feedback, sales volume based on market size, profitability, break-even point and other figures that offer valuable feedback. It is critical for the company to be in agreement with these criteria and metrics.

Even if the idea doesn’t seem viable after this analysis, keep it in the hopper as it can prove valuable for future products.

Step 5: Beta and Market Tests

Producing a physical prototype, testing the product in typical usage situations and conducting group customer interviews or introducing the product at trade shows will provide you with useful information, enabling you to make last minute adjustments where necessary.

Produce an initial product run and sell it in the target market area to establish customer acceptance. Moreover, this will help you to generate some buzz about the product.

Step 6: Technical Implementation

As long as the technical aspects can be implemented without any alterations to the post-beta stage, the product is definitely heading to the final stage.

Here, all departments will be working to ensure the idea turns into a tangible product. The production department will set up the technical processes required to manufacture the product. The finance guys will provide the money required to introduce the new product from the manufacturing stage to the distribution stage. The marketing department will come up with plans on how to distribute the product. In each department, there are several activities taking place.

Technical implementation after beta testing can be broken down into the following steps.

  • New program initiation and finalizing quality management system
  • Resource estimation and requirement publication
  • Publication of technical communications like data sheets
  • Planning engineering operations and department scheduling
  • Supplier collaboration and logistics planning
  • Resource plan publication
  • Program review and monitoring

Step 7: Commercialization

At this stage, the product is launched into the market, consumers are buying it and the technical support is tracking progress. Producing and placing advertisements and promotions during this phase would attract more and more customers, thereby increasing sales and profitability of the product. Since many consumers are reluctant to buy new products that have never been used before, you need to invest a significant percentage of your budget in advertising and marketing. Keep your distribution pipelines packed with products. Critical path analysis is also an integral part of this process.

Step 8: Product Pricing and Post Launch Review

The product can be introduced with temporary introductory pricing and then adjusted appropriately to the final prices after evaluating its impact on the market. The final pricing can be based upon value analysis (which involves making sure internal and external costs do overshadow the profits of the new product), current competition or alternative competitive technologies and projection of unit volumes and profit. Review the efficiency of the entire NPD process and make improvements where necessary. You can gauge consumer needs according to the sales and improve the delivery process.

Product development is basically an ever-evolving testing process characterized with errors, trashed designs and losses. Therefore, the team responsible should work in tight synchronicity to minimize these errors and ensure the successful launch of the product, even if it means adjusting the idea from the generation stage. Productivity can be achieved only if goals and contingencies are clearly defined in each of the new product development stages. Since both manufacturing and marketing skills are critical to the entire process, choosing a good blend of the two is recommended. This can be in the form of cross-functional teams that are responsible for all aspects of the process from idea generation to commercialization.

Mark is the Lead Author & Editor of Spectechular Blog. Mark established the Spectechular blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Product Management.