Perfecting a New Product Development Process

A new product development process is a cycle that every new product has to undergo from its conceptualization to its final introduction to the market.

7 Steps to Perfecting a New Product Development Process

Idea generation

Idea generation is the first step and it involves gathering of ideas to be evaluated as possible new product options. Idea generation is an ongoing process in many companies; the contributions can either come from outside or within the organ.

Different market research techniques are used to encourage ideas, which include organizing focus groups with consumers, encouraging customer suggestions and comments through website forums and toll-free telephone numbers, channel the members as well as the sales force of the company and gaining insights on the development of competitive products through secondary sources.

Brainstorming is the most popular research technique; it involves the gathering and sharing of ideas by creative thinkers and open minded individuals from outside and inside the organization. Each idea will always spark another idea, which will lead to a wide range of potential products that can be pursued.


In this step, the company personnel evaluates the ideas generated in the first step and isolates the most attractive ones. Depending on the number of ideas generated, screening can be done in different rounds with the company executives judging the feasibility of the ideas in the first round. The successive rounds utilizes advanced research techniques. As the ideas are reduced, rough estimates are made on the potential of an idea in terms of production costs, profits, sales and the response of the competitors if the idea is introduced. Acceptable ideas are moved to the next step.

Concept Development and TestingĀ 

With just a few ideas in hand, a marketer should obtain feedback from the employees, distributors as well as the potential customers. Usually, focus groups are organized where the ideas are presented to the members in form of storyboards also known as concept board presentations and not in real working form.

For example, a concept board displaying the drawings of the potential product or an advertisement featuring the product may be shown to the customers. During the focus group, the marketers seek information, which include: the dislikes and likes of the potential product, frequency of purchase, the interest level of purchasing the product and how much the customers are willing to pay for to get the product

Business Analysis

During this step of new product development process, the marketer has reduced the ideas down to either one or two options. The process is now more dependent on market research and efforts are made to analyze the feasibility of the remaining ideas. (Note; the product has not yet been introduced, it still remains only as an idea).

The main objective in this step is to get forecast of the market size (overall demand of the product), production and operational costs and the financial projections (profits and sales). In addition, the company should determine if the new product will fit it its overall strategy and mission. More effort should be directed to both the external marketing research such as the competitor analysis, secondary research, customer surveys and distributors surveys and internal research such as purchasing and production personnel.

Product and Marketing Mix DevelopmentĀ 

Ideas that make it too this step are considered for development. The company directs its development and research teams to construct a prototype of the idea. The marketers also begin to make a marketing plan for the product. After the prototype is ready, the marketers seek customer input.

Unlike the concept testing stage where the customers are only exposed to ideas, the customers gets to experience the actual product and other aspects of marketing mix such as advertising, pricing and distribution options; direct from the company or using a retail store.

Favorable customer reactions helps to solidify the decision by the marketers as well as provide valuable information such as how the product will be used and the estimated purchase rates. On the other hand, less favorable customer reactions suggests the need for a change in the marketing mix. Once the adjustments are made, the marketer may take the product again to the potential customers for testing. Besides gaining customer feedback, this step also gauges the feasibility of large scale, cost effective production of manufactured products.

Market TestingĀ 

Products that pass the above step are then tested as actual products. The marketer may skip this step and apply what was learned in concept testing to launch the new product but most companies look for more input from larger groups before launching the product.

The most common form of market testing is where marketers select a small section of the target market e.g. a city and convince distributors to place the new product on their shelves. In some cases, the distributors may be paid if they agree to place the product on their shelves for testing.

Another market testing form is where the customers are recruited to a laboratory store or a controlled environment and given shopping instructions. The level of product interest is then measured based on the response of each customers.

Finally, several high technology approaches to market testing are used. They include computer simulations and virtual reality. In computer simulations, the customers are not involved, variables are entered in a computer program and the response of the target market is calculated. In virtual reality, the customers are exposed to a computer projected environment like a store and they are asked to select a product of their choice.


If promising results are displayed during market testing, then the new product is ready to be introduced to the wider market. Some companies roll-out or introduce the new product in waves with different markets receiving the new product in different schedule. This allows the company to raise production in a controlled way

The above seven steps of a new product development process will ensures that the new product stays on top of any possible threats in the competitive market.


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.