Five Phases of the New Product Development Process

New product development is a crucial process for the survival of firms, especially small businesses. The small business environment today is very dynamic and competitive. For small enterprises to withstand competition from multinationals, they have to continuously update their products to conform to current trends. The new product development process is the cycle that a new product has to undergo from conceptualization to the final introduction into the market. Five phases guide the new product development process for small businesses. Ads by Google Balanced Scorecard (BSC) KPI's, Dashboards and Strategy Maps Download Free White Paperswww.qpr.com Idea Generation This is the initial stage where a business sources for ideas regarding a new product. Some of the sources for new product ideas include the business customers, competitors, newspapers, journals, employees and suppliers. Small businesses may be limited when it comes to technical research-based idea generation techniques. This stage is crucial as it lays the foundation for all the other phases, the ideas generated shall guide the overall process of product development. Screening The generated ideas have to go through a screening process to filter out the viable ones. The business seeks opinions from workers, customers and other businesses to avoid the pursuit of costly unfeasible ideas. External industry factors affecting small businesses, such as competition, legislation and changes in technology, influences the enterprise's decision criteria. At the end of the screening process, the firm remains with only a few feasible ideas from the large pool generated. Related Reading: The Disadvantages of Market Research on New Product Development Concept Development The enterprise undertakes research to find out the potential costs, revenues and profits arising from the product. The business conducts a SWOT analysis to identify the strengths, weakness opportunities and threats existing in the market. The market strategy is set out to identify the product's target group, which facilitates segmentation of the product's market. Market segmentation is important as it enables the firm to identify its niche. The identified niche influences most of the marketing decisions. Product Development and Commercialization Product development entails the actual design and manufacture of the product. Development commences with the manufacture of a prototype that facilitates market testing. Based upon the results of the tests, the business owner decides on whether to undertake large-scale production or not. Favorable results precede large-scale production and commercialization. The business launches its promotion campaign for the new product. The market research conducted during the conception stage influences the timing and location of the product launch. References (4) Green Book: New Product development -- Stages and Methods Product Development Institute Inc: Your Roadmap For New Product Development "Principles Of Marketing"; Phillip Kotler; 2005 "Principles Of Marketing"; Frances Brassignton, Stephen Pettitt; 2006 About the Author Daphne Adams has been writing since 2003, with work published in the “Offshore Investment Magazine ". She holds a Master of Business Administration from the Rotman School of Management, as well as a Bachelor of Arts in media and journalism from Ryerson University.

Choosing a Product Development Strategy

If you have a good understanding of your market, another way to leverage your knowledge is to develop new products and services to meet this market’s needs. If you hear the term product development, you may think about brand new products, but that’s not necessarily the case. Gaining competitive advantage through a product development strategy can happen by adding more value to your existing product through features, upselling, or cross selling. The best thing about this strategy is you’ve already established yourself in your current markets and you know what your customers want. You have the distribution channels, and you know how to reach them. Consider the following questions if you’re thinking about expanding your product line or developing new products: Will your customer benefit from the added value or new feature? Are they asking for additions to the current product line? Do potential manufacturing, marketing, and distribution cost efficiencies exist from an expanded product line? Can you share current costs across the new products or services? Can your current assets, brand, marketing, and distribution be used with the new product? Do you have the skills and capabilities to develop and produce the products proposed? After you’ve given product development some consideration, and you’ve decided to proceed full steam ahead, here’s how to develop new products and services to meet your market’s needs: Add new features or services by extending your current products. For example, cell phone companies add on media packages for text messaging, additional ring tones, and Internet access. Here are a few ways to extend your current offering: Adapt (to other ideas and developments) Modify (change color, motion, sound, odor, form, shape) Magnify (more for a higher price, stronger, longer, extra value) Reduce (smaller, trial version, shorter, lighter) Substitute (other ingredients, processes, power) Combine (other options, products, ideas, assortments) Develop additional models and sizes of your current products. For example, the iPod expanded to the iPod mini and the iPod nano. Develop totally new products. In this case, you usually leverage your brand recognition. Some good examples of this development are Gerber producing baby clothes and a CPA firm expanding from tax work into financial planning.

3 PROVEN PRODUCT DEVELOPMENT STRATEGIES FOR ANY INDUSTRY

3 PROVEN PRODUCT DEVELOPMENT STRATEGIES FOR ANY INDUSTRY Posted on August 3, 2012 by Aaron Schwartz I graduated from UC Berkeley's Haas School of Business in May 2010. Friends from school included the founders of an ideation space called Napkin Labs; an amazing online test preparation company called Magoosh; and an industry-changing waste-heat-to-electricity clean tech startup called Alphabet Energy. During my time at Haas, I was able to interact with innumerable entrepreneurs and investors and co-founded a sustainability startup that had aspects of gamification and "the world of things" -- I lived the tech maven's dream! However, I decided to start a watch company. I started Modify Watches with a friend, Gary Coover, after graduation. Together, we design and manufacture interchangeable faces and straps that can be mixed and matched for the ultimate personalized watch. Our product sold in Google Store and have been customized for HP, AOL and others. We will soon be launched a line featuring the images of Major League Baseball players. Despite the low-tech nature of our watches, interacting with so many successful techies has had an immeasurable impact on our success. Here are three pieces of advice that we learned while starting up among the entrepreneurial tech genius of Silicon Valley that you can apply to any industry: Test your hypotheses. Gary and I thought that Modify was ideally targeted for young professionals. When we first started, people of all demographics would stop us on the street and say, "Cool watch, where'd you get it?" Taking note from the playbook of famed entrepreneurs and investors Steve Blank and Eric Ries – our professors at Haas – we reassessed our strategy, focusing on Customer Discovery and building a Minimum Viable Product. We talked to customers without making more assumptions and instead focused on getting out of the office and testing our hypotheses. Do not create the product of your dreams from the start — you may find that after six months of work and a $50,000 investment, your ideal product does not match a customer’s ideal product. Admit that you don't know what you don't know and find great advisers who do. Before business school, I was a management consultant, and before that, I was a history and Hispanic studies major at Columbia. I had no direct experience in the fields we operate in now. We brought on advisers who were experts in design, watch manufacturing, web development and retail, and their advice saved our team countless amounts of money, time and, most importantly, stress. When we run into walls, we always seek out advice. There is a big fallacy, in my opinion, about being closed off to the world — startups often think that someone might steal their big-ticket idea. The truth is that the deck is stacked against an entrepreneur succeeding, so it's important to become a great listener. Co-create products with your community. After building a strong community, the best tech businesses do a great job of engaging their fans to make sure that all of their product features are useful. Modify's Facebook fans told us what features to build into our watches! Not too many people cared about adding a calendar feature to the watch, but everyone asked for a watch that was water-resistant. Thanks to our community, you can now go swimming in your Modify. And before we produce any watch, we poll our community to figure out what patterns and colors they prefer. There are many more great strategies to observe from other companies of all sizes and from all industries. Look for organizations that are doing analogous work and figure out how you can take their best practices and translate them to your business. Aaron Schwartz is Founder and CEO at Modify Industries, Inc., which designs interchangeable custom watches known as Modify Watches. He loves working on startup ideas and has spent innumerable (happy) hours advising friends and former students on how to grow their ideas.