New product development

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New product development
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New product development (NPD) defines a complete process of bringing on a new product or service to the market[1]. NPD is basically presented as the transformation of market possibility into a product available to sale, what means that the main aspect of NPD is product design. Lunching stuff requires to involve almost every department in the company[2]:

Steps of new product development

In order to introduce a new product to a customer it is necessary to accomplish certain actions to minimalize the risk of making the loss. Most frequently stands out eight steps[3][4]:

  • Idea generation The process of NPD starts here. Idea creation refers to the consistent searches for the new product or service ideas.
  • Screening The Idea Filtering the concepts to choose the greatest ones and dropped poor ones. That point is aimed at reducing the number of ideas we come up with.
  • Concept Development and Testing Not rejected ideas must be developed into a prototype. At this stage, it is ought to survey the group of target customers to hear their feedback about the product.
  • Business Analysis During that point the company does the researches affecting sales forecasts, profits, and cost. Afterward, they estimate minimal and maximal sales.
  • Product development At this stage it is decided to bring the good to the market. It starts by taking concrete steps to produce and distribute the new product in every involved area.
  • Test marketing Introducing the product to the small range for research acceptance of customers, will they like it, will they buy it in the future. Received feedback will improve the venture, show whether some changes are needed.
  • Commercialization The product is introduced to the target market. All the data obtained during the previous steps of this process are used to produce, market and distribute the final product to and through the adequate channels.
  • Introduction the new product This stage involves the final launch. It is the beginning of product life cycle.

Footnotes

  1. Loch C.H., Kavadias S. (2008)
  2. Takeuchi H., Nonaka (1986)
  3. Hauser J.R., MIT, Dahan E. (2007)
  4. Loch C.H., Kavadias S. (2008)

References

Author: Adrianna Lisak