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.

Examples of New product development

Completely new product: Developing a totally new product from scratch involves rigorous research, design and engineering from the conceptual stage through to the end product. An example of this is the development of the iPhone, which Apple Inc. released in 2007. Apple’s research and development teams researched the market, developed a design, engineered the hardware and software, and tested the product before it was released.

  • Product improvement: Product improvement involves making incremental changes to an existing product over time. An example of this is the development of the Samsung Galaxy S series of smartphones. Samsung has released several models of the Galaxy S over the years, each one an improvement over the previous version. The latest model, the Galaxy S20, includes significant improvements over its predecessors, such as a larger display and more powerful processor.
  • Product line extension: Product line extension involves introducing a new product that is similar to an existing product, but with a different feature or design. An example of this is the development of the Nike React shoe. The React shoe is a modern update to the Nike Air Max shoe, with a new foam sole that offers superior cushioning and comfort.
  • Product repositioning: Product repositioning involves changing the way a product is perceived by customers. An example of this is the development of the Kia Soul. Kia repositioned the Soul as a fun, stylish car for young people, rather than a plain, utilitarian vehicle. This repositioning was successful, and the Soul became a popular choice among millennials.
  • Product redefinition: Product redefinition involves changing the purpose of a product. An example of this is the development of the Amazon Echo. Originally designed as a voice-activated speaker, Amazon repurposed Echo as a home automation device, allowing users to control their lights, thermostats, and other devices with voice commands.

Advantages of New product development

New product development (NPD) is a comprehensive process of introducing new products or services to the market. This process can be beneficial for organizations in terms of profitability and customer satisfaction. Below are some of the advantages of NPD:

  • Improved customer satisfaction: By introducing new products and services, organizations can meet the changing needs of their customers. This can help organizations to increase customer loyalty and satisfaction.
  • Increased profits: Developing new products can help organizations to increase their profit margins by providing them with a competitive edge. New products can also open up new markets and create new revenue streams.
  • Enhances innovation: New product development encourages organizations to be creative and innovative. This helps to keep them ahead of the competition and encourages them to explore new concepts and ideas.
  • Improved brand awareness: Introducing new products can help organizations to increase their brand awareness and recognition. This can help to attract new customers and increase sales.

Limitations of New product development

New product development (NPD) is the complete process of bringing a new product or service to the market. However, there are several limitations to this process:

  • Time: NPD requires a large amount of time to complete, from the initial concept and design to the development of the product, testing and marketing. It can take months or even years for a new product to reach the market.
  • Cost: NPD also requires a significant amount of financial resources to complete, from research and development to legal fees to marketing and advertising.
  • Risk: There is also the risk that the new product may not be successful in the market due to various reasons such as lack of customer demand or competition.
  • Complexity: NPD is a complex process that requires coordination between different departments and stakeholders. It involves various activities such as market and product research, product design and development, testing, and production.
  • Focus: NPD can take away focus and resources from existing products and services.

Other approaches related to New product development

New product development (NPD) is a complete process of bringing a new product or service to the market. Other approaches related to NPD include:

In summary, new product development involves a complete process of researching, designing, innovating and launching a new product or service to the market. It is important to understand customer needs and develop a competitive advantage to be successful in the market.


  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)

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Author: Adrianna Lisak