NEW PRODUCT DEVELOPMENT PROCESS


NEW PRODUCT DEVELOPMENT PROCESS

As markets and customer preferences change companies adapt to insure success. Adaptations usually are made to capitalize on markets and expertise a firm has developed over its life.

Some adaptations are limited to updating packaging or marketing approaches or finding new uses for established products.

There are occasions where new products are needed in order to meet new customer needs or address a disruptive market innovation.

When addressing changing market needs and market disruptions it is necessary to find good ideas and then have a process to evaluate and narrow the field to the ideas most likely to succeed.

Generating new product ideas

The first step in generating good ideas that will further develop the markets and expertise that defines the firm is to clearly articulate the job customers are hiring the firm to perform.

Here it is important not to be too restrictive in the focus of the definition. It is probably better for an owner of a baseball team to define his firm’s job as sports entertainment as opposed to the more focused definition of professional baseball.

Once the job the customer has hired the company to perform is defined then it will be easier to identify new product ideas that are based on the firm’s strengths.

There are several methods to develop new product ideas that are very useful such as brainstorming, market research and product attribute modeling.

Brainstorming is widely used and involves getting key employees (and sometimes customers) together to find solutions to challenges facing the firm. The key to successful brainstorming is good note taking, allowing all ideas to be presented without negative feedback and encouraging all participants to contribute without letting a few dominate the exercise.

Market research can be the result of research surveys designed to uncover market opportunities. This research involves current customers, individuals with characteristics similar to current customers or a random selection of individuals. Examining a firms records and reviewing sales staff information on the market and the competition can also provide solid market research.

Product attribute modeling is a unique way of generating new product ideas by choosing a job the company is hired to perform and describe the absolute worst outcomes. After identifying the bad outcomes participants go back through the exercise and determine what actions could be taken to eliminate the negative outcomes. For example if a company made suitcases an exercise might be to list all of the negative attributes for suitcases (such as not fitting in overhead bins in aircraft, wheels that wobbled, instability etc.). The follow up exercise would be to create a suitcase that addressed all of the negative attributes.

The best idea generation will likely come from a program that involves all of the idea generation techniques, First, market research, then brainstorming based on the research and finally product attribute modeling.

Identifying the best ideas

After the idea generation process there are likely to be a number of ideas that are attractive. The challenge is to find a way of objectively identifying those ideas that have the most promise.

For this process it is important to assemble a committee of key employees from each part of the business. The committee should have members from sales, IT, finance, accounting, production, R&D, and engineering. This structure allows any idea to have the insights of the various parts of the organization. The committee should be led by an individual that can keep the group generating customer focused ideas and prevent efforts to kill product ideas because they don’t fit with current thinking.

When evaluating new product ideas there should be specific criteria identified that the new product must meet before moving to the next level of consideration. A list of evaluation criteria might look like the following:

1.     Profitability/market acceptability  - will the product generate a profit and a market?
2.     Accreditation requirements – Does the product meet industry and legal standards?
3.     Length of project – Can the product be introduced in an acceptable time frame?
4.     Accommodate systems – Does the new product make use of current systems or will new ones need to be developed?
5.     Fit Image – Does the product fit the image the firm wishes to project?
6.     Resources – is the new product resource and capital intensive?
7.     Gateway capacity – Does this product lead to the possibility of new products or businesses being developed?
8.     Negative Gateway capacity – Does this product have the potential of damaging other aspects of the operation?
9.     Customer acceptance – will the customer accept this product over others offered in the market?

If product ideas successfully meet all of the criteria then product ideas can be chosen to move forward to a product planning process. Those chosen as having the highest priority should best meet all of the criteria with the least organizational expense.
 Copyright GWR Research



Comments

Nicole Megan said…
Great post and extremely informative. Any kind of product development from custom product development to the simplest form, needs to be strategically implemented.
Jordan Mallory said…
This is an interesting article. When concerning Product Development, people should research chemists or companies that will provide them services toward bringing their new product to the market.
Imran mehdi said…
Brand impressions new product development process steps are a key component in an advertising campaign. Great brands are developed by great imagination.

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