new product development essay

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The New Product Development Process

The new product development is a compound process that consists of diverse stages directed to collecting and analyzing the data related to the market and developing a profitable offer based on the research. Each product development process includes such stages as idea generation, idea screening, feature specification, development, testing, and commercialization. The ideas for a new product can come from anyone, for example, companies’ customers, employees, managers, and their families. Any person can come up with a great idea based on the evidence that proves the target audience’s struggles, as well as anything, can play a role of a trigger for finding the solution to the problem. However, corporations still tend to conduct various brainstormings, meetings, and research centers to generate new ideas.

The idea screening stage is one of the most significant stages as the company estimates the idea based on various criteria such as ease of implementation, profitability, or goodness. Companies need to evaluate all ideas to discredit the bad ones and prevent the loss of investment and profit. At the feature specification stage, the important components of the future good are chosen and estimated. This stage involves the examination of the consumer, the creation of the target audience portrait, and the division of potential buyers into target groups based on specific criteria. These strategies help companies understand which features are the most important for consumers, what additional components can be added to the product, and what is the optimal price for each target group.

The development is one of the most volumetric stages of this process. It includes planning of the production process, creation of prototypes, calculation of all needed variables and parameters, the final offering is suggested, and all good’s specifications are carefully analyzed and documented. This stage provides the physical evidence of how the product looks or what costs it demands. Therefore, the company can find more effective ways of production for this good before its actual launch on the market. Testing follows the development stage and aims to evaluate the practical utility of the good. During the testing process, a group of consumers utilizes the product in their daily routine and gives feedback on the pros and cons of the commodity. At this stage, some minor mistakes can be corrected, or the good can be completely changed based on the experiment’s results. However, further product development can even be stopped if the commodity is considered dangerous or deleterious. For example, this situation is common in drug development; new medicine is usually tested on animals such as rats; therefore, in case some side effects occur, the drug development is started from scratch. However, if no great problems appear at the testing stage, the final product is inculcated in the market, and its performance is estimated.

In new product creation, such notions as invention and innovation are important. However, there is some difference between those two marketing ideas, although both are related to the new product development process. An invention can be defined as the creation of a new product that has no analogs. However, innovation adds value to the invention by improving it. According to Marion (2020), innovation can be defined as the introduction of a new product, service, or method (p.195). For example, Steve Jobs did not create the smartphone, but he created a new model of it. Therefore, it can be called an innovation.

While studying the Unit, I got interested in the product life cycle of various goods. Although I already knew some information on that topic, it was new to me that some products of almost the same qualities can pass through the stages of PLC during different periods. It is seen in the Pepsi example provided in the book. Therefore, I am curious whether there is a way to predict the PLC of a product.

Marion, T. J., & Fixson, S. K. (2020). The transformation of the innovation process: how digital tools are changing work, collaboration, and the organizations in new product development. Journal of Product Innovation Management, 38 (1), 192-215. Web.

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Product development process: The 6 stages (with examples)

The product development process is a six-stage plan that involves taking a product from initial concept to final market launch. This process helps break down tasks and organize cross-departmental collaboration. Find out how to implement a process of your own.

Product development is both an exciting and difficult endeavor. From initial ideation to research and prototyping, no two product launches are the same. However, there’s a general process that can help you get started with the product development process. 

The product development process describes the six steps needed to take a product from initial concept to final market launch. This includes identifying a market need, researching the competition, ideating a solution, developing a product roadmap, and building a minimum viable product (MVP).

The product development process has evolved in recent years and is now commonly used by dividing each step into six separate phases. This helps better organize the process and break individual deliverables into smaller tasks.  

What is product development?

Is product development the same as product management.

Though they sound almost identical, there's an important difference between product development and product management. Product development describes the process of building a product, where product management is the overseeing of that work. It's a slight difference, but an important distinction. A product manager, who often oversees a team that is in the product development process, will lead product management.

The 6 stages of product development

Not only does the product development process help simplify a launch, but it also encourages cross-team collaboration with teamwork and communication at the forefront of the process. 

Let’s dive into the product life cycle and define the six product phases. All of which can help you successfully launch your next product. 

1. Idea generation (Ideation)

The initial stage of the product development process begins by generating new product ideas. This is the product innovation stage, where you brainstorm product concepts based on customer needs, concept testing, and market research. 

It’s a good idea to consider the following factors when initiating a new product concept:

Target market: Your target market is the consumer profile you’re building your product for. These are your potential customers. This is important to identify in the beginning so you can build your product concept around your target market from the start.  

Existing products: When you have a new product concept, it’s a good idea to evaluate your existing product portfolio. Are there existing products that solve a similar problem? Or does a competitor offer a product that doesn’t allow for market share? And if yes, is your new concept different enough to be viable? Answering these questions can ensure the success of your new concept.

Functionality: While you don’t need a detailed report of the product functionality just yet, you should have a general idea of what functions it will serve. Consider the look and feel of your product and why someone would be interested in purchasing it.

SWOT analysis : Analyzing your product strengths, weaknesses, opportunities, and threats early in the process can help you build the best version of your new concept. This will ensure your product is different from competitors and solves a market gap. 

SCAMPER method : To refine your idea, use brainstorming methods like SCAMPER , which involves substituting, combining, adapting, modifying, putting to another use, eliminating, or rearranging your product concept.   

To validate a product concept, consider documenting ideas in the form of a business case . This will allow all team members to have a clear understanding of the initial product features and the objectives of the new product launch. 

2. Product definition

Once you’ve completed the business case and discussed your target market and product functionality, it’s time to define the product. This is also referred to as scoping or concept development, and focuses on refining the product strategy. 

During this stage, it’s important to define specifics including:

Business analysis: A business analysis consists of mapping out distribution strategy, ecommerce strategy, and a more in-depth competitor analysis. The purpose of this step is to begin building a clearly defined product roadmap.

Value proposition: The value proposition is what problem the product is solving. Consider how it differs from other products in the market. This value can be useful for market research and for developing your marketing strategy.

Success metrics: It’s essential to clarify success metrics early so you can evaluate and measure success once the product is launched. Are there key metrics you want to look out for? These could be basic KPIs like average order value, or something more specific like custom set goals relevant to your organization. 

Marketing strategy: Once you’ve identified your value proposition and success metrics, begin brainstorming a marketing strategy that fits your needs. Consider which channels you want to promote your product on—such as social media or a blog post. While this strategy may need to be revised depending on the finished product, it’s a good idea to think about this when defining your product to begin planning ahead of time. 

Once these ideas have been defined, it’s time to begin building your minimum viable product (MVP) with initial prototyping.

3. Prototyping

During the prototyping stage, your team will intensively research and document the product by creating a more detailed business plan and constructing the product.

These early-stage prototypes might be as simple as a drawing or a more complex computer render of the initial design. These prototypes help you identify areas of risk before you create the product.

During the prototyping phase, you will work on specifics like:

Feasibility analysis: The next step in the process is to evaluate your product strategy based on feasibility. Determine if the workload and estimated timeline are possible to achieve. If not, adjust your dates accordingly and request help from additional stakeholders.

Market risk research: It’s important to analyze any potential risks associated with the production of your product before it’s physically created. This will prevent the product launch from being derailed later on. It will also ensure you communicate risks to the team by documenting them in a risk register . 

Development strategy: Next, you can begin working through your development plan. In other words, know how you’ll be assigning tasks and the timeline of these tasks. One way you can plan tasks and estimate timeline is by using the critical path method . 

MVP: The final outcome of the prototyping stage is a minimum viable product. Think of your MVP as a product that has the features necessary to go to launch with and nothing above what’s necessary for it to function. For example, an MVP bike would include a frame, wheels, and a seat, but wouldn’t contain a basket or bell. Creating an MVP can help your team execute the product launch quicker than building all the desired features, which can drag launch timelines out. Desired features can be added down the road when bandwidth is available.

Now it’s time to begin designing the product for market launch. 

4. Initial design

During the initial design phase, project stakeholders work together to produce a mockup of the product based on the MVP prototype. The design should be created with the target audience in mind and complement the key functions of your product. 

A successful product design may take several iterations to get just right, and may involve communicating with distributors in order to source necessary materials. 

To produce the initial design, you will: 

Source materials: Sourcing materials plays an important role in designing the initial mockup. This may entail working with various vendors and ordering materials or creating your own. Since materials can come from various places, you should document material use in a shared space to reference later if needed.  

Connect with stakeholders: It’s important to keep tight communication during the design phase to verify your initial design is on the right track. Share weekly or daily progress reports to share updates and get approvals as needed. 

Receive initial feedback: When the design is complete, ask senior management and project stakeholders for initial feedback. You can then revise the product design as needed until the final design is ready to be developed and implemented. 

Once the design is approved and ready to be handed off, move onto the validation phase for final testing before launching the product. 

5. Validation and testing

To go live with a new product, you first need to validate and test it. This ensures that every part of the product—from development to marketing—is working effectively before it’s released to the public.

To ensure the quality of your product, complete the following:

Concept development and testing: You may have successfully designed your prototype, but you’ll still need to work through any issues that arise while developing the concept. This could involve software development or the physical production of the initial prototype. Test functionality by enlisting the help of team members and beta testers to quality assure the development. 

Front-end testing: During this stage, test the front-end functionality for risks with development code or consumer-facing errors. This includes checking the ecommerce functionality and ensuring it’s stable for launch.

Test marketing: Before you begin producing your final product, test your marketing plan for functionality and errors. This is also a time to ensure that all campaigns are set up correctly and ready to launch. 

Once your initial testing is complete, you’re ready to begin producing the final product concept and launch it to your customer base. 

6. Commercialization

Now it’s time to commercialize your concept, which involves launching your product and implementing it on your website. 

By now, you’ve finalized the design and quality tested your development and marketing strategy. You should feel confident in your final iteration and be ready to produce your final product. 

In this stage you should be working on:

Product development: This is the physical creation of your product that will be released to your customers. This may require production or additional development for software concepts. Give your team the final prototype and MVP iterations to produce the product to the correct specifications. 

Ecommerce implementation: Once the product has been developed and you’re ready to launch, your development team will transition your ecommerce materials to a live state. This may require additional testing to ensure your live product is functioning as it was intended during the previous front-end testing phase. 

Your final product is now launched. All that’s left is to measure success with the initial success metrics you landed on. 

Product development process examples

Now that you understand the six stages of the product life cycle, let’s look at real world examples of some of the most successful product development strategies of iconic startups to inspire your own.

Example 1: How Figma expanded their product features

Originally started in 2012, Figma was the first professional-grade UI design tool built entirely in the browser. Today, Figma has grown into the leading competitor for design web applications.

Their mission is to make design accessible to more people and help them bring their creativity to life. They’ve shown this by continuously adding new product features—like multiple flow capabilities, a brainstorming timer, and an interactive whiteboard—coordinating successful software releases, and building trust through transparency.

Read our case study to learn how Figma uses Asana to manage development backlogs. 

Example 2: How Uber solved a market gap

While today we think of Uber as the biggest ride-sharing service, that wasn’t always the case. They too started with a compelling product strategy that made them into the innovative company they are today. 

Uber’s strategy began by solving a gap in the existing taxi industry: creating an easier ride-hailing process with simplified payment processing. But they didn’t stop there: they continued to innovate their product portfolio by developing ride tiers ranging from luxury to budget-friendly. 

While each situation varies slightly, with the right product strategy, you too can create an innovative portfolio. 

Who is part of the product development team?

There are many stakeholders and various teams that assist with the product development process. The main leader is the product manager, who oversees all product tasks related to ideation, research, development, and product launch. 

Additional important stakeholders include:

Product management: A product manager oversees all areas of the product life cycle and works to bridge communication gaps between various internal and external teams. The product manager works to initiate new product launches and initiates product ideation and market research.

Project management: A project manager may be involved in the product development process to assist with cross-departmental communication. They might also assist with task delegation and goal tracking.

Design: The design team helps during the prototyping and designing phase to support the visual product concept. It’s important to connect product designs with brand guidelines and UX best practices. 

Development: The development team helps with the implementation of the product on your website. Most commonly, a team of developers will work together to build the new product offering depending on the complexity of the concept.

Marketing: The marketing team will assist with developing the marketing strategy and testing it before the product goes live. They will also measure the success of the marketing initiatives.

Sales: The product manager works with the sales team to come up with an effective strategy and report on success metrics after the product has been implemented. 

Senior management: Senior stakeholders may need to give final approval before the product can go to launch. 

In addition to these important roles, other teams that may be involved are finance, engineering, and any other related stakeholders. All of which can play a role in the process depending on the complexity of the concept. 

The process that simplifies product development

The right product development process can help you streamline each step with organized tasks and team collaboration. The six stages outlined above will get your team through all steps of the process, from initial idea screening to the development phase. 

But you might need help along the way. Coordinate tasks and organize your product development process with Asana for product management . Asana can help get your products to market faster by tracking workload and simplifying planning.

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New product development (NPD)

New Product Development is a comprehensive set of multidisciplinary processes that turn an opportunity into a product that will satisfy a customer.

Contents covered in this article

Introduction to New Product Development (NPD)

What is new product development.

New Product Development (NPD) is a comprehensive multi-disciplinary process that transforms a market opportunity into a marketable new product to satisfy customer requirements.

According to Wheelwright and Clark (1992), NPD is defined as effective activity organisation and management to bring products to market with low development costs and short development times.

PDMA defines NPD as,

“A disciplined and defined set of tasks and steps that describe the normal means by which a company repetitively converts embryonic ideas into saleable products or services.”

PDMA handbook 2nd edition

It’s sometimes called New Product Introduction (NPI) or new product planning and development. It applies to tangible products such as phones, coffee makers, TVs, etc., and intangible products like mobile phone apps and software programs.

Importance of New Product Development

Why is New Product Development necessary?

NPD is the driving force of companies and vital for their organic growth. Insatiable consumer appetite, worldwide solid competition, and changing consumer behaviour and technology force companies to invest in new products to succeed or for their survival.

The importance of introducing new products can be summarised in these “Seven reasons why new product development is necessary.”

Changing consumer Increasing competition Technological advancement New opportunities (growth and development) Risk diversification To increase company & brand reputation To utilise excess capacity

New Product Development Strategy

A New Product Development (NPD) strategy is a plan or framework that guides creating and delivering a new product to the market. It involves steps and decisions to identify opportunities, conceptualise, design, develop, and launch a product that meets customer needs and aligns with business goals.

Importance of New Product Development Strategy

Why do you need a thorough NPD strategy? According to the McKinsey Global Institute data, consider these 4 statistical facts about how products are fair.

Only 4 in 7 product ideas enter the product development stage Only 3 products get launched from 14 product ideas Only 1 in 7 product ideas will yield a successful product Launched products have a failure rate of 25% to 45%

Research shows that some NPD failures can be attributed to the lack of a structured NPD process. According to Wheelwright and Clark (1992), companies that approach NPD in a structured manner have more success than those with an ad-hoc approach.

By following a well-planned set of procedures & milestones, companies can avoid some of the common pitfalls that lead to the failure of NPD, such as;

Overestimate market size Customer requirement misinterpretation Launched at the wrong time Poor product design Target customer’s requirement mismatch Price too high Poor advertising and marketing High product development cost due to overrun & resource overuse Competition risks and threats

Structured approach vs. ad-hoc methods

Typical NPD processes companies follow can be divided into Structured approach vs. ad-hoc methods.

When developing new products, structured approaches and ad hoc methods have merits and drawbacks.

Structured Approach

Methodical Process – A structured approach follows a systematic, step-by-step process. It typically involves stages like idea generation, feasibility analysis, design, development, testing, and launch.

Risk Management – It often incorporates risk assessment and mitigation strategies at each stage, reducing the chances of significant setbacks or failures.

Efficiency – Structured methods can enhance efficiency by providing clear guidelines, roles, and responsibilities. They also make it easier to track progress and make necessary adjustments.

However, structured approaches can sometimes be rigid, potentially stifling creativity or innovation. They might also require more time and resources upfront. Typically

Ad-Hoc Methods

Flexibility and Creativity – Ad-hoc methods allow for more flexibility and spontaneity. They can adapt highly to changing circumstances, enabling quick pivots or adjustments based on emerging opportunities or feedback.

Cost and Time – They may save time and resources initially by skipping formalities and allowing for rapid prototyping or testing. This agility can sometimes lead to faster product iterations.

However, ad-hoc approaches need consistency, increasing the risk of overlooking critical steps or making hasty decisions. They also result in inefficiencies due to the absence of a defined structure.

The ideal approach often involves balancing structured and ad hoc methods. Incorporating structured steps ensures essential considerations are addressed while allowing room for flexibility to encourage innovation and adaptation.

For instance, using a structured approach for the core development process while allowing for creative brainstorming sessions or agile methods during certain stages can combine the benefits of both approaches.

Models and Frameworks in NPD

New product development models overview.

A well-tailored NPD strategy will enable companies to organise their product planning, understand their customers, accurately plan, and efficiently use their resources for NPD. An NPD strategy will also help to avoid the pitfalls mentioned above and increase the chance of product success.

New product development methods

Comparison of different NPD frameworks

There are various models proposed by authors before. Still, it starts with an idea to build a product that meets the customer’s technical specifications. It ends with a product launch or introduction to the market. The number of stages and phases and their description varies from model to model depending on the following.

Product type (tangible/intangible) The degree of innovation (redesign vs routine design). Product Complexity Production & manufacturing process – manual or automated Supply chain Technology involved. Resource availability (workforce) Labour availability? Time and budget

New product development stages

As the table above shows, the product development stages can vary, but they often can be grouped into these 5 key phases, which include 8 critical activities;

Overview of the NPD process

Fuzzy front end Opportunity identification & analysis Idea generation & screening Concept & technology development Business case building Marketing strategy development and marketing mix Business analysis Product design Product design Product Implementation Test marketing Commercialisation/Fuzzy back end Product launch

Five key New product development stages

Fuzzy front end.

As the name suggests, the fuzzy front end is the messy stage of the new product development where opportunities are identified & analysed, and ideas are generated & screened before a viable concept is developed. This set of activities paves the way for a formal technical specification of the final product.

Business case building

This stage analyses the market before product design and development begin. Marketing strategy development defines the target market, sales, and market share. The company must also determine the best market mix ( 4Ps—product, place, price, and promotion). Finally, the company evaluates the proposed product’s attractiveness against its long-term objectives.

Product design

The product design stage is the detailed phase where the technical requirements are turned into an engineering product design. In engineering, prototyping and product design are at the heart of any product development and follow the following four phases.

Product definition and product planning Conceptual design Embodiment design Detail design

Product Implementation

Market testing – The stage at which the product is introduced using the proposed marketing program. It lets the company test the product and its marketing program—targeting and positioning strategy, advertising, distribution, pricing, branding and packaging, and budget levels.

Commercialisation

After the product implementation phases, management will have gathered all the relevant information to make the final decision about going commercialisation. At this stage, companies use the knowledge gained from the product implementation stage and their marketing mix to launch the product, where product life cycle management starts.

Factors influencing development stages

In New Product Development (NPD) methods, several factors influence each stage of the development process. These factors can shape decision-making, resource allocation, and overall success. Here are some key factors that have an impact:

Market Trends and Consumer Needs – Understanding market trends and evolving consumer needs is crucial. These insights guide idea generation and concept development and ensure the product meets customer expectations. Technological Advancements —Technology influences product design, development, and production methods. Staying abreast of new technologies helps create innovative products, improve efficiency, and enhance competitiveness. Regulatory and Compliance Requirements – Legal and regulatory standards impact product development, especially in healthcare, food, and automotive industries. Compliance with safety, environmental, and industry-specific regulations is essential. Competitive Landscape —Analysing competitors’ products and strategies is vital. It helps identify market gaps, differentiate products, and create unique value propositions. Resource Availability and Constraints – The availability of financial resources, skilled personnel, technology, and infrastructure affects the speed and scope of product development. Constraints in any of these areas can influence decision-making and the development timeline. Risk Management and Feasibility – Assessing risks associated with new product development is crucial. Factors like technical feasibility, market acceptance, manufacturing challenges, and financial risks need careful consideration at each stage. Cross-functional Collaboration – Collaboration between departments like R&D, marketing, production, and sales is essential. Effective communication and collaboration streamline the NPD process and ensure a holistic approach. Customer Feedback and Testing —Gathering feedback from potential customers through surveys, focus groups, and prototypes influences product refinement. Testing helps validate ideas and ensure that the product meets customer expectations. Time-to-Market Considerations – Speed is often critical in launching a successful product. External factors like seasonal demands or technological obsolescence might necessitate quicker development and launch. Sustainability and Environmental Factors – Considerations about sustainability, environmental impact, and societal values are increasingly important. Consumers often favour products that align with sustainability goals and ethical standards.

The interplay of these factors differs across industries and products, requiring flexibility and adaptability in the NPD process. Companies that effectively navigate these influences often produce products that are not only innovative but also aligned with market demands and regulations.

Current Trends and Future Directions in NPD

Impact of technology on npd.

Market Trends and Consumer Needs – Understanding market trends and evolving consumer needs is crucial. These insights guide idea generation and concept development and ensure the product meets customer expectations.

Technological Advancements —Technology influences product design, development, and production methods. Staying abreast of new technologies helps create innovative products, improve efficiency, and enhance competitiveness.

Regulatory and Compliance Requirements – Legal and regulatory standards impact product development, especially in healthcare, food, and automotive industries. Compliance with safety, environmental, and industry-specific regulations is essential.

Competitive Landscape —Analyzing competitors’ products and strategies is vital. It helps identify market gaps, differentiate products, and create unique value propositions.

Resource Availability and Constraints – The availability of financial resources, skilled personnel, technology, and infrastructure affects the speed and scope of product development. Constraints in any of these areas can influence decision-making and the development timeline.

Risk Management and Feasibility – Assessing risks associated with new product development is crucial. Factors like technical feasibility, market acceptance, manufacturing challenges, and financial risks need careful consideration at each stage.

Cross-functional Collaboration – Collaboration between departments like R&D, marketing, production, and sales is essential. Effective communication and collaboration streamline the NPD process and ensure a holistic approach.

Customer Feedback and Testing —Gathering feedback from potential customers through surveys, focus groups, and prototypes influences product refinement. Testing helps validate ideas and ensure that the product meets customer expectations.

Time-to-Market Considerations – Speed is often critical in launching a successful product. External factors like seasonal demands or technological obsolescence might necessitate quicker development and launch.

Sustainability and Environmental Factors – Considerations about sustainability, environmental impact, and societal values are increasingly important. Consumers often favour products that align with sustainability goals and ethical standards.

Trends shaping the future of product development

The future of product development is shaped by several transformative trends influencing how products are conceptualised, designed, manufactured, and brought to market. Some of these trends include:

Advanced Technologies Integration

AI and Machine Learning – These technologies assist in data analysis, trend prediction, and personalised product development based on consumer behaviour and preferences. Internet of Things (IoT) – Connecting devices and products enables data collection, remote monitoring, and the creation of intelligent, interconnected ecosystems. Augmented Reality (AR) and Virtual Reality (VR) – These technologies enhance product design, testing, and customer experiences by providing immersive and interactive interfaces.

Sustainable and Eco-friendly Products

Increasing consumer awareness and environmental concerns are driving the demand for sustainable products. This trend involves using eco-friendly materials, reducing waste, and creating products with a smaller ecological footprint.

Mass Customization

Consumers seek personalised products. Companies are leveraging technology to offer customisable options at scale, allowing customers to tailor products to their preferences.

Collaborative and Agile Development:

• Cross-functional collaboration and agile methodologies are becoming more prevalent. Companies are breaking silos, enabling faster iterations, and incorporating feedback throughout the development process.

Additive Manufacturing (3D Printing):

• 3D printing revolutionises prototyping and manufacturing by enabling cost-effective, on-demand production of complex parts and customised products.

Remote Work and Digital Collaboration:

• Remote work trends impact product development teams, necessitating digital collaboration tools and processes to facilitate seamless communication and cooperation among dispersed teams.

Emphasis on User Experience (UX) and Design Thinking:

• Design thinking methodologies prioritise user-centric approaches, focusing on understanding and addressing user needs and pain points throughout the product development lifecycle.

Predictive Analytics, Product Analytics, and Data-Driven Decision-Making:

• Leveraging big data analytics and product analytics for comprehensive market insights, trend analysis, and predictive modelling to make informed decisions throughout the product development process.

Subscription-Based and Service-Oriented Models:

• Shifts towards service-oriented models such as Spotify, Netflix, CCTV camera cloud storage subscription-based products, and product-as-a-service offerings are gaining traction, creating ongoing customer relationships beyond one-time transactions.

Supply Chain Resilience and Localization

• The pandemic highlighted vulnerabilities in global supply chains. There’s a move towards building more resilient supply chains, focusing on localisation, diversification, and agility. 

Embracing these trends allows companies to stay competitive, respond to evolving consumer demands, reduce time-to-market, and create products that align with changing societal, environmental, and technological landscapes.

5 Challenges of new product development

There is more than one reason why companies should create new products . Developing quality new engineering products consistently and having a stronghold in your niche market is one of the most powerful but difficult activities in business (Clark and Wheelwright 1995). 75% of new product developments fail, which shows how challenging it can be for the new engineering product design team to succeed.

Product designers face various challenges during the development cycle, however, not all of them are technical. Some of the challenges are due to external factors such as cost, economic changes, competitor influence, company policy etc.

Let’s look into some of the key general non-technical challenges that product design engineers face in detail.

As an engineering product designer, one of the hardest things is to justify the decisions and manage trade-offs during the embodiment design stage.

For example, a car can be made to look like the BMW concept car and also made lighter, faster, more efficient etc, but all these would probably increase manufacturing cost and the car will cost more than the targeted segment of the market can afford. Hence, to keep the unit selling cost down, compromises have to be made to the original product requirement specification without sacrificing some of their original unique selling points.  The challenge here is to identify, understand and manage such trade-offs in a way to increase the product’s success.

Product economics

Product economics is all about profitably developing and selling an engineering product to solve a customer’s problem.

Every product designer who had to make a trade-off decision would know that the decision was made most probably due to economics. The 8 stages of new product development require a large investment and a lot more effort than you think at the start. To get a reasonable return on investment, the end product must be both appealing to customers and relatively inexpensive to produce.

As the cost breakdown shows in image above on average an engineering product design accounts for only 5% of the total NPD cost but its influence on the rest is 70%. Even a simple design for assembly (DFA) change of using snap-fits instead of self-tapping screws can save thousands of pounds. No matter how simple the product is, there will be hundreds of such decisions that would have an impact on the final selling price.

Thus, the challenge is to make the correct decisions during the product design stage so that subsequent costs (material, labour & overheads) can be kept to a minimum.

Global competition

Due to globalisation and international marketplaces such as Amazon , eBay , Alibaba , etc., the global market can be accessed from anywhere in the world. Global competition is one of the biggest challenges companies face during product development due to this large and diverse marketplace.

A company could start developing an engineering product unaware that an overseas competitor is already halfway through theirs.

Here the challenge is to design and develop a product to launch at the right place and time for the right price before your competitors.

Time pressure

Most technology-driven engineering product design companies compete on NPD cycle time , so they can launch the product first in the market. This was highlighted by Stalk’s (1988) term “time-based competition”.

Due to this global competition, the entire new product development from concept to market launch is often carried out to a very tight delivery schedule.

Without the time pressure, product design technical challenges can be managed, but due to the tight schedule technical issues have to be resolved and decisions made quickly.

Hence the challenge is to make the managerial decisions to avoid project overrun without compromising the design specification within the specified timeframe.

Dynamic environment

Although the product design and development duration depend on the product type and the industry, in general, it’s safe to say that it takes on average 9 – 12 months. It would take longer if the products need approval for FCC, CE etc.

In this period, technologies advance, customer needs change and evolve, competitors introduce similar products and the economic environment shifts.

Hence, the challenge is to make crucial decisions promptly and invest money in a constantly changing environment to succeed.

New Product Development Essays

Phases in new product development, new product development management, analysis paper: dell inc., new product and services development, popular essay topics.

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Essay Samples on New Product Development

The creation and commercialisation of chewing gum.

The idea of chewing gum was evident long before the creation and commercialization of what we know today as chewing gum. Within groups such as Mayan Indians, early American Indians, and the ancient Egyptians, it was popular to chew tree resins, sweet grasses, waxes, and...

• Chewing Gum
• New Product Development

Changes In Manufacturing Of Electronic Products Are Better Than Over The Past 50 Years

A significant amount of the technology used by people today stems from 50 years ago. In 1968 Robort Noyce and Gordon Moore launched intel. This has evolved to become the largest semiconductor companies in the world, about twice as big as closest competitor, Samsung Electronics...

• Electronics

New Product Development Strategy Analysis Of Chocoladefabriken Lindt & Sprüngli Ag

Introduction The company which is analysed under this report is the esteemed Chocoladefabriken Lindt & Sprüngli AG most commonly known as Lindt which is a company that specialises in production of confectionaries. The aim of this report is to find a possible strategy for a...

• Business Plan

New Product Development: Ocean Bracelets for Old Gen Zers

Old Gen Zers (15-20-year-old) are the ones who marketers are continuously trying to attract. Gen Z is known as the most social and influential generation ever. If for example, Company A. Saxton wants to develop a new product for the 15-20-year-old market, a segment it...

• Marketing Management
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The Practices of New Product Development

No organization will succeed at new product development over the long haul without a systematic approach to project selection and resource allocation. It’s all about making informed go-kill decisions, again and again. Here are 10 best practices that can help — from data integrity and...

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The Notion Of A Brand & The Importance Of Its Creating

This statements when brought to its barest form acknowledges the mutualism of both concepts yet brings to the fore front the major distinction between them. The definition of “brand” has evolved over time and yet there seems to not be any universally accepted meaning for...

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Chapters Summary Of "The Product Book: How To Become A Great Product Manager"

Keywords: Product management, Career development, Professional skills, Leadership, Marketing strategies, Customer insights, Agile methodology, Product lifecycle In the chapter one of The Product Book, it introduced the main duties of product manager. I realized that there was not only one type of the product manager...

• Leadership and Management

Best topics on New Product Development

1. The Creation and Commercialisation of Chewing Gum

2. Changes In Manufacturing Of Electronic Products Are Better Than Over The Past 50 Years

3. New Product Development Strategy Analysis Of Chocoladefabriken Lindt & Sprüngli Ag

4. New Product Development: Ocean Bracelets for Old Gen Zers

5. The Practices of New Product Development

6. The Notion Of A Brand & The Importance Of Its Creating

7. Chapters Summary Of “The Product Book: How To Become A Great Product Manager”

• Grocery Store
• Time Management

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How The Jobs to Be Done Theory Improves The Chances of Success in Product Development

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What Influence Upmarket Product Development

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Essays on New Product Development

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My dissertation comprises three essays that theoretically and empirically investigate three managerial relevant issues in new product development.

In the first essay, our focus is to develop a methodology that allows manufacturers to account for the impact of channel acceptance in new product development. We have developed a model to incorporate the retailer's acceptance criteria, retailer's product assortment, and competing manufacturers' potential reactions directly in the design of the new product, thereby maximizing the product's success probabilities. Our model merges a game-theoretical model with micro-level data on individual consumer preferences. Therefore, this method provides a rigorous, yet practical, solution to the problems that manufacturers face regarding channel acceptance.

In the second essay, we examine the impact of subjective characteristics (such as aesthetics and ergonomics) on consumer's preferences for products. Existing studies of consumer preferences such as conjoint models are limited in incorporating the influence of these subjective characteristics into product design. We have developed a model to determine whether the subjective characteristics (such as comfort) are connected with the objective product attributes (such as switch type), and whether both the objective product attributes and the subjective characteristics jointly affect consumer's evaluations towards products. We show that our model outperforms the conjoint model in understanding and designing appealing products for consumers.

In the third essay, our goal is to account for variations in product performance across different usage situations and conditions and to design robust new products. Consumer durables such as appliances and power tools tend to be used in various usage situations and conditions, in which their performance can vary depending on the operating conditions. We apply a Multi-Objective Genetic Algorithm (MOGA) to incorporate multi-function criteria in the generation and comparison of product design alternatives. Our approach will be particularly useful for product development teams that want to obtain customers' buy-in as well as internal buy-in early on in the product development cycle.

We illustrate the approaches described above in the context of a new power tool development project undertaken by a US manufacturer.

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New Product Development Process Term Paper

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It is very important for any company with an intention of developing a new product to ensure that all competing goals are well balanced. New product development should follow a systematic process and organizations should therefore be able to adapt to new opportunities for sustainable development.

The process of developing a new product should be thoroughly followed within the frameworks of new innovation. As much as an organization may be interested in short-run profits, it is very essential not to lose sight on the long-term goals (Annacchino, 2003).

The new-product planning process is divided into seven fundamental stages that are interdependent. The decisions made at each stage affect the ultimate outcome of the process. The first stage of a product development process is the idea generation stage where new ideas regarding new products are generated by the research and development department.

Market and consumer trends are analyzed at this stage together with the available opportunities and threats. Ethnographic development methods and competitor analysis are very important in generating ideas about new products. Opportunity analysis should be thoroughly done in order for the organization to come up with concrete facts to be used the screening phase.

Brainstorming can lead to excellent ideas about new product lines and features. The possible threats and opportunities presented by the new ideas should be used to decide whether the idea should proceed to the screening stage or not (Annacchino, 2003). The second stage in a new-product development plan is idea screening.

The main objective of this stage is to ensure that an organization’s resources are only committed to sensible ideas and concepts. In product screening, various issues such consumer benefits, market trends, profitability and the current competitive pressures are considered before any new idea is approved.

The company should also have the capacity to produce the new product or else the whole process remains to be a dream (Annacchino, 2003). The company should have the required technologies and manpower to produce the new product for the idea to sound practical.

After idea screening, the next stage is concept development and testing. During this stage, all the intellectual property issues are explored and the target market identified. Product features and all the engineering details are developed at this stage. The cost and methods of production are evaluated at this stage in order to determine the feasibility of the new product (Kolar, 2000).

The other way of testing a new concept is through interviewing prospective customers as the organization tries to find out their thoughts about the new idea before a final decision is made. The fourth stage is the business analysis stage where the price and profitability of the new product is estimated based on market trends and competition.

Methods such as break-even analysis are used at this stage to estimate the profitability of the new product. The next stage after the business analysis stage is product development. During product development, all the resources are assembled and the actual final product produced.

The products are produced according to the initial design and customer demands before being taken out for test marketing (Kolar, 2000). The next stage after product development is test marketing where the prospective market performance of the new product is determined.

At this stage, the new product is produced and tested in actual situations in which it was designed for. All the necessary adjustments are done at this stage before the product is taken to trade shows. Customer acceptance is very important and it is therefore very necessary to make sample sales to prospective customers at this stage to find out how the new product is received by customers. A test market area is selected and the actual product sold as the new product tries to penetrate the market (Kolar, 2000).

The seventh and final stage of a new product development process is commercialization. After the new product has been tested in the market during the market testing stage, the product is now ready for launching. The organization embarks on serious promotion of the new product with substantial resources being invested in advertisements.

During the commercialization stage, distribution channels are identified and the product supplied to the market. Many new products tend to fail in the market due to poor market analysis (Kolar, 2000). A serious organization should be able to foresee any potential failures and this can only be done through careful market analysis.

Lack of market demand is among the major challenges that companies face when introducing a new product to the market. Market assessment should be done in the right way for a company to avoid investing its resources in an idea that is bound to fail. There are various mistakes that companies make during market assessment that can result in new-product failures.

To begin with, a company that is unaware of its capacity to create a market demand is bound to fail. The market demand is very important for a new product to penetrate in the market. The other mistake that most companies make is only focusing on its technical merits at the expense of business and commercial factors.

Incomplete and biased market demand feedback during market testing is another reason why new products tend to fail in the market. Overdependence on the customer’s interests can make a company forget to consider other factors that affect purchasing decisions (Kolar, 2000).

Some companies rely on third party market forecasts that can be at times deceiving. It is essential for an organization that intends to introduce a new product into the market to conduct its own market research using the right methodologies. It is not a wise idea to only rely on the assumptions made by a third-party.

Sound business decisions can only be if the market is assessed professionally using proven methodologies (Kmetovicz, 1992). Detailed market investigation is the key to the success of a new product but many business executives tend to ignore this fact. Since there is always a lot of market competition for new products, an organization must put in extra effort to ensure that its products and services remain competitive within the market.

Organizations that offer services to customers have to provide other peripheral services to their customers for them to have a competitive advantage. According to the goods/services continuum, a firm should focus marketing the services it provides rather than focus on marketing pure goods (Kmetovicz, 1992).

A firm should specify its core services regardless of whether it is goods or service oriented. The bond between the company and customers is made stronger when there is more emphasis on the basic services offered to the customers. Marketing pure goods is important but what makes a company more competitive are the services it offers to its customers (Kmetovicz, 1992).

Annacchino, M. (2003). New product development: From initial idea to product management . London: Butterworth-Heinemann.

Kmetovicz, R. (1992). New product development: Design and analysis . New York, NY: Wiley-IEEE.

Kolar, A. (2000). The new product development process. New York: NY: Milwaukee School of Engineering.

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New Product Development Process Example Essay

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• Author Sandra W.

New Product Development Process Sample Essay

            The world is full of opportunities to satisfy unmet needs by creating new products and services. However, the challenge is determining the product of service that will help the organization to meet its objectives. This is because the product that a business chooses must be able to meet the overall objectives of the business, earn the company the desired profit, meet the company’s strategic positioning goals, and conform to the operational requirements of the business. This means that every good product idea is no always visible. It is therefore important that a company does thorough research of the of the new product idea before it begins to mass-produce the product so to avoid new product failure. This paper will outline the process of creating a new product

There are four main stages in the new product development process: idea generation, idea screening, idea evaluation, development of the product, and product commercialization. According to Annacchino (2003), the market is full of opportunities, ideas, concepts, and triggers of new product. Opportunities refer to identifiable business of technology gaps that a business can exploit in order to gain a competitive advantage or solve customer’s problems. An idea refers to a perception of a new product or idea that helps a business to solve the needs that exist in the market (Ahmed, 2014).

A concept refers to a description of a technology needs and the customer benefits that will result from a conceived idea. Triggers, on the other hand, refer to factors within the market that promote the creation of new products ( Urban, Hauser, & Urban, 1993) . One of the triggers to new product idea is advancement in technology, which creates a new opportunity to improve existing products. Another trigger is increase in competition, which forces business organizations to improve their products in order to remain relevant in the market. A company should choose only the ideas that fit into its overall objectives and strategies ( Veryzer, 1998) .

The second step in new product development is screening existing business ideas. The process of screening will help the business to sort out those ideas that fit with the business’ market and technological area of focus. The managers should also look at whether the idea has a potential for growth, is technologically viable, and is legal (Annacchino, 2003).

The third process in new product development is conceptualizing the product idea. One of the main activities that take place in this process is market research. Carrying out the market research helps the managers determine whether there is enough demand for then new product. The data that the business collects during the market research stage helps it in designing a projection of the costs, revenues, and profit from the new product. This will help the managers to determine whether the new product is financially viable. The business should also design a number of working prototypes for the new product. In a restaurant business, the new product prototype can be a new dish or a combination of dishes (Urban, Hauser, & Urban, 1993).

The fourth process of the new product development process is the development of product. During this process, the managers must design the final product and manufacturing the new product or service. This process also involves determining the selling price for the new price, estimating the sales volume, and conducting a market test. This process gives the business a chance to test the new product in the market to determine whether there is any real demand for it before full commercialization (Calantone & Benedetto, 1988). The test marketing helps the business to test the performance of the new product without inventing too many resources in a full-blown marketing campaign.

The fifth step in new product development is the commercialization or the launch of the new product. During this stage, the business should increase the product production and delivery so that the product is available to a larger share of the market. This will also involve observing the marketing data and production costs to determine whether the product will start earning profits as the company increases its sales volume. The company should also design a marketing promotion strategy to market the new product and create awareness in the market (Ahmed, 2014).

            The process of developing a new services such as those offered in restaurants is different to that the process of developing. The differences result from the differences between products and services, namely, intangibility, heterogeneity, perishability, inseparability, and simultaneity in production and consumption of the product and service. These unique features of services make the process of designing and marketing the new service different from that of designing and marketing tangible products. For example, intangibility of services makes it difficult to share the new service idea with others in the organization. This therefore means that the service development team must make the service tangible by the use of flow charts and pictures. Secondly, the new product ties the clients to the service provider or employees of the firm. This means that designing a new service involves more work in training the personnel within the firm in order to offer the new service to the clients (Annacchino, 2003).

            In conclusion, the process of designing a new product or service begins by identifying the opportunities available in the market. Next, the managers must screen the ideas, evaluation the available pool of ideas, develop the product, and commercialize the product. Once the company has commercialized the product, it must design a marketing strategy to promote the new product or service in order to increase awareness among the customers. However, when designing and marketing a product, a firm must keep in mind the unique features of a service and adjust the product development and promotion strategy to match these features.

Ahmed, R. R. (2014). New product development: strategy & implementation mechanism based on primary & secondary data research in pharmaceutical industry.  International Journal of Management, IT and Engineering, 4 (5), 152-176 .

Calantone, R. J., & Benedetto, C. A. (1988). An integrative model of the new product development process.  Journal of Product Innovation Management, 5 (3), 201-215.

Schilling, M. A., & Hill, C. W. (1998). Managing the new product development process: strategic imperatives.  The Academy of Management Executive, 12 (3), 67-81.

Urban, G. L., Hauser, J. R., & Urban, G. L. (1993).  Design and marketing of new products.  Englewood Cliffs, NJ: Prentice Hall.

Veryzer, R. W. (1998). Discontinuous innovation and the new product development process.  Journal of product innovation management, 15 (4), 304-321.

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