Product development, sometimes referred to as new product management, is a series of steps that includes the conceptualization, design, development and marketing of brand new, or nearly branded products or services. The goal of product development is to develop, sustain and increase an organization’s marketshare by satisfying consumer demand.
Since not every product or service is used by every customer, defining the target market is necessary and should happen in the early phases of the product development process. Quantitative market research should take place at all steps of the design process, including before the product is conceptualized, while it is being created and after it has launched.
The eight major steps in the new product development process include:
Ideas: This entails generating ideas for new products. Organizations can generate hundreds or even thousands of ideas and narrow them down to just a few. Idea sources can be both internal and external.
Screen Ideas: This means narrowing the ideas to select the best ones. The goal is to reduce the number of ideas.
Development and Testing: The idea must now be developed into a concept. The organization must develop the new product into different product concepts. The new concepts are then tested by target consumers to discover the value of each concept.
Developing Market Strategy: A target market description, value proposition and sales goals are conceived at this time.
Business Analysis: This step reviews the sales, costs and profit projections of the new product to decide if the organizational goals are met.
Product Development: A physical product is developed. Often, multiple versions or prototypes are created.
Test Market: The product is tested in a realistic market setting. This step provides the organization the ability to not only test the marketing, but also the product.
Commercialize: At this stage, the product is available for purchase in the marketplace.
Out of all the steps in the new product development process, the most important focus is to create outstanding customer value. If this is achieved, the product is likely to be successful.