New Product Development Process

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.Advertising We will write a custom term paper sample on New Product Development Process specifically for you for only $16.05 $11/page Learn More 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 id eas 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, profitabili ty 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.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More 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 t o 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 acc eptance 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.Advertising We will w rite a custom term paper sample on New Product Development Process specifically for you for only $16.05 $11/page Learn More 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).Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More References 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. This term paper on New Product Development Process was written and submitted by user Kamren Baxter to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.