As a business, your ability to maintain the competitive edge of the market requires you to strike a balance between the necessity and the difficulty of developing new products. This is where the process of developing new products comes in. It helps you test the durability of the new product for market needs and its economic utility.
Here are some of the ways you can help your business realize the benefits of new product development:
1. Save money
According to a report by Fundera, it is estimated that around 20% of new businesses fail in the first year. This is due to factors such as inappropriate market research, incompetence, and economically viable business models. The new product development process is designed to remove these risks from your business by testing the potential of your idea and the current market situation.
Identifying the effectiveness of new products in the NPD process before they go to market allows you to tailor your idea according to market needs or to withdraw it altogether to save your time and money. Having this information with you can be a secret weapon in launching a disastrous business idea and keeping your business financially stable for a long time.
2. Innovation and idea generation
The process of developing new products is the promoter and engine of new ideas for your business. Having a framework to test the viability of your new product will naturally lead to its implementation. Developing and nurturing a culture of innovation is crucial for the business growth of the company and its people.
3. Strengthen and formalize the concept development process
Just like a new business, you need to properly define your product concept early in the development cycle of a new product. This should be done with the intended consumer in mind, and therefore you should describe the product in meaningful consumer terms.
The common steps to follow are:
- A product concept is presented to senior managers or company stakeholders.
- The macro idea is approved or abandoned on its merits.
- If approved, the product is passed on for development in alternative product concepts, often branching out to target different groups.
You can streamline your business by removing these frameworks and increasing staff productivity. This is a natural step to consider before testing the concept in the new product development process.
4. Concept test
The concept development process mentioned above is best associated with the concept testing process. Once the idea is finalized, it is necessary to test it against market conditions and target it.
This is done by testing the target consumer through market research practices. It would consist in presenting a physical representation of the product to the consumer. The image or description of the words is often sufficient, but the best results are seen from the authentic physical representation.
After introducing the concept to consumers, you can ask for answers and engage with them in the discussion about the product. The responses from this discussion are used as assets to improve the product and consumer experience.
5. Marketing strategy
The process of developing new products can help you with marketing strategies for your product. It’s a natural process once your concept has been designed and tested. With the information you gathered during the development phase, you can turn it into a marketing strategy. This process is then simplified and accelerated. The three critical areas of your marketing strategy include:
- Identify the target market and the different ways to connect with them
- Analyze metrics such as product price, method of distribution, first year marketing budget.
- Long-term projected sales and profit margins.
8 best practices for your new product development process
Most companies regularly bring successful products to the market, although all of their specific approaches vary from one another. Here are some of the best practices for the new product development process:
1. Identify the needs of the target audience.
2. Effectively use market research and consumer reviews for the product.
3. Communicate within your business for more informed feedback and ideas.
4. Use available frameworks for the new product development process. Never develop a new product without a system in place first.
5. Quickly validate your product concept in the NPD cycle. For some products, this may include the “soft launch” in which you test the product in small pieces before it goes to large-scale commercialization.
6. Invite your cross-functional team to the brainstorming and ideation stage. Great ideas for your market can come from anywhere.
7. Set realistic development deadlines
8. Focus on the ideas that your business has both the resources and the expertise to implement.
Originally posted here.