LIBRARY

New product development

New Product Development is a business and engineering term which describes the complete process of bringing a new product to market. There are two parallel aspects to this process : one involves product engineering ; the other marketing analysis. Marketers see new product development as the first stage in Product Life Cycle Management.

Types of new products

There are several types of new products. Some are new to the market, some are new to the firm, and some are new to both. Some are minor modifications of existing products while some are completely innovative. These are displayed in the following diagram.

Types of new products

The process

There are several stages in the new product development process:

Idea Generation      ideas for new products obtained from customers, R&D department, competitors, focus groups,    employees, or trade shows      formal idea generating techniques include attribute listing, forced relationships, brainstorming,    morphological analysis, and problem analysis   Idea Screening      eliminate unsound concepts      must ask three questions:   will the target market benefit from the product    is it technically feasible to manufacture the product    will the product be profitable Concept Development and Testing      develop the marketing and engineering details    who is the target market    what benefits will the product provide   how will consumers react to the product   how will the product be produced   what will it cost to produce it      test the concept by asking a sample of prospective customers what they think of the idea Business Analysis     estimate likely selling price      estimate sales volume    estimate profitability and breakeven point  Beta Testing and Market Testing     produce a physical prototype or mock-up      test the product in typical usage situations    make adjustments where necessary    produce an initial run of the product and sell it in a test market area to determine   customer acceptance  Technical Implementation     New program initiation      Resource estimation    Requirement publication    Engineering operations planning    Department scheduling   Supplier collaboration    Resource plan publication    Program review and monitoring    Contingencies - what-if planning Commercialization     launch the product      produce and place advertisements and other promotions    fill the distribution pipeline with product    critical path analysis is useful at this stage

These steps may be iterated as needed. Some steps may be eliminated. To reduce the time the process takes, many companies are completing several steps at the same time (referred to as concurrent engineering). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in which nothing is done until problems occur). Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which a new product development team is always looking for opportunities.

Protecting new products

When developing a new product many legal questions arise, including: How do I protect the innovation from imitators?; Can the innovation be legally protected?; For how long?; How much will this cost?. The answers are complicated by the fact that several legal concepts may apply to any given innovation, product, process, or creative work. These include patents, trademarks, service marks, tradenames, copyrights, and trade secrets. It is necessary to know which are applicable and when each is appropriate. This varies somewhat from jurisdiction to jurisdiction. The advice of a lawyer that specializes in these matters is essential. Generally, copyrights are fairly easy to obtain but are applicable only in certain instances. Patents on the other hand, tend to involve complex claims and approval processes, tend to be expensive to obtain, and even more expensive to defend and preserve.

See also

brand management  marketing