1. Idea Generation (Concept)
The new product development process begins with ideas or concepts. Where do new ideas come from? They can come from employees, vendors, current and potential customers, management, competitors, and yes, family and friends.
ACTION: The Product Development team should have and/or establish a system to capture all of the ideas and score the concepts based on the company’s interests.
2. Idea Screening
Step 2 is idea screening. This step is part of the process to screen the “yes” and “no’s”. This process is important to reduce the concepts and choose the decent ones. The process could take a few days or weeks, depending on the company and the approval review. The concepts chosen are those the company feel will turn into profitable services or products.
ACTION: What happens to the concepts not chosen? They should be stored for possible future opportunities. A company should never throw out ideas; they may be valuable later or for a future customer.
3. Development and Testing of the Concept
The “yes” products move to the development and testing stage. What is the target market, this will determine what concept is developed and tested.
Developing the concept:
For example, if the concept is a widget – is your target market singles; married couples; seniors, etc. If not identified, it will be hard to test and present your business case.
The concepts should be decided to be meaningful. In the next sub-stage, concepts are tested.
Testing the concept:
To test, your target customers must be identified. The potential customers can test a concept many ways, a picture of the product, a physical product test, and use of the product. During the testing, several questions should be asked; including – is there a consumer need or want?
ACTION: Know your customer needs to get accurate testing results of the product.
4. Development of Marketing Strategy
Step 4 is where the team will design a marketing strategy to introduce the product/service to the market. The marketing strategy should be carefully thought out and will work with other teams on costs, resources and timelines:
a) Who is the target market, expected sales and market share and the return on investment/profit forecasted for 1-5 years.
b) Short term plan for the product/service – price (several financial models may be made to price test), budget (include research, launch costs, staffing costs) for the first year.
c) Long term for the product/service – sales, profit expectations, and possible exit.
ACTION: Establish a short and long term plan.