169 Reading: Overview of the New-Product Development Process
169 Reading: Overview of the New-Product Development Process
Introduction
There are probably as many varieties of new-product development systems as there are types of companies, but most of them share the same basic steps or stages—they are just executed in different ways. Below, we have divided the process into eight stages, grouped into three phases; subsequent readings will discuss these phases in greater detail. Many of the activities are performed repeatedly throughout the process, but they become more concrete as the product idea is refined and additional data are gathered. For example, at each stage of the process the product team is asking, “Is this a viable product concept?” but the answers change as the product is refined and more market perspectives can be added to the evaluation.
| Phase I: Generating and Screening Ideas | Phase II: Developing New Products | Phase III: Commercializing New Products |
|---|---|---|
| Stage 1: Generating New Product Ideas | Stage 4: Business Case Analysis | Stage 6: Test Marketing |
| Stage 2: Screening Product Ideas | Stage 5: Technical and Marketing Development | Stage 7: Launch |
| Stage 3: Concept Development and Testing |
Stage 8: Evaluation |
Stage 1: Generating New Product Ideas
Generating new product ideas is a creative task that requires a particular way of thinking. Coming up with ideas is easy, but generating good ideas is another story. Companies use a range of internal and external sources to identify new product ideas. A SWOT analysis might suggest strengths in existing products that could be the basis for new products or market opportunities. Research might identify market and customer trends. A competitive analysis might expose a hole in the company’s product portfolio. Customer focus groups or the sales team might identify unmet customer needs. Many amazing products are also the result of lucky mistakes—product experiments that don’t meet the intended goal but have an unintended and interesting application. For example, 3M scientist Dr. Spencer Silver invented Post-It Notes in a failed experiment to create a super-strong adhesive.[1]
The key to the idea generation stage is to explore possibilities, knowing that most will not result in products that go to market.
Stage 2: Screening Product Ideas
The second stage of the product development process is idea screening. This is the first of many screening points. At this early stage, much is not known about the product and its market opportunity. Still, product ideas that do not meet the organization’s objectives should be rejected at this stage. If a poor product idea is allowed to pass the screening stage, it wastes effort and money in later stages until it is abandoned. Even more serious is the possibility of screening out a worthwhile idea and missing a significant market opportunity. For this reason, this early screening stage allows many ideas to move forward that may not eventually go to market.
At this early stage, product ideas may s