UNDERSTANDING THE NEW PRODUCT DEVELOPMENT CYCLE
Continuously improving and updating products is an ongoing task for brands as consumer needs and wants are always changing. Brands need to be “productive” to ensure the loyal customers they have stay loyal. The failure to stay relevant in the market and develop new and fresh products could result in a decrease in sales and loyal consumers to buy competitor products because their brand doesn’t offer what they need. To ensure this doesn’t happen, most brands implement a a new product development cycle (NPD) that ensures the longevity of loyalty and consistent sales success.
THERE ARE EIGHT STAGES IN A NEW PRODUCT DEVELOPMENT LIFE CYCLE:
STAGE 1: IDEA GENERATION
There are many points organizations hit to get help with new product development ideas. Sources include:
- SWOT Analysis
- Market Research & Trends
- Distributors and Suppliers
STAGE 2: IDEA SCREENING
Once brands have shifted through all the new product development ideas generated from the various sources, they then select those ideas which are practical to develop. Brands need to be careful when selecting what to purse as unrealistic ideas are expensive and a waste of resources.
STAGE 3: CONCEPT DEVELOPMENT AND TESTING
When a brand determines what they believe to be a feasible new product development idea, there needs to be patent research, design due diligence, as well as questions the brand will want answered by the target market:
- What does the target market think about the new idea?
- Do they understand it and needs it?
- Will it fill the need and the want missing in the market place?
- Are there any issues with the new product that need to be addressed?
- Will there be a demand for the product?
STAGE 4: MARKETING STRATEGY AND DEVELOPMENT
This is my favorite part of the new product develop cycle as this stage is where marketers get to analyze how the product/service will be launched within the local, regional and global markets. A proposed marketing strategy will be laid out showing the marketing mix strategy of the product, the segmentation, targeting and positioning strategy and expected sales and profits.
STAGE 5: BUSINESS ANALYSIS
When the brand has a great idea and the marketing strategy makes sense the next questions is will the product be financially worth it in the long run? The business analysis stage looks at life cycle, market share, cost and the cash flow the product could generate.
STAGE 6: PRODUCT DEVELOPMENT
At this stage the production department produces the product, marketing makes plans to distribute the product and finance provide the finance for introducing the new product. The prototype undergo a serious tests, and will be presented to a selection of people made up of the the target market segment to see if any final changes need to be made. This is the last test drive before the product goes into test markets.
STAGE 7: TEST MARKETING
Test marketing means testing the product within a specific geographic area. The product will be launched within a particular region so the marketing strategy can be monitored, sales can be monitored and if anything needs to be modified before a national launch.
STAGE 8: COMMERCIALIZATION
If the marketing strategy worked and the test marketing was considered a success the product moves up and launches nationally. Keep distribution pipelines loaded with products to ensure shelf space doesn’t go to the competition.When ever I launch a new product I have to think about:
- timing of the launch: Q1/Q2; Fall or Spring ect.
- how the product will be launched: the marketing mix
- where the product will be launched: Big Box markets, retail stores, online
- will there be a national roll out or will it be region by region? Mid West, states, countries
- timing of refreshing marketing/advertising
The eight stages of new product development cycle is an ever evolving testing platform where errors will be made, designs will get edited or tossed in the trash, and a profit loss could be recorded. But having the entire team working together will ensure there is a real sense of team camaraderie, trust and support. It will also ensure the successful launch of goods or services, even if its reinventing the wheel over and over again.