New product development process: It is a process involved in bringing a new product or services by converting the idea. The new products and services created by the producers will be launched in the market. There is a 7 stage process involved in launching the new products to people in the market.
Process involved in creation and launching of new product development consists:
- Idea generation - First step in new product development starts with idea generation. The producers have to create ideas to develop the new products. The company will ideas from many sources like customers, internal environment, external environment, competitors and through internet.
- Idea screening - After creating many ideas, the producers have to shortlist the ideas which are really profitable and feasible for the company. The ideas which can be developed into a product have to be found out by the company to sell in the market.
- Concept development and testing - The shortlisted or selected idea has to be made into a product concept. The product concept refers to the product which will provide values to the customers. The developed concepts by the company have to be evaluated and analyzed after conducting test of the product concept with the customers. The results from customers about the product concept can be used to forecast the sales.
- Market strategy development - In this stage of the process, the firm needs to find out the positioning of the product among the target audience, profits in the starting stage and expected sales. Then they have to make a budget to market the product, determine or fix the price and distribution method for distributing the product. Then the companies need to forecast the sales level and profit for a longer period of time and marketing mix for the goods and services. The companies have to do business analysis. Business analysis is done to identify whether the marketing strategy will help the company to reach its targets.
- Product development - When the company is happy with business analysis, then it has to start product development. The product concept will change into product at this stage of development of product. The R & D department helps to develop the new product (prototype). After the development of the prototype, it will be distributed to the targeted audience. The functional tests have to be done by the firms to identify the safety of product.
- Test marketing - When the product is tested okay in the functional tests, then the realistic products will be launched in the market settings. The companies will incur more cost at this stage. This is an important step to identify the effectiveness level of marketing mix.
- Commercialization - In this stage, the products are finally launched in the market. The firms have to spend a lot at this stage for promotion of the product. The companies have to be careful when they are launching the new product. So, they have to choose the right time as well as the right place.