7 simple stages to develop a new product

Development of a new product is a means of enhancing the product mix and adding a depth to the product life cycle. It is done to enhance the quality of the previous product by adding some new features. A new product can be an innovative product  that has never been sold in the market such as LED televisions when it was introduced in the market for the first time. Developing a new product always does not work well it is very risky and at the same time expensive too. Before a product introduction in the market it goes through seven stages of new product development process. Here we look at  process through which products are developed from an idea generation to a fully commercialized product.

Stages of a new product development:-

1^st Stage: Idea generation

Before a product development there must be an idea in the mind which can be converted into a product. Business seek product idea that help them to achieve their business objective. It is not necessary that the idea should come from the top level management anybody in the organization can generate an idea such as sales manager, marketing head, or any other personnel of the organization. It can also arise externally from customers, competitors, advertising agencies etc.

2^nd Stage: Screening of idea

When an organization come up with few ideas in the mind they need to do idea’s screening to check which idea has greater potential in the market on the basis of its potential the idea is selected for further process. In this stage of new product development organization the company  analyze each and every idea to  determine whether they match the organizational objectives, whether they have the required resources, plant and machinery in order to produce the product. Other aspects of an idea to be weighted are nature and wants of buyer and possible environmental changes. This stage can also be called as elimination stage where a large number of ideas get eliminated.

3^rd Stage: Concept testing

To check whether the product idea is really going to generate profit in the market a small sample of potential buyers are presented with the product idea through a written and oral description to determine the attitude of the buyer towards the product. This stage give a brief idea to the organization about the reactions of the potential buyers toward the product which help the organization to decide whether the to proceed with the idea or it need any modification.

4^th Stage: Business analysis

In this step the organization ask each and every department whether they are comfortable with the idea and whether they are willing to perform their task related with the product. It evaluate the idea to determine its contribution to the firm’s sales, cost and profit. The evaluator can ask question such as  does the product fits with the organisation’s product mix? What type of competition it will be facing? Are their staff capable to produce this product? Forecasting sales is a difficult task in this stage specially for a innovative and new product. Organisations sometimes employ a breakeven analysis to determine the units to sell in order to begin making profits.

5^th Stage: Product developm

This is the stage where the organization determines if it is technologically feasible to produce the product at low cost to make its price reasonable. To test the acceptability in the market  idea is converted into a working model. This working model should reveal the tangible as well as intangible benefits associated with the product. The overall functioning  such as performance, safety, convenience and other qualities must be tested after a product development. When they find the product is successful in this stage then the marketers make decision regarding labeling, pricing, packaging and promotion mix to use in test marketing.

6^th Stage: Test marketenting

When the product is ready for a launch a limited introduction of product in  geographic area chosen to represent the intended marketing. This stage is all about testing the marketing mix for the new developed product. Test marketing should be conducted only after the product has gone through development and initial plan regarding other marketing mix. This test marketing is done mainly to reduce the risk of product failure. Selection of the appropriate test area is very important because the validity of test market results depends on selecting  the test sites which provide representation of the intended target market.

7^th Stage: Test marketenting

This is the last step where the large scale production of the new product is done. Organisation also needs to take decisions about warranties, repairs and replacement of the product’s parts. The product enters market in this stage. At the time of introduction a firm should spend enormous sums of advertising, personal selling, sales promotion and other promotion mix. It may take several years for a product to market it nationally.