NEW PRODUCT DEVELOPMENT
New product development means turning new and untested ideas into workable products. The general rule for new product development is to focus on innovation while providing value. The chief factor in successful new product development is focusing on product discovery and addressing target audience pain points. For providing a top-quality product, gathering customer insights through surveys, interviews, monitoring social media interactions, and ethnographic research is of utmost importance.
Furthermore, product discovery should be an ongoing process. It should continue through the product life cycle stages, i.e., idea generation, idea validation, PoC and prototype validation, MVP development, pre-launch, and post-launch. In other words, when you introduce a new product to the market, you must constantly seek to change and expand it to meet the target community's needs and be flexible.
What is New Product Development (NPD)?
The New Product Development (NPD) process is about taking advantage of a market opportunity that revolves around customer needs, exploring idea feasibility, and delivering efficient products. The new product development approach revolves around working on an entirely new idea, where uncertainty about its subsequent development and adoption is high. Here's an insight into each of these steps to understand how a new product is developed.
Seven stages of the new product development
Creating new products and services is a challenging and ups and down process. However, following a systematic new product development process can help businesses gain clarity and confidence in what they are building.
Step 1: Generate ideas
The goal should be to generate many valuable ideas that can form the basis of a new product development strategy. The main focus for this stage should be the arrangement of brainstorming sessions that prioritize solving one of the problems of the target community. At this stage, safe and ready-to-implement ideas are not produced. Still, raw, unproven theories are proposed; changes are made based on the members' views, and the final picture of the idea is created.
A. personal problems
One of the best ways to develop an idea is to look at the problems the business is facing. All a business needs to do is focus on that specific problem and create a solution as a "one size fits all" solution to a common problem.
B. Check the conditions for each of the problems listed
This phase focuses on the feasibility of short-list problems and their solutions based on the 4U approach.
- Unworkable: Find out if the product concepts address real problems. Can the product fill the gaps in the customer experience, and will the product achieve product-market fit?
- Unavoidable: Is the problem the product addresses inevitable to the point that compliance is mandatory? Note that solving that problem is a choice or a compulsion.
- Urgency: Is the problem urgent, and is the solution highly demanded by the target market? If the answer is yes, this could be an opportunity to cover the white space in the market with the original product.
- Underserved: Is no product available that addresses the user's existing problems? Look for the white space in the market and keep an idea that looks promising.
C. Provide possible solutions
After identifying the problem, it is time to look for possible solutions to fix it. For every user problem, there should be potential new product development opportunities. It doesn't matter how common or unusual the problem is, as long as your solution is unique. Even if a product similar to yours already exists, make sure your product offers a different service.
D. Limit problems + solutions
Create a comparison chart that lists all the problems you brainstormed and the solutions. Circulate findings throughout the organizational structure to arrive at a stable set of issues. If you still can't agree on narrowing down the problem, use the Replicate, Re-Purpose and Upgrade approach.
- Replicate: This approach focuses on creating a product similar to a competitor's product with new conditions in the market. When done with a Minimum Viable Product (MVP) launch, the strategy should be to expand the business by introducing out-of-the-box and unique features in the future.
- Re-Purpose: In this approach, your new product is a modification of an existing product.
- Upgrade: This new product development concept revolves around introducing a new business model that is better than existing solutions. Better can mean improved performance, better speed, and addressing the challenges a competitor faces.
Step 2: Idea screening
This stage involves developing a new product around an idea that has been identified as having the highest potential for success. Put all available opinions on the table for internal review. To screen the concept, refer to people with industry knowledge and experience in this field. For a new product development idea, having a proof of concept (POC) should be a priority as it helps to check the feasibility of the concept.
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis can be another suitable method for short-listing new product development ideas. With this, a detailed analysis of the concept is done to identify an idea in which the strengths and opportunities overcome the threats and weaknesses. Ultimately, the new product development idea should be unique so that people don't need to be convinced to pay for it.
Step 3: Concept development and testing
Before starting the new product development process, you should prioritize building an accurate version of the idea and user stories. This value proposition evaluation is the first step toward concept development and testing. At the very least, it ensures that problems with this approach are caught early, and the team can correct course sooner.
It is better to follow these steps to develop the concept:
1. Quantifying the gain/pain ratio
A business must create a clear image for its product from the consumer's point of view. You can do this by calculating the gain/pain ratio, where gain and pain mean:
Gain = the benefits of the product to the customer
Pain = the customer's effort to understand and use the product.
2. Conduct competitor analysis
Knowing about your competitors is a critical strategic step to consider. Understanding competition makes it easier to infer
Where the competitor is lacking
Where is the scope for improvement?
White space available in the market
3. Using the main features of the product
Having a consumer experience with a product is essential for all businesses. When creating a list of such features, it is crucial to know-how if a feature innovative and how does it solve a problem?
4. Create a value proposition chart
Even after being convinced of an idea's wisdom and utility, articulating it clearly to the end-user in their context is an entirely different story. The end-user must be given a clear picture of what the new product can do.
5. Concept test
Once the value proposition is ready, it's time to present it to selected customers. How they perceive this idea is the perfect test ground for the efforts, you've made up to this point. If the idea does not seem promising, it is wise to repeat the idea screening process to develop a new product.
Step 4: Market strategy/business analysis
Marketing strategy means drafting a way to reach the target audience. This business analysis will help determine whether new product development efforts are worth the financial investment (i.e., will it create an ongoing value stream)? It is essential to consciously strategize the selling price by identifying the product's base price.
Step 5: Product development
Once the new product development idea is in place, the market strategy is documented, and the business analysis is completed, it's time to continue the product life cycle development process.
New product development starts with prototype development and then MVP.
1. Prototype
This phase focuses on creating user motivation for the product, which is then shared with stakeholders. This helps visualize the product's appearance and compliance with ergonomic best practices. In this step, you create a prototype of your desired product and present it to the market. You collect users' opinions from using it and modify and rebuild your product based on the feedback you get from them.
2. Minimum Viable Product (MVP)
It focuses on user stories for the new product that differentiates it from others. After design, development, and testing, the MVP is released in the market with minimal features. Future iterations depend on the initial response.
Step 6: Deployment
Once the MVP is ready, efforts shift from development to deploying the product in a live environment. The product is moved to the live setting, which means the product is available and ready to be used by end-users.
Step 7: Market Entry / Commercialization
Commercialization is a general term that involves various strategies to ensure a new product's success. If all the plans mentioned earlier are correctly in place, nothing can stop a product from attracting attention and product-market fit.
Some marketing activities that help make a product more attractive include:
1. Marketing the concept of the product
The idea here is simple: instead of endlessly bragging about product features, talk about the concept and purpose of the product. In short, answer how the product makes the customer's life easier. You need to change your approach when a project doesn't go as you envisioned. How do you do this? Start building awareness about inbound marketing to realize its impact on your product's position in the market.
2. Having a brand voice
A unique way of thinking and a unique voice always attract an audience of all ears. This is where the marketing team plays an important role. They need to create an effective communication style that best represents the brand. Whether it's blogs, emails, or even website content, all of these elements must be well thought out and transparent in their message. Ultimately, these elements must have the power to attract the audience.
3. Holding attractive webinars
Webinars are one way to attract quality leads. Hold webinars discussing how the new product will benefit your audience and describe the introduced features. Webinars can also help promote discoverability:
Findability: Features the customer knows are easy to find and use.
Discoverability: It is easy to find and use features the customer does not know. Please discuss the product, describe its features and see the positive impact on the result.
Benefits of the new product development process
Here are some benefits of sticking to the new product development process:
- It helps to check the technical feasibility of the idea
- It ensures more time to market
- Effectively meets customer needs
- It multiplies the chances of success
- Reduces technical debt
- Better handling of feature creep
- Negates opportunity cost