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New Product Development
New Product development is a journey. It’s the road which leads to the actual product and then the actual product to the market. As it is said, it all starts with an idea. Every product goes through a number of stages before being introduced in the market.

Idea Generation
The first stage of the New Product Development is the idea generation. Ideas come from everywhere, can be of any form, and can be numerous. This stage involves creating a large pool of ideas from various sources, which include

  • Internal sources – many companies give incentives to their employees to come up with workable ideas.

  • SWOT analysis – Company may review its strength, weakness, opportunities and threats and come up with a good feasible idea.

  • Market research – Companies constantly reviews the changing needs, wants, and trends in the market.

  • Customers – Sometimes reviews and feedbacks from the customers or even their ideas can help companies generate new product ideas.

  • Competition – Competitors SWOT analysis can help the company generate ideas.


Idea Screening
Ideas can be many, but good ideas are few. This second step of new product development involves finding those good and feasible ideas and discarding those which aren’t. Many factors play a part here, these include –

  • Company’s strength,

  • Company’s weakness,

  • Customer needs,

  • Ongoing trends,

  • Expected ROI,

  • Affordability, etc.


Concept Development & Testing
The third step of the new product development includes concept development and testing. A concept is a detailed strategy or blueprint version of the idea. Basically, when an idea is developed in every aspect so as to make it presentable, it is called a concept.
All the ideas that pass the screening stage are turned into concepts for testing purpose. You don’t want to launch a product without its concept being tested, right?
The concept is now brought to the target market. Some selected customers from the target group are chosen to test the concept. Information is provided to them to help them visualize the product. It is followed by questions from both sides. Business tries to know what the customer feels of the concept. Does the product fulfil customer’s need or want? Will they buy it when it’s actually launched?

Their feedback helps the business to develop the concept further.

Business Strategy Analysis & Development
The testing results help the business in coming up with the final concept to be developed into a product.

Now that the business has a finalized concept, it’s time for it to analyse and decide the marketing and other business strategies that will be used. Estimated product profitability is estimated, marketing mix, and branding strategies are decided for the product.

Other important analytics includes

  • Competition of the product

  • Costs involved

  • Pricing strategies

  • Breakeven point, etc.

Product Development
Once all the strategies are approved, the product concept is transformed into an actual tangible product. This development stage of New Product Development results in building up of a prototype or a limited production model. All the branding and other strategies decided previously are tested and applied in this stage.

Test Marketing
Unlike concept testing, here the actual prototype is introduced for research and feedback. Actual customers feedback are taken and further changes, if required, are made to the product. This process is of utmost importance as it validates the whole concept and makes the company ready for the launch.

Commercialization
The product is ready, so should be the marketing strategies. The marketing mix is now put to use. The final decisions are to be made. Markets are decided for the product to launch in. This stage involves briefing different departments about the duties and targets. Every minor and major decision is made before the final introduction stage of the New Product Development.
New Product Development - Product Planning and Market Strategies, Marketing Management | Marketing Management - B Com

The document New Product Development - Product Planning and Market Strategies, Marketing Management | Marketing Management - B Com is a part of the B Com Course Marketing Management.
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FAQs on New Product Development - Product Planning and Market Strategies, Marketing Management - Marketing Management - B Com

1. What is product planning and why is it important in new product development?
Ans. Product planning refers to the process of identifying and defining a new product or service that meets the needs and preferences of the target market. It involves conducting market research, analyzing consumer behavior, and considering factors such as product features, pricing, distribution, and promotion. Product planning is important in new product development as it helps companies understand customer demands, identify market opportunities, and develop strategies to effectively introduce and position their products in the market.
2. What are the key elements of a market strategy in new product development?
Ans. The key elements of a market strategy in new product development include: 1. Target market identification: Defining the specific segment of the market that the new product will cater to based on factors such as demographics, psychographics, and behavior. 2. Positioning: Determining how the new product will be perceived in relation to competing products in the market, and developing a unique selling proposition (USP) to differentiate it. 3. Pricing strategy: Deciding the optimal price for the new product based on factors such as production costs, competitor pricing, and perceived value by customers. 4. Distribution channels: Identifying the most suitable distribution channels to reach the target market effectively, whether through direct sales, retail partnerships, or online platforms. 5. Promotional activities: Developing a comprehensive marketing communication plan to create awareness and generate demand for the new product, including advertising, public relations, and sales promotions.
3. How does market research contribute to product planning in new product development?
Ans. Market research plays a crucial role in product planning for new product development. It provides valuable insights into customer preferences, needs, and buying behavior, which helps companies understand market demand and identify opportunities. Market research helps companies gather data on consumer demographics, psychographics, and geographic factors, enabling them to segment and target their market effectively. It also helps in identifying potential competitors, analyzing market trends, and assessing the feasibility of introducing a new product. Overall, market research provides the necessary information for companies to make informed decisions and develop successful product strategies.
4. What are the challenges that companies may face in product planning for new product development?
Ans. Companies may face several challenges in product planning for new product development, including: 1. Identifying market needs: Understanding customer preferences and needs accurately can be challenging, as consumer behavior is influenced by various factors, and their preferences can change over time. 2. Competitive analysis: Conducting thorough research on existing competitors and analyzing their product offerings, pricing strategies, and market positioning can be time-consuming and complex. 3. Resource allocation: Allocating resources effectively, including financial, human, and technological resources, to support new product development can be challenging, especially for smaller companies with limited budgets. 4. Technological advancements: Keeping up with rapidly evolving technologies and incorporating them into new products can be a challenge, as it requires continuous research and development efforts. 5. Market acceptance: There is always a risk of market acceptance, where a new product may not be well-received by the target market due to factors such as lack of awareness, resistance to change, or competitive alternatives.
5. How can companies ensure the success of their market strategies in new product development?
Ans. To ensure the success of their market strategies in new product development, companies can follow these key steps: 1. Conduct thorough market research: Gather comprehensive data on customer preferences, needs, and market trends to make informed decisions and develop effective strategies. 2. Test and validate ideas: Prototype, test, and gather feedback from potential customers to refine the product and ensure it meets their expectations. 3. Develop a strong value proposition: Clearly define the unique selling proposition (USP) of the product and communicate it effectively to the target market to differentiate it from competitors. 4. Implement an integrated marketing communication plan: Develop a cohesive marketing campaign that includes advertising, public relations, social media, and other promotional activities to create awareness and generate demand. 5. Continuously monitor and adapt: Regularly evaluate the performance of the new product in the market and adjust strategies as needed based on customer feedback, market dynamics, and competitor actions.
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