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Home > New product development

New Product Development is a business and engineering term which describes the complete process of bringing a new product to market. There are two parallel aspects to this process : one involves product engineering ; the other marketing analysis. Marketers see new product development as the first stage in Product Life Cycle Management.

1 Types of new products

There are several types of new products. Some are new to the market, some are new to the firm, and some are new to both. Some are minor modifications of existing products while some are completely innovative. These are displayed in the following diagram.

2 The process

There are several stages in the new product development process:

• 1 Idea Generation
  • ideas for new products obtained from customers, R&D department, competitors, focus groups, employees, or trade shows
  • formal idea generating techniques include attribute listing, forced relationships, brainstorming, morphological analysis, problem analysis and early prototyping
• 2 Idea Screening
  • eliminate unsound concepts
  • must ask three questions:
    • will the target market benefit from the product
    • is it technically feasible to manufacture the product
    • will the product be profitable
• 3 Concept Development and Testing
  • develop the marketing and engineering details
    • who is the target market
    • what benefits will the product provide
    • how will consumers react to the product
    • how will the product be produced
    • what will it cost to produce it
  • test the concept by asking a sample of prospective customers what they think of the idea
• 4 Business Analysis
  • estimate likely selling price
  • estimate sales volume
  • estimate profitability and breakeven point
• 5 Beta Testing and Market Testing
  • produce a physical prototype or mock-up
  • test the product in typical usage situations
  • make adjustments where necessary
  • produce an initial run of the product and sell it in a test market area to determine customer acceptance
• 6 Technical Implementation
  • New program initiation
  • Resource estimation
  • Requirement publication
  • Engineering operations planning
  • Department scheduling
  • Supplier collaboration
  • Resource plan publication
  • Program review and monitoring
  • Contingencies - what-if planning
• 7 Commercialization
  • launch the product
  • produce and place advertisements and other promotions
  • fill the distribution pipeline with product
  • critical path analysis is useful at this stage

These steps may be iterated as needed. Some steps may be eliminated. To reduce the time the process takes, many companies are completing several steps at the same time (referred to as concurrent engineering). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in which nothing is done until problems occur). Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which a new product development team is always looking for opportunities.

People respond to new products in different ways. The adoption of a new technology can be analyzed using Diffusion of innovationsDiffusion of innovations is the social sciences theory for how and why new ideas spread through cultures. French sociologist Gabriel Tarde originally claimed that sociology was based on small psychological interactions among individuals, especially imitat theory.

3 Protecting new products

When developing a new product many legal questions arise, including: How do I protect the innovation from imitators?; Can the innovation be legally protected?; For how long?; How much will this cost?. The answers are complicated by the fact that several legal concepts may apply to any given innovation, product, process, or creative work. These include patentA patent is a set of exclusive rights granted by a government to an inventor or applicant for a limited amount of time (normally 20 years from the filing date). The term "patent" originates from the term patere which means to lay open (to public inspectios, trademarkSee also: brand Bass Red Triangle, was the first trademark registered in Britain in 1876. A trademark ( Commonwealth English: trade mark is a distinctive name, phrase, symbol, design, picture, or style used by a business to identify itself and its products, service markA trademark used to identify a service rather than a product is called a service mark (SM). In the United States, service marks have a different standard of use in order to count as a use in commerce, which is necessary to complete registration and to stos, tradenames, copyrightA copyright is a form of intellectual property that grants its holder the sole legal right copying their works of original expression, such as a literary work, movie, musical work or sound recording, painting, computer program, or industrial design, for as, and trade secretIntellectual property A trade secret is a confidential practice, method, process, design, or other information used by a company to compete with other businesses. It is also referred to in some jurisdictions as confidential information. The concept is thas. It is necessary to know which are applicable and when each is appropriate. This varies somewhat from jurisdiction to jurisdiction. The advice of a lawyer that specializes in these matters is essential.

Generally, copyrights are fairly easy to obtain but are applicable only in certain instances. Patents on the other hand, tend to involve complex claims and approval processes, tend to be expensive to obtain, and even more expensive to defend and preserve.

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