New Product Development Project Stages - Step-by-Step

An earlier post provided an overview of the product launch process. However, this post provides more of a project-oriented step-by-step guide to successfully complete the new product development (NPD) project, especially as those steps relate to (beta) testing. There is no single best set of steps that apply to all businesses. Consequently, these steps must be adapted accordingly. Hopefully, your main take away will be that, regardless of your business, having a new product development system is necessary for product success (ie the product's ability to advance through the product life cycle).

New product development (NDP) refers to the process of moving a product from a broad concept through to delivery for sale in the market. An NDP project process is likely to be more efficient in terms of cost, time and other resources and with fewer of the risks associated with new products. 

1. Business strategy goals (related to New Product Development)

As mentioned otherwise, new product development is a type of growth strategy (Ansoff Matrix) or even a means of re-engineering a current product to strategically re-position closer to being a star or cash cow it within your product mix / portfolio (See the BCG Matrix). 'Growth' relates to raising sales revenue and or sales volume (by seizing market share from the competition). Example(s):

strategic goals (related to business goals): 

• to increase share of existing market by x%
• to increase product X's contribution to business profit by x%. 
• To re-position brand more competitively 
• to be the first to enter the market with a certain product / product benefit
• to improve customer retention
• to enter into new market sectors
• to introduce a new product variant
• to determine the aspects of marketing where product development will provide the greatest competitive advantage
• To reduce risk of new product failure

strategic goals (related to product / product performance): 

• to improve product performance reliability by x%
• to streamline production cycle by x%

2. Conceptualization. 

This involves the first or 'research' part of the research and development process. As we know, effective marketing starts with understanding the target market. This stage should focus on psychographics that can help you to establish product objectives. Know your target market's key motivators, usually pain points or desires. If your market's pain points are sufficiently distinctive, even mutually exclusive, create defined segments with even more niche product objectives. This can provide a great opportunities for positioning your brand your unique value proposition (UVP). For a more efficient development process, absolutely do NOT skip this step. This step will save you from wasting time and other resources on random, directionless efforts. 

Spend time studying the competition's offering to understand the needs they are serving. You can also find out a lot about gaps in the market by reading the product reviews of several brands.

Example(s):  

• Need 'a': solution objective 'a'. 

3. Design 

Closely following the solution objectives (established above), plan what prototypes like formulations and sketches will look like. Do not get hung up on creating the most original design. After all, numerous successful products were the result of iterating on preexisting products. use the SCAMPER model as a guide for iterating upon preexisting products.

S - Substitute. Can you substitute materials or some other element?

C - Combine. Can you combine 2 otherwise unrelated products to have a synergistic outcome? Modern luxury cruise ships are essentially the combination of water-based transport with hotel accommodation and tourism.

A - Adapt. Can you tweak a preexisting product (or some other of the 4Ps) to improve it in some significant way?

M - Modify. Can you disrupt the market by changing something in the market, like: your production model (think Dell's 'Just in Time' production model in the early 2000s); the way the market consumes your product (think of how online courses disrupted the business of academia). 

P - Put to another use. Can you use another industry's declining product or waste otherwise?

E - Eliminate.

R - Reverse.

4. Validate your idea

The entire process is non-linear. For this reason, I find myself reverting to this step numerous times beyond (and even before) this point to test my thinking before investing further resources of time and money. I generally seek feedback for preliminary ideas from sources like the following.

• interest groups of fellow producers
• Reddit threads that are frequented by your target
• Crowdfunding that provides trustworthy validation of demand for your product
• Google Trends can provide insight into your market's interest level in your product and the types of keywords the market uses the most.
• Study your competition's products, their customers' reviews. Join their newsletter to see how they do marketing. Good reviews about a particular idea validates its marketability. You simply need to figure how to differentiate what your competition does. 

Establish formal engineering specifications not only for the product but the entire marketing 4Ps for products (production, promotion, etc) or 7Ps for services. 

All of these specifications are an integral aspect of Risk Management to assess and mitigate the risk of product failure within the immediate term and, in general after launching, to avoid product defects whose non-compliance can result in product liability claims. To clarify, product failure refers to when new products do not advance through the normal product life cycle, for one of several reasons that include some type of marketing research oversight or the adoption of a 'killer assumption'. 

Example(s): 

• Colgate is a brand that is renowned for toothpaste, a product used for removing waste from the mouth. Not surprisingly therefore, when Colgate tried to use its well established name to create a food product line, the product failed. Many consumers might have had gag reflexes over the idea. This is one among numerous cases that illustrate that, since markets form strong associations with brands over time, brands can not easily switch industries. 
• Regarding production; mechanical exfoliant x and fragrance y can be used in the 'comedone' segment but never for the segment with sensitive skin. Even production as it relates to manufacturing should meet specific standards like requiring electronic product formulation worksheets for preventing errors may be used. Regarding promotion as it relates to product labels; appropriate warnings are required to ensure that members of the sensitive skin segment avoid using unsuitable exfoliating products. 

5. Prototype's Design Testing & Iterating 

Alpha testing / Inhouse testing

As you will recall, design risk is the most serious form because its dangers are persistent rather than being one off. Consequently, comprehensive product testing is necessary at this stage to ensure the design works as required and the product meet its objectives. Example: You may test to ensure that the ingredients combine well and do not go bad in different conditions. Even if you as the manufacturer are not the target market and can not judge, you try to do preliminary tests as a consumer regarding the things you can test like safety. Before proceeding to the next stage, you may also ensure your processes allow you to easily replicate the same results. For instance, you may have a recipe sheet that include all the minutae which you will follow to make samples.   

Beta testing in the market & launch 'collateral' production.

Validation is sought from members of the target market regarding whether the product can in fact meet customer needs. When this product objective has been reached, the testing market members provide positive feedback that will be used as promotional material for the product launch, called 'collateral production'. Marketing collateral refers to any media material used for promoting goods or services. Extending the example of the cosmetic company, Members of the target market's 'comedone' segment can confirm (r disconfirm) whether the product exfoliates sufficiently well. Beta testing can be either closed or open. 

• Closed beta testing aka 'private beta testing' involves releasing the product to a restricted group. 
• Conversely, open beta testing, aka 'public beta testing' is open to larger groups or any interested member of the general public. 

Beta testing is nerve wracking because you are exposing your work for third party judgement for the first time. To ensure the process is fruitful, get testers who are 1) representative of the target market 2) unbiased (which excludes family and friends who can respond based on jealousy or fear of hurting your feelings), 3) are willing and able to share their feedback emotionally, intellectually and logistically. Furthermore, your participation as a researcher can be improved if you 1) observe tester behavior before asking questions, 2) ask questions in a way that is unbiased and not leading and 3) create a data collection & analysis tool like a survey using apps like Google Sheets.

As just mentioned, recruiting unbiased beta testers is necessary. One means of accomplishing this is that, once you already have social media, set up an invitation to an 'join the exclusive beta testing team'. You can set up a landing page to collect emails. Be sure to remind testers to provide feedback as many do not remember. 

Remember to test all of your 4Ps or 7Ps, not only your product. For instance, you should test the following. Example(s):

• regarding a new product:
• your supply chain. Can it withstand supply problems associated with single suppliers?
• regarding a new service:
• Will your clients find your process easy (or tedious)?

6. Business Feasibility Analysis

As part of this process, do feasibility testing of the potential financial success of your proposed solution. 

7. Commercialization & Launch

If the product remained away from the general public, you can launch it at this point. Read more about preparing for a product launch. If you have already done a soft launch for a minimum viable product / MVP, you can intensify your promotions to a wider audience.

8. Product Improvement

Data mining through customer relationship management (CRM), reviews and the like should be in place to allow a business to continuously evaluate and re-evaluate the product's design (and marketing mix elements) for improvement.

CONTENT RELATED TO NEW PRODUCT DEVELOPMENT & PRODUCT TESTING

• Articles related to  New Product Development (NDP)
• Minimum viable product, a quicker way to market in the new product development process
• New product launch
• Register and protect your trademarks
• Project management 101
• Boston Matrix
• Risk Management 101
• Product liability insurance.
• Read an overview of the product launch process
• Brand awareness & brand awareness srategy
• Brand strategy
• Break-even analysis