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

Facebook Audience Insights

Facebook Audience Insights

Facebook audience insights is a tool designed to help marketers understand more about their target audience. Among other things, it provides aggregate information about geography, demographics, purchase behavior and so on. However, this post is primarily concerned with product advertising using psychographic interest-based marketing because psychographics are often more reliable in predicting potential customers (than the other demographic variables).
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To use Facebook Audience Insights

• Log in to your Facebook account
• Click 'Ads manager' in the left column (or use this URL: https://www.facebook.com/ads/manager/accounts/ )
• Click the 3 horizontal bars in the top left corner for menu options. Select 'all tools' and then 'audience insights'
• Select one of the 3 types of audience 
• custom audience. Example of use is for your mailing list, especially a large one
• people connected to your Facebook fan page
• everyone on Facebook. This is usually useful for general market research
• Name an interest in the 'interests' text box in the left column, example 'competitive swimming'. The named interest must be anything that Facebook users can 'like', whether activities, celebrities, companies (especially if they sell your type of product), highly relevant books, broadcast programs, teams, other forms of competition and so on. It should be a top thing your target market really appreciates. Additionally, it should somehow relate to your product and be as specific as possible. For instance, interests like 'animals' is too broad. 'Chihuahua' is a better alternative. If need be, type in interests and see whether any of Facebook's suggested interests seem better as your initial interest.

NB. Facebook audience insights entries in the left column defines your chosen target market characteristics. As you will see later, everything else in the main right section is where Facebook displays suggestions and results. 

Notice the 'new audience' section for the market size, pictured below. It explains the potential reach of your Facebook ad. Remember to continually review how your changes to variables, interest (and otherwise), impact on your target market size.

• Look at 'Page likes' in the top menu (as pictured below). This option displays a list of interests that the current 'competitive swimming' market has also liked. 

For instance, people who like 'competitive swimming' may also have liked a fictitious 'Mermaids team' (or a famous swimmer and so on). This is noteworthy because people who actually like both interests are more likely to be truly interested in your swimwear product than otherwise. Their interest in those related variables are unlikely to be purely by chance. BTW, if the 'Page likes' display is empty, this means the audience is too small to be displayed.

• Add any of the Facebook suggestions of interests (like the 'Mermaid team') to your target market by typing the name into the 'additional entries' text box in the 'interests' section in the left column.


• You may continue to select as many interest groups as you like to increase specificity in defining your target market. Some marketers are known to have established over 20 interests.
• While your focus may be on interests, you may also create the persona of your target market by subsequently reviewing secondary variables in the suggestions section. These variables include demographics, location and so on. As a beginner, you might find it easier to ignore these secondary variables in your earlier advertising campaigns, ie until you have more experience and insight.

You may even toggle interests (and other variables on and off) to see the impact on the characteristics of your target market.

When you use demographics, a distribution bar graph like this (below) will appear. The dark blue distribution bars represent the target market you have named in the left column. For the sake of comparison, the light blue represents all of Facebook users. For instance, this graph shows that your current market is more evenly distributed for both sexes. The highest level of interest exists among people in the 45-54 age range of both sexes. Your market is a bit different to the general Facebook population which is very noticeably skewed with most interest occurring among the younger groups 19-24 and especially 25-34 before gradually declining with age. 

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CONTENT RELATED TO FACEBOOK AUDIENCE INSIGHTS

• Use market research from Facebook Audience Insights when setting up Facebook ads
• Google Trends may provide some additional market research ideas
• Use Facebook for promotional strategies to build brand awareness
• Facebook audience insights may also help you to create a target market customer avatar.

Google Trends

Google Trends is a useful tool for market research. Trend analysis refers to the process of studying how the market's interest progressed and or changed over time as a means of predicting how that market interest is likely to proceed in the future. The various market research uses include the following.

• To compare trends across countries. Example: To compare level of interest between the US and the UK for a particular product.
• To get a visual idea of the trend. Example: To know if interest in a product is consistent, a fad or seasonal (1)  -- --
• To choose among various elements that complement the keyword. Example: To know which add-on products should be offered; to know which (communication / advertising, image, service, etc) element best complements your product.
• To find out which keywords are gaining momentum and at what rate. Example: While doing a trend analysis for product X, you may learn that that top searches involved "product X2" and "product A3". Additionally, there is an upward (or downward) increase in interest in "product Z321" as people are searching for it up to +600 times. In fact, another product, "product Z322" is breaking out, ie its growth is beyond 5,000. Ultimately, you know that Z322 is the not product that you might want to research further.
• To find a more popular keyword among synonyms. Example: Do people prefer the word "protein bar", "health bar" or "granola bar"? (5)
• To get clues for better defining the target market as it relates to geographical location. When researching keywords, a world map shows the countries with the top interest. You can get further detail regarding regions and even cities within each top country also. By extension, you might be able to make guesstimations about other characteristics of the market in terms of ethnicity, religion and so on.
• To decide on trending topics for blog or other content ideas. In fact, you can even understand these trends for specific kinds of web search.

Understanding the following 2 terms may help you to understand the software and this article. When typing in search keywords, Google Trends' predictive typing may complete the word. However, you will often see multiple options for the same keyword search. As in the image immediately below, this occurs because Google Trends often sees a single keyword within different contexts. In this example as a search term and topic.

• Topic: When you choose a topic, the language that you use does not matter. This is because Google Trends translates the word invisibly in the background. This is particularly useful for exploratory market research that concerns the entire world. In other words, your search transcends linguistic differences. For instance, you can use the English version of the topic 'fad' to compare Google trends for that subject matter among the US, France and Spain in a single search.
• Search term: Unlike 'topics', this element is language-specific. Furthermore, you can distinguish between search terms and topics by how they are visually displayed in results. Specifically, graphs drawn for search terms appear with solid lines while those for topics appear as a dotted line.

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1. Shape of the graph

The shape of the graph is very useful. Notice whether the graph repeats a consistent up-down  pattern predictably within specific time periods. In the example below, the high and low points consistently occur in Feb-April and December respectively. Consequently, the product is seasonal. However, also consider how drastic the changes vary between the high and low points. If you are making decisions about whether a product is suitable for sale, determine its suitability based on whether you can tolerate these seasonalities.

Look at each high and low point to see how much the demand has risen or fallen from one year to the next.

The image below displays a fad. Fad trends peak with a table top shaped plateau that falls away just as sharply like the edge of a cliff as they begin. Consider your goals. If they are long term, fad products are not ideal.

2. Compare the same term across up to 5 countries (or 5 time periods)

Perhaps I could use this information for deciding on where to do a product launch.

Next to the 'Compare' button, click the drop down menu and select the 2nd modifying variable, like 'location'. This will allow you to add up to 5 new locations.

3. Compare the same keyword (product) across several elements / modifying terms (like celebrities, brand names, etc)

Suppose you wanted to do advertising on product X but needed to determine which celebrity can provide the best market response. Google Trends allows you to compare the single keyword across up to 5 modifying keywords.

Be sure to investigate drastic spikes in the graph. They usually relate to some background information that may affect your marketing plans. Investigation into the spick for Rihanna relates to the fight she had with her then boyfriend, Chris Brown. Investigating these outstanding graph behaviors involves holding the cursor over the tip of the spike to see the date of the spike. From there, you can complete your investigation in Google Search. You may find significant trends like this useful for post event tentpole marketing.

4. Find additional keywords that are trending

The top searches were for 'hair products', 'natural hair products' and 'natural hair'. These terms suggest the market searching these terms is comprised of black people. The associated map confirms the strong possibility of this as the top 5 (of 7 countries) have a predominantly black population. TO further confirm this suspicion, the 'Rising' related searches shows 'curly hair products' as the top trending top at a +900% growth rate. When I clicked Trinidad and Tobago, the related topics was headed by 'afro-textured hair'. The 4th topic was 'black hair'.

Ultimately, this tool helps to define the target market.

In fact, you can even narrow the search if you are specifically interested in publishing content for a particular web search platform like YouTube and so on. This is therefore ideal for blogging, Google Shopping  advertisements and so on.

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5. Use Google trends to find which keyword among synonyms to use

Visually compare synonymous keywords. Use this information to change the wording of your topic, product and so on.

In fact, I also used this basic comparison for comparing between terms that were not synonyms. For instance, if I have been researching car tyres and kitchen cupboards, 2 unrelated products, I might be able to decide which between the 2 I will like to sell.

6. Visually compare interest in 2 or more topics / languages / synonyms, etc

To compare interest of the same topic across linguistic markets, do NOT enter different translations into the search terms at once. A better way will be to use the topic as a 'search topic' in the search window at the top of the page. Afterwards, you can choose different countries.

Above, Google Trends was used to look world wide, ie the default setting. Search only within the US. Below, I want to know the level of interest of coconut oil among Spanish and English speaking people only in the US.

Analysis: The results show me that US-based Spanish speakers show a significantly lower level of interest in the product. I can see that interest of Spanish-speaking people is greatest in Florida. The map information below is specifically for Florida. Notice that the blue color coded line (for Spanish) underlines the Spanish words over the map. If you want to see the same information for English, click the English text.

Not surprisingly, when the search was done for only Mexico, the converse occurred. Spanish-speaking market was significantly higher. The Mexico market was at the stage of the purchase funnel where they were still learning about the product. As you can see below, the top search terms enquired about the benefits of the product. Conversely, the US market had top search terms of different oils. One gets the impression that they have already moved further through the sales funnel. BTW, you can also narrow the location search to cities within a country.

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I wanted to know, 'What particular interest do English speaking Americans have for the product in the US'? So I further modified the search to look at 'Beauty' (one of the recommended categories) in the 'Categories' drop down menu and got the following. People are most interested in using the oil for the hair. When I clicked on 'Rising', there were breakout keywords for 'coconut hair masks' and 'coconut oil masks'. This provides more specific insight. The 'Body and face' category still referenced hair masks as the top searches. This is definitely a strong trending search term.

Interest in the oil for the skin and face is considerably lower. Initial suspicions were that the market is from the black demographic. However, this is unclear given the states with the strongest interest.

In the 'Hygiene & Toiletries' category, people might have been even further in the funnel. The top breakout search term was 'best coconut oil' and the top search term was 'organic coconut oil'. That is a far cry from the Spanish speaking market.

An even further modifier is time. I changed the search to the 'past 12 months'. To do this, use the drop down menu at the top of the page.

General Reminders  / Tips 

• If your focus is related to keyword searches for a geographical market, narrow the search by the country / ies in that market. You can later get the corresponding search volume figures in Google Adwords by narrowing the search to that market.

Promulgate your results 

You can share and or download your results. The buttons for these options are on the far right end of the top menu bar.

CONTENT RELATED TO GOOGLE TRENDS FOR MARKETING

• Significant Google trends can inform your tentpole marketing calender