Are you looking to develop a new product? Whether it’s a completely new idea or an improvement on an existing product, the process can be challenging. However, the rewards of successful new product development can be significant.
To achieve success, it’s important to focus on product discovery and address the pain points of your target audience. This means gathering customer insights through surveys, interviews, social media monitoring, and ethnographic research. Additionally, product discovery should be an ongoing process throughout the product’s lifetime, from idea generation to post-launch. In this article, we will provide a detailed walkthrough of the new product development stages to help you turn your ideas into workable products.
What is New Product Development (NPD)?
New Product Development (NPD) is the process of transforming an idea into a feasible software product that meets customers’ needs. The NPD process involves identifying market opportunities, assessing the idea’s feasibility, and delivering a functional software product.
In contrast, Product Development is a broader term that encompasses the six stages of the software development lifecycle. It focuses on launching products that already have a Proof of Concept (POC). The NPD approach, on the other hand, centers on entirely new ideas, where the uncertainty around development and adoption is high.
Successful examples of NPD include Trello for task management and tracking, Zoom for video communication, Dropbox for cloud storage, Figma for remote design work, Airtable for relational data management, and more.
The NPD process consists of several stages, including idea generation, idea screening, concept development and testing, business analysis, product development, and market testing. Each stage is critical to the success of the NPD process and requires careful attention to detail.
Seven Stages of New Product Life Cycle Development Process
Stage 1: Idea Generation
To create a successful New Product Development strategy, a company must generate many ideas that can form the foundation of their product. The focus of this stage is to arrange brainstorming sessions where customer problems are given priority. The goal is not to generate foolproof ideas but to discuss raw and unproven ideas that can be shortlisted later.
1. Emphasize on Customer Problems
To identify the issues that the target audience is facing, a company should look at personal problems and understand the human story behind digital offerings. The feasibility of the shortlisted problems and their solutions should be checked based on the 4U approach by Michael Skok, the founder of Startup Secrets. If a problem has been identified, it’s time to look for possible solutions. For every user problem, there ought to be potential New Product Development opportunities. A comparison chart that lists all the shortlisted problems and solutions should be created, and the findings should be circulated across the organizational structure to develop a viable problem set.
2. Qualify Each of the Listed Problems
The 4U approach by Michael Skok stands for Unworkable, Unavoidable, Urgent, and Underserved. Taking a deeper look at each of these aspects in detail will provide greater clarity.
3. Coming Up With Possible Solutions
For every user problem, there ought to be potential New Product Development opportunities. The workflow starts with a problem and ends with strategizing around the solution. The solution should be unique, even if a product already exists, and the product should solve problems differently.
4. Narrowing Down Problems + Solutions
If the stakeholders are not convinced regarding the shortlisted idea, try the Replicate, Re-Purpose, and Upgrade approach.
Stage 2: Idea Screening
This stage revolves around choosing the one idea with the highest potential for success. Put all the ideas available on the table for internal review. A proof of concept (POC) should hold precedence for a new product development idea as it helps check the idea’s feasibility. SWOT analysis can be another good practice to consider when shortlisting New Product Development ideas.
Stage 3: Concept Development & Testing
Before starting the New Product Development process, building a detailed version of the idea and the user stories should be prioritized. This value proposition evaluation is the first step towards concept development and testing. The easy-to-follow concept development steps include:
1. Quantifying Gain/Pain Ratio
A business needs to create an insightful picture of the product from the user’s perspective. This can be achieved by calculating the gain/pain ratio.
2. Conducting a Competitor Analysis
Knowing about existing market players is a critical strategic step to consider. Understanding the competition makes it easier to infer where the competitor lacks, where is the scope for improvement, and existing white space in the market.
3. Enlisting the Major Product Features
The user stories involved in the New Product Development software project will make or break a business. When creating a list of such features, it is imperative to know how is it an innovative feature, and how is it going to solve a problem?
4. Create a Value Proposition Chart
Even if a product already exists, it should solve problems differently. A value proposition chart can help a business create a unique selling point.
5. Concept Testing
Before launching the product, it is essential to test the concept. The testing process should involve a small group of people who will provide feedback.
Stage 4: Market Strategy/Business Analysis
This stage involves developing a market strategy and analyzing the business. The cost-based pricing model and market-focused pricing are two pricing models that a business can use.
1. Cost-Based Pricing Model
The cost-based pricing model involves adding a profit margin to the cost of producing a product.
2. Market-Focused Pricing
Market-focused pricing involves analyzing the market and setting a price based on what the market is willing to pay.
Stage 5: Product Development
This stage involves developing the product. A prototype and minimum viable product (MVP) should be created.
A prototype is a preliminary model of the product.
2. Minimum Viable Product (MVP)
An MVP is a product with just enough features to satisfy early customers and provide feedback for future product development.
Stage 6: Deployment
This stage involves deploying the product.
Stage 7: Market Entry/Commercialization
This stage involves marketing the concept over the product, having a brand voice, and conducting intriguing webinars.
Benefits of Implementing the New Product Development Process
Following the New Product Development process has several advantages. It helps in evaluating the technical feasibility of the idea, ensuring faster time-to-market, addressing customer needs, and increasing the chances of success. Moreover, it reduces technical debt and effectively manages feature creep, negating the opportunity cost.
Frequently Asked Questions
If you’re considering new product development, you may have some questions about the process. Here are some of the most frequently asked questions and their answers:
What is the Purpose of New Product Development?
The purpose of new product development is to create products that solve real customer problems, which can help an organization achieve organic growth. Some reasons for considering new product development include meeting changing consumer needs, launching a product in a new market, maintaining a competitive edge, introducing a product based on a disruptive technology, solving a unique customer problem, or solving a common customer problem in a unique way.
How Can I Come Up with New Product Development Ideas?
Finding the right idea for new product development can be challenging, but there are some tried and tested ways for coming up with ideas. These include surveying customers to understand their problems, identifying internal or personal problems that you can solve, experimenting with new, disruptive technologies, or looking for problems that customers face with an existing product serving the same niche.
What are the Different Types of New Product Development?
There are four types of new product development, which include disruptive, radical, sustaining, and incremental. Disruptive new product development involves creating a new product that disrupts an existing market. Radical new product development involves creating a new product that is significantly different from existing products. Sustaining new product development involves creating new products that improve upon existing products. Incremental new product development involves making small improvements to existing products.