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New Product Development

What is New Product Development?

New Product Development (NPD) is the act of creating a new commodity or product for the commercial marketplace. It is essentially a series of steps that are taken from inception to roll out which see a new product designed, manufactured, and unveiled to the world.

NPD is an important activity for most companies. It is a means by which companies can stay ahead of their competitors, provide added value to their customers, and increase organic growth.

New products provide an opportunity for companies to sell more units and therefore increase revenue streams. NPD activity also allows companies to grow their market shares.

Technical Product Design Drawings

In a world where there is strong consumer demand, greater competition, and where changing digital and technological advancements are emerging all the time, it is important for companies to keep driving forward and developing their product range. Standing still in this environment will likely lead to rival companies gaining competitive advantage.

Fast-moving change has become an accepted – and expected – part of consumer culture. Customers of all types in all different industries have an expectation for companies to adapt and evolve, and for their product range to develop in a manner which reflects these rapidly changing times.

New products are designed to either solve an existing customer problem in a new or innovative way, or to enhance or move forward a similar product which is already out there in the marketplace in a much more rudimentary format.

The product development process is multi-layered and involves many internal and external stakeholders. As noted above, it involves several different steps, or stages.

Let’s look at these stages in more detail….

Product Designers Exchanging Ideas

The Key Stages of New Product Development

Idea Generation

All new products start life in the same way – as a concept or idea. Each product is the brainchild of an individual or group of individuals.

The process usually involves a brainstorming session between product designers and product engineers. It may also include other stakeholders, such as marketing experts.

At this stage of the process, ideas are discussed and explored, with the relative merits of each being assessed before the optimum concept is identified for further development.

If done correctly, the idea generation phase should be the consequence of detailed research which has already been conducted to identify what gaps exist in the current market for NPD, and what problems any potential new product should be introduced to solve.


Once the idea generation phase of the process has been completed, the Research phase begins.

By this point, a product idea will have been formed. The next step will be to further develop this idea by testing its likely suitability for the current marketplace.

To do this, research must be conducted. This research can take many different forms and can comprise either market research (where a sample of the target market is selected to answer questions on their consumer habits and tastes) or competitor analysis to determine how to potentially position this new product in relation to the competitors’ offerings.

This stage of the process also provides an opportunity to gain feedback from target consumers on what they think of your ideas before you advance too far down the road of developing your new product.


This is where the information collected in the previous stage is reviewed against the original concept, and any changes to the idea based upon the feedback provided are implemented.

At this stage in the process, the strategic goals and objectives for the product can be reviewed and finalised, and the overall concept can be refined to reflect these milestones.

The estimated product value and capacity can also be determined.

As soon as the concept has been clearly defined, the next step of the planning phase will be to source suitable manufacturing partners to help to take the project forward.

It is also where marketing professionals, either in-house or commissioned from outside of the organisation, will have to start thinking about how to successfully bring this new product to market once it is ready to launch.


The prototyping phase is where a physical prototype of the product is created with the help of whichever manufacturing partner/s has been chosen during the planning stage.

It is essentially a to-scale basic version of the product.

The prototype will help product designers and product engineers to understand how the product functions and looks in its true physical format.

Prototype Design for Automotive

Prototyping is a very important phase in the product development cycle. No matter how impressive the product concept might be, or how meticulous the planning, the prototyping phase will often unearth several key aspects of the design which have not necessarily been accounted for in the theoretical planning stages.

It also allows manufacturing partners to find solutions to complex manufacturing challenges before full scale production begins. It is important to go through this process so that the best solution for the manufacture of the product can be decided upon before producing the product at volume.

Consumer Testing

This is where consumers are invited to test the prototype and to provide feedback on its functionality, appearance, and positioning within the current marketplace.

The testing phase is essential in order to assess the commercial viability of the product and as a way of identifying any prototyping issues that may need to be ironed out before launch.

Product Developers Examining Plastic Prototype

Often, the results of this feedback will mean that changes need to be made to the prototype to reflect consumer opinion.

It may be necessary to go back and forth between the prototype and the testing phases, making multiple changes and conducting several stages of consumer testing in order to get the final prototype absolutely right.

As soon as the prototype is produced in a form that consumers and product engineers are happy with, full-scale product development can begin.

Product Development

As soon as the prototype phase is concluded, a final cost analysis will be conducted to determine the commercial feasibility of producing the finished prototype at volume.

An original cost analysis should have been conducted before now, most likely at the research or planning stages, but a final analysis will also be needed if there have been any changes to the prototype since those preliminary calculations were made.

Providing the numbers still add up, full scale production can commence.

The production process will be carried out by the manufacturing partner identified at the planning stage. This can be the same production company who produced the prototype or a different one.

If costs prove to be prohibitive, or if a suitable prototype which meets the original objectives cannot be produced within the accepted cost parameters, the project may be abandoned.


At this stage of the process, the final product will have been produced and will be ready for the marketplace. Before it can be made available to the public, the branding of the product will need to be concluded.

This includes the development of the brand name, product slogan, packaging, price points, and the marketing message behind the product.

Marketers will also seek to position the product in the optimum space relative to its competitors. If it is a product which will be sold directly to the consumer, agreements with distributors such as retail outlets may also need to be finalised at this stage of the process.

New Product Development Branding

Product Launch

This is the stage of the process where the product enters the public domain. The product development team has completed their work, and the exciting moment has arrived. It is also the phase of NPD which is known as the commercialisation phase, or the market launch.

At this stage, the product becomes available for purchase. The marketing strategy supports the sales of this new product, helping to raise awareness and create interest amongst the target demographic.

This is the stage of the process where the product takes on a new life of its own, independent of its creators and manufacturing partners.

It is also the first stage of the process where the product can start to deliver sales revenue, and a financial return can be enjoyed. This is where the company can begin to recoup some of the money invested in the product’s development, with new gains compensating for the expenditure incurred in getting the product to market.


Post-Launch Review

As with any big commercial undertaking, it is important once the work has concluded to review the process in full. This review should include each of the key players, including the product designers, product engineers and marketing specialists, to determine what was successful and what wasn’t.

In the fast-moving pace of modern business life, this is the stage of NPD which is either usually forgotten or neglected. But it is an essential element of the wider process.

NPD can be an expensive and time-consuming process. It is also central to the success of the company since the new products which are launched are crucial to achieving success for the organisation in the many months and years ahead. If mistakes have been made, it is important that these mistakes are not repeated when the next new product is launched.

Too many mistakes over a long period of time can end up harming the quality of the final output. If products are sub-standard when they are launched, or positioned incorrectly, they will not achieve the sales targets that have been set for them, resulting in reduced revenues and costly expenses. This can have a detrimental affect on company growth and performance, and can also mean that competitive advantage, as well as market share, is lost.

Identifying mistakes in the process and implementing this feedback into the product development process will ensure that future new products are given the best chance to succeed and flourish in the increasingly competitive marketplaces of the 21st century.

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