1.) Idea generation
2.) Idea screening
3.) Concept testing
4.) Business analysis
5.) Product development
6.) Test marketing
7.) Commercialization
1.) Idea generation
It is the first step in the new product development process. A new idea can be generated by an individual or by a group of people. This new idea can be more than one but has to choose what is best. These new ideas can be generated from own understanding or by taking feedback, conducting surveys, and going through the competitor’s product, etc.
2.) Idea screening
The product idea should be studied and investigated properly before introducing it into the market. If there are numbers of ideas then rank them in ascending order according to their importance. It helps to remove those ideas which are less attractive or choose the most effective for further review.
3.) Concept testing
In this step, concept testing of the selected idea is done. The company select a random group of people for testing. Now the new product idea discusses with this group of people, and they are asked to share their liking and disliking. If the majority is in favor of the product, then further steps are to be taken.
Company finds that
1.) Whether the consumers understand the product idea or not?
2.) Whether the consumer needs the new product or not?
3.) Whether the consumers will accept the product or not?
4.) Business analysis
In this step of development company makes a depth study. Here the company study that whether the product is financially viable or not. The company analyzed the Product demand, cost, competitiveness, profitability, expected sales, etc. If the product justifies all the criteria, then it will be accepted otherwise, it will be rejected.
5.) Product development
At this stage, the actual manufacture of a new product takes place. Its other aspects like financing, marketing, and distribution, and promotion begins. A specific price of the product is determined by considering the cost of research, cost of production, level of competition, etc. However, initially, a small quantity is produced as a test batch.
6.) Test marketing
It means to introduce the product on a small scale, to judge that how customers react to the product. Whether they purchase it or not. If the test becomes successful then production starts on a large scale. If the test fails, then the company finds out the shortcomings. If the product fails again in the market, then the company can reject the product.
7.) Commercialization
As we discussed in the earlier step that if the product gets successful in the test marketing, then the company started its production on large scale. The company makes a large investment in the production of the product, distribution, marketing, etc. The company must monitor the performance of the product continuously and make necessary changes if required.
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