In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.
There are a number of risks and challenges faced by organizations while they are developing new products, some of which are: - Failure of the new product development process
- Failure of the product at the testing stage.
- Problems in market acceptance.
- Unsuccessful launch of the new product.
The firm can mitigate these risks and challenges by Investing in appropriate R & D practices, developing products according to demands and requirements of the market and investing appropriately in marketing and promotion of the product.
New product development can stress an organization. Change brings conflict!
To manage stress involve other departments in the decision. Sales will eventually have to sell it, manufacturing make it and logistics ship it. So periodic meetings can keep everyone up to date and limit surprises.
Many new products fail. To minimize this possibility companies need to make sure their new product matches well with their customers needs. If the product benefits are matched by another in the marketplace, what incentive to customers have to switch.
Some products fail because the market is too small. Again good market research can help solve this problem. Companies can perform economic analysis to see if the market will generate sufficient profits to make it worthwhile to pursue.
The Seven Sins of New Product Development
company become seduced by the power of the dark side of new products. And from this experience we’ve seen seven common mistakes that even the best companies make when developing new products; or as we lovingly call them, the Seven Deadly Sins of New Product development. Pride – Not knowing your brand and its limitations. .
Successful new products, like successful brands, are both relevant in some urgent way to the consumer and meaningfully different from the competition. Like everything else you do, your new products are more likely to be successful when they’re built on your brand promise. Sure, with enough money, Frito Lay could acquire the technology to manufacture and sell computer chips under the Lay’s brand name. But Lay’s core brand essence – flavor, crispness, and fun – doesn’t translate well to the computer-chip business, the essence of which is speed, accuracy and reliability. Does that mean your company can never enter new markets? No, but you may have to adopt a different brand strategy. When Toyota wanted to crack the luxury-car market in the early ‘80s, they had to create a new brand, Lexus, because research revealed that people would not pay $45,000 for a Toyota. The Toyota brand promise didn’t stretch that far. Envy – Copycat innovation.
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