Constant and fast change is the one dominant characteristic of today's scenario. If a business sticks with its existing portfolio, even the most aggressive product marketing won't help it to keep up with competitors who are bringing newer and better products into the market.
The New Product Development Process
New products start out as ideas. The first task of companies that want to bring out new products on a regular basis is to create an environment that generates plenty of new ideas. These ideas come from existing customers, employees, vendors, suppliers and other stakeholders. It is an open culture of innovation and appropriate communication processes that encourage these stakeholders to come up with the ideas.
While ideas are encouraged, not all ideas are accepted. Instead, they are screened to check whether the resulting products will be a good fit with the existing product line, core competencies of the organization and the distribution channels in place. Branching out into a new product line will usually mean creating new distribution channels and marketing strategies. This will be equivalent to creating a new business, and not just a new product.
Even after a product concept has been initiated after the screening, several more tasks remain before product development can begin in earnest:
- The technical feasibility of producing the product at acceptable costs must be examined
- Availability of a market not only for the product but also the price at which it will need to be sold will have to be researched
- If investment in new equipment and facilities will be required, the return that the investment will produce will have to be calculated
- The financial implications of the new product development exercise will have to be estimated and its feasibility assessed
The market research will also identify the performance levels expected from the product and the cost for achieving these performance standards is what the business has to factor in.
Once the basic feasibility has been established, emphasis shifts to thinking about creating a competitive advantage. This is usually achieved by finding a unique niche that differentiates the product from those of competitors and positioning it in that niche through all marketing communications.
Product Development Management
It will be clear from the description of the process above that new product development is something that requires:
- Coordinating the work of several functional departments, such as marketing, design, engineering, production and sales
- Keeping identified customer requirements in mind and ensuring that this requirement is not lost sight of at any of the development phases involved
- Timely completion of the product development exercise so that it can be launched in the market before competitors gain a foothold first
These are tasks that need the CEO or other senior level executive who can champion the campaign and ensure its satisfactory conclusion. There will inevitably be many obstacles along during the process and only a senior executive with sufficient influence can handle these.
Product Launch Plan
Launching your new product requires careful planning. Marketing campaigns must be designed to reach all the desired target groups. Different marketing communications, such as product literature, press releases, sales presentations, stocking the products with distributors and all the other incidentals must be consistent and synchronized to support each other.
The business has also to see that distribution arrangements are in place to meet the expected demand created as a result of the marketing campaigns. This will involve checking whether existing distribution channels can handle the new product. For example, a distribution channel that distributes your B2B products might not be equipped to handle a new consumer product that will be sold to the final consumer.
New product development is a key task for businesses that hope to remain competitive in a fast changing environment. This involves creating a culture that encourages innovation and ideas generation, and translating those ideas through design and engineering into a marketable product with speed. Product development must be followed by careful planning to get it successfully into the market.
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