The process of New Product Planning is the function of most top management personnel and experts drawn from the fields of sales and marketing, research and development, manufacturing, and finance. This group of specialists considers and plan a new and improved set of products in many different phases.
Product planning is one of the most important steps in product production. It involves many decisions to come up with top quality products. These decisions include the development of new products, contraction or expansion of product mix, improvement in the designs and functionality of the product, determination of brand, packing, label, color, size, design, and price, etc.
Developing a product plan helps you in defining your product strategy. A product strategy is how you would make a case for your product. It helps you to gather requirements for producing the required qualitative product. Product planning allows you to assign a broad timeframe for each of your initiatives. Through product planning, you can tailor your roadmap to stakeholders and also share this roadmap of your product.
Every businessman has the idea that productivity is one of the main ingredients for having successful product development. One of the two processes in Robert’s Rules of Innovation is the New Product Development Process. Having a formalized NPD process, also named to as the best practice as the Stage-Gate Process, is essential from going simple to sophisticate.
It is a process developed by Dr. Robert G. Cooper as a result of extensive research on reasons why certain products succeed and why they fail. When teams work together in coming up with innovations, 8 important stages of product planning help in ensuring the success of the product. These important steps will, when mixed into your teams and new product development will make sure the relative marketability will be quick and accurate. These steps will help all of the team members on the board to be productive.
These steps and processes help teams always to design new products that are better than the previous ones and ensure their quality. On the off chance that the company wants to plan a new product, then it is vital to understand everything about the potential consumer base. Knowing this will ensure faster sales of the new product and will also help make ROI fast. Go through the following 8 important steps and make your new products better than all before.
1. Generating Ideas
Generating the First step is all about generating ideas. An idea can be anything that you want your product to be like or what new factors you want to instill in your products. A typical company might be generating millions of new ideas in the quest to find a handful of the best ones. To be able to find new ideas can be as follows.
- Internal Idea Sources
The company looks for new ideas within the internal sources. It will involve R&D and also takes in new ideas from the employees.
- External Idea Sources
This takes in ideas from external sources. This includes all levels of external sources like distributors and suppliers and also the competitors. The essential external source should be your customers as they will be the ones using your products; hence try making them the main source of ideas. This will bring in customer value.
By using basic and external SWOT analyses, and also all of the current marketing trends, there are ways one can distinguish oneself from the competition. This is done by generating ideologies that involve affordability, ROI, and expanded distribution costs in the calculation. This step must be done by keeping three things in mind, i.e., Lean, Mean, and scalable.
During the New Product, Planning process tries keeping the system nimble and bring in use flexible discretion over which all of the activities are executed. In this step, you will have to develop new and multiple versions of your road that are scaled to suit different types and levels of risk in projects.
2. Screening The Ideas
The next step after getting an idea in the New Product Development process is to take the idea into the screening. Idea screening is all about filtering the ideas to grab the best ones out. In other words, all ideas that were generated in the previous step are then screened to spot the best ones and drop the ones that were poor as soon as possible. The purpose of generating ideas was to generate as many ideas as possible, and the purpose of idea screening is to reduce the number of ideas and keep only the ones that are very worthy and useful.
The reason here is that product development costs rise greatly in later steps. Hence the company tries to get into the next step with only those ideas that give the most profitable products. It is essential to dropping poor ideas as soon as possible.
Choosing the beneficial ideas will majorly depend on the company’s values and the criteria that are used to extract better ideas. The key is to stick to these criteria so that the chance of poor ideas can be dropped off in the earliest stages.
3. Testing The Concept
Next in New product planning domes the testing phase of the ideas hence filtered in the previous step. These ideas must now be turned into product concepts. A concept of a product is a detailed version of new ideas that are now stated in meaningful consumer terms. You must be able to distinguish,
- A product idea, i.e., an idea for possible product
- A product concept, i.e., a complete detailed version of the idea put in meaningful consumer terms
- A product image, i.e., the way the customer will perceive the potential and actual product.
In the words of Gaurav Akrani, “Concept testing is done after idea screening,” this step is a lot different from test marketing. The biggest part of testing the concept is to know where the marketing messages will work their very best. In this step, it should be made sure if the consumer will understand, need, or want the service or product that you are thinking to introduce.
NPD process suggests that while testing the concept, it must be tried to get them tested through targeted groups or consumers. These concepts can be presented to target consumers through symbols or in physical form. The main question to keep in mind while going through step 3 is to think whether the consumer will have a strong appeal fro this concept or not? Asking certain questions from the targeted group of consumers who will be checking the concept and noting all their answers to use in bringing changes in the product concept is essential.
4. Business Analytics
The next step in the new product planning process is building up a marketing strategy. After a promising concept has been developed and brought under testing, it is now time to design the initial marketing strategy to let the new products being introduced in the market. The marketing strategy you are developing in this step must have the following three parts,
- A proper description of the target market, the planned value proposition, and sales, profit goals, and market share for the first few initial years,
- An outline of the planned price of the product, distribution, and marketing budget for only the first year at the moment.
- The planned long term sales, marketing mix strategy, and profit goals.
Building a system of metrics will help you monitor your progress in later steps. You should include input metrics, the, i.e., average time in every step, and also the output metrics that include the value of launched products, and other figures through which you can get valuable feedback. The organization must all be in agreement with these criteria and metrics. If an idea does not turn into a product at the moment, then don’t discard it. Keep it in-store as it can prove to be a valuable asset in the future and help in learning and growing.
5. Beta/ Marketability Tests
Once you have finalized the product concept and have a marketing strategy, the management can now proceed with the business attractiveness of the new product. This step involves reviewing sales, costs, and profit projections of the new product in the pipeline. It is also measured in these factors are satisfying the company’s objectives. And if they do, then the product can be moved into the development stage.
To estimate sales, the company can have a look at the sales history of products that are similar to the one being produced. Conducting a market survey is also beneficial to estimate sales. To find the range of risk, the minimum and maximum sales can be used.
Have an arrangement of private tests groups, launch beta versions and then form test panels once the products have been tested, this will provide you with important information to help you with adding last-minute improvements and tweaks. It will also help you generate a little amount of buzz. WordPress has become a main in beta testing, and it has been effective since. Many programmers pay their services in code, millions of them test it, and finally, even more, people download the end product.
6. Product Development
Now in this step of new product planning, the actual development of the product can be started. At this point, many new product concepts may only be in the form of a word description, a drawing, or even a prototype. But once the product concept goes by the business test, it gets into the development stage and happens to come in a real product form. This is to make sure that the concept can take the form of a workable market offering. At this stage, the issue is that R&D and other engineering costs bring in a huge jump in the investment.
The R&D department will develop and also test one or more physical forms of the product concept. Having a successful prototype built can take a time of up to several days, weeks, months, and even years based on the product and prototype methods.
The products at this stage often go through tests to ensure they carry out all the functions safely and effectively. This can be done within the firm or outside it. In the product testing phase, many marketers involve actual end-users of the product. Consumers involved in the testing phase evaluate prototypes and also work with pre-releases products. Consumer’s experiences can prove to be of high importance in the product development stage.
7. Test Marketing
Test marketing is the only stage left before commercialization in planning for a new product. During this stage of NPD, the product and its related marketing program are tested in real market surroundings. The test marketing allows the marketer to experience marketing the new product before it enters the great expenditure of full introduction. In reality, it allows the company to be able to test the product and the whole of its marketing program. It includes targeting, and positioning strategy, distributors, advertising, packaging, etc. well before a full investment is made.
Test marketing has allowed management to have the information needed to make a final decision. This decision is about whether the product is okay to be launched or not. The final stage in the new product planning process is commercialization. Commercialization means nothing much than introducing a new product to the market. This point involves the highest costs. This point may require the company to build or rent a manufacturing facility. A huge amount of cost may be spent on advertising, promotion, sales, and other marketing efforts during the first year.
Some of the factors that must be considered before product commercialization are,
- Introduction timing
- Introduction place
All of these steps of the new product planning process have one top focus, and that is to ensure the creation of superior customer value. Only this factor can ensure the success of the product in the market. A company must also know that only a very few products have the chance to become a success. The risk and costs are too high to let every product pass the stages of the new product planning process.