The new product development process sets out eight phases for introducing products:

1. Idea generation: Idea generation is the phase in which ideas for new products are created. Although some ideas for new products are found purely by chance, most are the result of a systematic approach. The approach should be open to ideas from internal sources (employed scientists, engineers, marketers and so on) and external sources (customers, competitors and partners). Techniques specifically aimed at generating ideas, such as brainstorming and focus groups, are also a worthwhile investment. Of course, only a very small proportion of new product ideas become part of the organisation’s product mix.

2. Screening: No organisation has sufficient resources to pursue every product idea. Even if it was possible, it would not be a good approach to business. Instead, the organisation must undertake a screening process to eliminate those ideas that are not feasible, and to help identify the most promising of those that are. Screening may involve analysing the organisation’s ability to produce the product, the target markets’ potential interest, the market size, the product cost, the break-even point, and so on. Any product idea that does not do well at this stage should be rejected. Screening is also an appropriate time for market research to look for what can best differentiate the product.

3. Concept evaluation: Once a new product idea has passed the screening phase, it should be more thoroughly tested. The idea should be developed into a product concept that customers, management and other stakeholders can evaluate. The product concept is usually presented to potential customers as a description or drawing of various options for the product. This process is designed to determine whether the product could satisfy a customer need or want and to identify those attributes that could provide the most value to potential customers.

4. Marketing strategy: A positive concept evaluation would suggest there is a market for the product. On this basis, management can start planning a marketing strategy. This includes describing the projected sales and profits, market positioning, potential target market, marketing mix strategies, and the long-term goals.

5. Business analysis: Once the marketing strategy has been planned, the organisation should undertake a business analysis to determine whether the strategy will be a good fit with the company’s current offerings and its overall business objectives. A business analysis reviews how the new product will affect the organisation’s costs, sales and profit projections.

6. Product development: If the business analysis finds the new product to be a good fit with the business’s overall objectives, the next stage is to

convert the product concept into an actual product. This often means developing a working prototype, along with additional investment in research and development to ensure the design, materials and so on will result in the optimum product.

7. Test marketing: Once a prototype has been produced, the product should be tested in a market setting. Test marketing activities enable a ‘real world’ assessment of the entire marketing mix that supports the product. This is an important step before proceeding with full commercialisation. It is better to work out any problems with the marketing mix in a smaller test market than to need to take corrective action nationwide.

8. Commercialisation: If all has gone well for the previous phases, it is time to launch the new product in to the market. Costs will be high at this stage, but, if the new product development process has been thorough, there is a solid chance that the new product will succeed.