New product development 319
Once the general direction for NPD has been
set, the process of developing new ideas,
discussed below, can become more focused.
Idea generation
This is a misleading term because, in many
companies, ideas do not have to be ‘generated’.
They do, however, need to be managed. This
involves identifying sources of ideas and devel-
oping means by which these sources can be
activated to bring new ideas for products and
services to the fore. The aim of this stage in the
process is to develop a bank of ideas that fall
within the parameters set by ‘new product
strategy’. Sources of new product ideas exist
both within and outside the firm. Inside the
company, technical departments such as
research and development, design and engi-
neering work on developing applications and
technologies which will be translated into new
product ideas. Equally, commercial functions
such as sales and marketing will be exposed to
ideas from customers and competitors. Other-
wise, many company employees may have
useful ideas: service mechanics, customer rela-
tions, manufacturing and warehouse employees
are continually exposed to ‘product problems’
which can be translated into new product ideas.
Outside the company, competitors, customers,
distributors, inventors and universities are fer-
tile repositories of information from which new
product ideas come. Both sources, however,
may have to be organized in such a way as to
extract ideas. In short, the sources have to be
activated. A myriad of techniques may be used to
activate sources of new ideas, including brain-
storming, morphological analysis, perceptual
mapping and scenario planning.
Once a bank of ideas has been built, work
can begin on selecting those that are most
promising for further development.
Screening
The next stage in the product development
process involves an initial assessment of the
extent of demand for the ideas generated and of
the capability the company has to make the
product. At this, the first of several evaluative
stages, only a rough assessment can be made of
an idea, which will not yet be expressed in
terms of design, materials, features or price.
Internal company opinion will be canvassed
from R&D, sales, marketing, finance and pro-
duction to assess whether the idea has poten-
tial, is practical, would fit a market demand,
could be produced by existing plants, and to
estimate the payback period. The net result of
this stage is a body of ideas which are accept-
able for further development. Checklists and
forms have been devised to facilitate this
process, requiring managers to make ‘guesti-
mates’ regarding potential market size, prob-
able competition, and likely product costs,
prices and revenues. However, as at this stage
of the process managers are still dealing with
ideas, it is unrealistic to imagine that these
‘guestimates’ can be accurate. The ‘newer’ the
new product, the more guesswork there will be
in these screening checks. It is not until the idea
is developed into a concept (see below) that
more accurate data on market potential and
makeability can be assembled.Concept development and testing
Once screened, an idea is turned into a more
clearly specified concept, and testing this con-
cept begins for its fit with company capability
and its fulfilment of customer expectations.
Developing the concept from the idea requires
that a decision be made on the content and
form of the idea.
This, however, is easier said than done; the
process of turning a new product idea into a
fully worked out new product concept is not
simply one of semantic labelling. Montoya-
Weiss and O’Driscoll (2000) explain that ‘an
idea is defined as the initial, most embryonic
form of new product or service idea – typically
a one-line description accompanied by a high-
level technical diagram. A concept, on the other
hand, is defined as a form, technology plus a