NPD processes take many shapes and forms. It is vital that any process
is driven by an overall NPD strategy, otherwise development activities
will lack co-ordination and focus. This concept is expanded upon later in
the chapter.
Stages commonly found in an NPD process include:
1 Idea generation
New product ideas have to come from somewhere. This may be through
a formalised technical research and development process or from sys-
tems that scan the business environment, enabling the organisation to
identify trends, customer requests and competitors’ intentions. Market
research certainly has a role to play in this process. Equally, manage-
ment needs to encourage staff to suggest product development ideas
and have systems to enable and reward such activity.
2 Idea evaluation
Next, ideas must be screened in order to establish what is feasible and
where opportunities exist. Ideally, ideas are screened against strategic
objectives by demonstrating how they are likely to contribute to such
objectives. It is important to establish criteria against which all ideas
are evaluated. This provides a consistent approach to decision making
and the safeguard of rigorous testing. Evaluation is likely to include
marketing and operational/production criteria.
3 Concept development
Having passed through a screen process, ideas are developed into prod-
uct concepts. This stage involves initial technical and marketing evalua-
tions. Having established the technical/operational feasibility and
resource requirements, marketing (often using secondary data – general
industry trends, key competitor profiles, etc.) evaluates the potential for
the product. A marketing strategy needs to be outlined – target seg-
ment(s), product positioning and marketing goals, such as market share.
4 Business evaluation
The aim is to evaluate commercial potential and investment require-
ments. Sales volume, revenue and cost projections will establish the
viability of the project. Clearly, this is more difficult when dealing with
diversification or highly innovative products. Often organisations
have predetermined returns on investment, which projects must
demonstrate they will meet.
5 Product development
This stage turns the concept into an actual product. The stage tends to be
dominated by technical and operational development. There is a need to
examine both the development of the product (e.g. styling, features, per-
formance, branding, etc.) and the means of its production/delivery (e.g.
manufacturing, administration, after-sales support, etc.). The stage may
see the building of a prototype and the use of market research to estab-
lish the final product offering. To gauge market place reaction, products
may be test marketed with groups of actual consumers.
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