5 Stages of New Product Launch
Learn about the five stages of new product launch and take actionable steps to ensure the successful development of an idea from conception to market launch.
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New Product Development (NPD) is taking a product or service from idea conception to market launch. It sets out a series of stages, beginning with ideation and ending with the product's introduction to the market. To stay successful in the face of maturing products, companies have to introduce new solutions by a carefully executed approach. Out of the thousands of products that enter the development stage, only a handful make it to the market. Therefore, you need to understand consumers, markets, and competitors in order to develop products that deliver value to customers.
“When we create stuff, we do it because we listen to the customer, get their inputs and also throw in what we’d like to see, too. We cook up new products. You never really know if people will love them as much as you do.”
– Steve Jobs, CNBC Interview
This article will explore the various stages of the NPD process for finding and growing new products.
Proof of Concept (POC) vs NPD Process
Proof of concept (POC) is a method realization to demonstrate a product's feasibility. Owing to POC, you can verify that some concept can turn into a viable solution and can prove that the concept or feature is achievable. The regular product development process works on the premise that your idea has gone through some kind of proof. However, the new product development process starts from the very beginning by creating the screening process.
The NPD is designed to help convert new and untested concepts into viable products and market them while allowing you to weed out ideas that are irrelevant or non-feasible. A new product results from the company's steps, starting with the conception of a new idea to its thriving commercial launch.
Stages of the NPD Process
The process starts from Idea Generation and ends with Product Development and Commercialization.
The NPD creation comprises 5 stages:
Stage 1: Idea Generation and Screening
The first stage is the generation of ideas, which is a systematic search for customer pains and market needs to build a new product. Typically, a team generates a vast number of ideas and chooses some of them (after the critical assessment, of course).
The process of eliminating the unfeasible ones and picking the best out of many is a screening process. With this practice, you can take a concept to the next step.
You should consider idea generation through two sources:
- Internal: This is through the company’s in-house research and development (R&D) and brainstorming sessions.
- External: This includes the participation of customers, distributors, suppliers, and competitors. The most important external source is a customer since the NPD must focus on adding value to users foremost.
The subsequent stages aim to eliminate and reduce the number of ideas to a valid and achievable few. The reason behind this practice is to reduce the cost of development.
Stage 2: Concept Development
The next step in the process is to develop chosen ideas into a product concept. It is essential to make a clear distinction between:
- Product idea — a vision for a possible product that you can offer to the market.
- Product concept — a detailed version of the idea stated in meaningful consumer terms.
- Product image — a hypothesis consumers may perceive a new product.
Concept development consists of two practical steps:
Concept Development: It’s an evolution from an idea into a reliable solution. At this stage, the idea grows into a product that a customer can understand and appreciate.
Concept Testing: The new product concepts are tested with target customers and as symbolic or physical mockups.
By using Figma, Mural, or similar solutions, you can present a visual mockup to customers and ask them a few questions to gather feedback.
Stage 3: Product Development
Up to this stage, a product concept is just a mockup. Now, you transform the concept into a workable product. This stage is probably the most expensive. The R&D department tests one or two versions of the product concept. The products developed should go through a battery of tests to ensure they are safe and effective.
Stage 4: Marketing Strategy Testing
You need to design a marketing strategy draft to introduce the digital product to the market. It's okay not to have a clear implementation plan now, but you must have a preliminary understanding of the required steps and promo vision.
Build your marketing efforts on the following sections:
- Market research: a description of the target market, the planned value proposition, market share, competitors, profit goals for the first few years, etc.
- Budgets: an outline of the product plans, pricing, offers, promo expenses, and marketing budget for the first year.
- Channels: content marketing, PR, PPC, SMM, email marketing, and other digital marketing opportunities to use for product promotion, brand awareness increase,
- Long-term: long-term goals, product improvements, and marketing mix strategy, etc.
At this stage, testing is also a must. Owing to testing, you'll have a real-world view of customer acceptability before the product launches fully. You should test the entire marketing strategy, including targeting, position advertising, distributions, and more. When testing marketing consumer products, consider one of these approaches:
Standard tests are based on a small cohort of participants. Use store audits, consumer and distribution surveys to gauge the performance of the product. This approach has two drawbacks: it's money- and time-consuming. Also, you can face interference from competitors. It gives competitors a peek into your new test product, thereby allowing them time to devise a strategy to compete with your product after the full launch.
This approach involves selling the new product in a controlled manner through selective stores. To indicate suitable sellers, you might need the help of consultancy services or conduct your own thorough research. Compared to the standard practice, controlled testing is usually less expensive. The main drawback is an insufficient number of iterations, which can't be a correct representation. The risk of competitors getting an early understanding of your new product is also possible.
In this practice, you display promotions and advertisements of various products, including your new product, to a sample set of consumers. The consumers may be invited to a real or a lab store to buy items. The researchers can then analyze their behavior with your product and how many customers would buy the new product instead of competing brands. It's a good fit for launching a new product within an already existing and high-competitive niche, e.g., smartphones.
Stage 5: Launch
After you established a marketing vision for your new product and analyzed testing outcomes, you have evidential insights about whether to launch their product or not. Foremost, you must decide on the time of launch and a region. It means you must consider a detailed rollout plan.
Regarding time, it's a tricky thing. The pandemic has proved it. The relevant advice is to follow competitors' move: you can avoid launching the product in the same period, or vice versa, launch it closer with a direct competitor almost simultaneously. It may work if the testing stage guaranteed you the feature values of your product.
Regarding the place, you may consider a single location or national/international market. You should decide whether to launch the product in a phased manner or go global at one go. Companies usually develop a planned market rollout schedule over time.
Benefits of the NPD Process
According to Mckinsey Global Institute, only 1 out of 7 ideas result in a successful product. At the same time, Clayton Christensen states that 95% of new products fail. Obviously, it's a tough field to play at. But such statistics don't stop companies from launching new products since there are clear advantages of the process.
The NPD process:
- Creates an environment for innovation to thrive
- Delivers fresh solutions to customers and meets their needs at a quick pace
- Produces niche products where there are few or no competitors
- Responds quickly to market changes such as customer preferences or legal legislation changes
- Increases sales through wider distribution and offerings
- Delivers high-quality products by reducing defects of previous
This post has elucidated the most vital steps of the NPD process and the benefits they can bring to you. Definitely, behind these mentioned five steps, there are people, resources, and failures. But that 5% of success, I bet, will warm your mind to thinking about a new product launch. We hope this overview might help you with the first steps.
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