1. Idea Generation
The process of developing a new product starts with an idea or concept. Where do new ideas come from? They can come from employees, vendors, current and potential customers, management, competitors, and yes, family and friends.
ACTION: The Product Development Team must have and / or create a system to capture all ideas and assess concepts based on company interests.
2. Filtering Ideas
Step 2 is filtering ideas. This step is part of the process for filtering “yes” and “no”. This process is important to reduce concepts and choose what is appropriate. This process can take several days or weeks, depending on the company and approval review. The concept chosen was what the company felt would turn into a profitable service or product.
ACTION: What happens to unselected concepts? They must be saved for possible future opportunities. The company must not discard ideas; they might be valuable later or for future customers.
3. Concept Development and Testing
“Yes” products move to the development and testing phase. What is the target market, this will determine what concepts are developed and tested.
– Developing concepts:
For example, if the concept is a widget – your single target market; married couple; seniors, etc. If not identified, it will be difficult to test and present your business case.
The concept must be decided to be meaningful. In the next sub-step, the concept is tested.
– Test the concept:
To test, your target customers must be identified. Potential customers can test various concepts, product images, physical product tests, and product usage. During testing, several questions must be asked; including – are there consumer needs or wants?
ACTION: Know the needs of your customers to get accurate test results from the product.
4. Development of Marketing Strategies
Step 4 is where the team will design a marketing strategy to introduce the product / service to the market. The marketing strategy must be carefully thought out and will work with other teams on costs, resources, and timelines:
- Who is the target market, expected sales and market share and estimated return on investment / return for 1-5 years.
- Short-term plans for products / services – prices (several financial models can be made for price tests), budgets (including research, launch costs, staff costs) for the first year.
- Long term for products / services – sales, profit expectations, and the possibility of going out.
ACTION: Make short and long term plans.