|Development Process of New Product|
1. Idea generation
- Internal sources: The sources which remain under control of company are called internal sources. Such sources also can generate ideas. Specially, sales forces, managers, engineers, planning department, board of directors, research department etc. are internal sources. The force involved in sale of products or services is called sales force. This is also one of the sources of idea generation. Dealers, agents, retailers etc. are included in this source. Useful ideas can also be obtained from these sources to develop new products.
- External sources: Business Company or firm can collect ideas from external sources. After ideas have been collected, the best among the ideas should be selected considering customers’ wants, interests, needs etc. Customers, organizations, technical publications, advertising agencies, competitors, suppliers, universities etc. are included in external sources. In order to develop new goods, it is also equally necessary to generate ideas from collecting ideas from external sources. Ideas can be collected also from government agencies. The ideas got from government agencies may be very useful for the business firm.
2. Idea screening
- Prominent ideas: As such ideas become very important, they should correctly and properly evaluated.
- Marginal ideas: Such ideas may be useful to the company in future. So, they should be kept stored for future.
- Reject ideas: If some ideas are not possible to be useful to the company, such ideas should be discarded/ rejected.
3. Business analysis
- Estimated sales,
- Features of the product,
- Competition of the market,
- Expected rate of return and profitability,
- Estimated cost,
4. Product development
- Functional testing: Under this quality, size, durability feature etc. of the product are tested. This type of testing provides certainty about secure functioning and effectiveness of the product.
- Consumers testing: For testing the consumers, sample of the new product should be distributed to the target consumers, and reaction of the consumers should be collected. This test is called consumer testing. Consumers interest, want, needs consumers’ need etc. are tested under this testing.
5. Test marketing
- Timing: Time should be given importance while taking any decision. New products should be brought to market in proper time. If product is supplied to market is wrong time, it cannot give expected return. If timing is not properly considered, commercialization program cannot get success.
- Place: While commercializing a new product, proper place decision should be made. One of the best alternatives from the available geographical area/ place should be selected. If wrong place is selected, distribution cost may go high due to which there arises difficulty in market competition.
- Market segmentation: New products may be useful for many geographical segments. Among them only the best segments should be selected. This task is called market segmentation decision. So, any one or more market segments should be selected by considering the popularity and utility of the new products.
- Strategy: Strategy should be formed by studying the ability/ capacity and competition of market. Proper short term strategy should be adopted to supply new products to market according to the same strategy which can help new product hold the market.