Before a product is launched into the market there are several stages that it has to go through.
A new product development process starts with the search for ideas. A pool of new product idea is generated in the hope that at least one or a few of them will be developed into a successful product or service. Top management should;
- Define the product and markets to emphasize on.
- State the new products objectives.
- State the amount of effort to devote in developing original products, modifying the existing ones and imitating competitors’ products.
Sources of new product ideas can be derived from many sources including;
- Top Management
- Advertising agencies
- Marketing research firms
- Company sales people and dealers
The purpose of idea screening is too reduce the number of ideas and drop poor ideas as early as possible. This is the first phase of idea evaluation and pruning. In this stage a company must avoid
A Go Error
This occurs when a company permit a bad idea to move into product development and commercialization.
A Drop Error
This occurs when a company dismisses an otherwise good idea.
Concept Development and Resting.
In this stage the management tries to find a good concept for the product that consumers would like to try. Attractive ideas are refined into testable product concepts.
After testing the new product, the Manager must develop a preliminary marketing strategy plan for introducing the new product into the market. The plan consists of three parts.
- The first part describes the target market’s size, structure the planned product positioning, market share, and profit goals sought in the first few years.
- The second part outlines the planned price, distribution strategy and marketing budget for the first year.
- The third part describes the long-term sales and profit, goals and marketing mix strategy over time. This stage is therefore concerned with finding a cost effective and affordable marketing strategy.
In this stage future sales, profits and the rate of return for the proposed new product are projected. They also assess whether they are in line with the company’s objectives.
In this stage the product is developed and the company finds out whether the product is technically feasible. Weak spots are rectified where possible. Problems of brand naming and packaging are also faced and resolved.
This entails introducing the product in a small scale and in pre-selected environments. This is where the company gets to know whether the product will succeed or not.
Market testing gives the management enough information to make a final decision about whether to launch the new product. In commercialization the company faces the largest cost in building or renting a full scale manufacturing facility, advertising, promotion and distribution.