New product planning and development is the process which starts from the idea and ends with the introduction of the product for sales on the market. This research paper demonstrates the whole process of the implementation of a new product. It tells about main concepts and factors that could impact on the manufacture process.
Today the planning and development of the new products is essential part of the business growth and competitive strategy for the company. Companies that would like to be successful and competitive on the market should encourage their leaders to come up with ideas for new products. It will provide new perspectives for the company and will expand the company's sales. However, successful leaders know that this task has to be done with great precision and accuracy, because many new products that are developing by different companies fail to become bestsellers. Additionally, it is difficult to have the clear vision about product demand on the market. A new product will be successful on the market, if it successfully comes through product planning and development.
Two stages of new product planning and development
A new product development for business purposes is the process of developing a new product with its subsequent sale on the market. In turn, the product is a set of benefits that could be tangible or intangible. It means that a new product that is offered by company should satisfy the expectations of the customers and could be something physical or offered to the customer in a form of new service. There are two stages of the new product development. The first is the product detailed design and engineering. It is the process that determines the physical shape and purpose of the product. The second stage of a new product planning is marketing analysis and research. It is the process that defines the possibility of selling the product on the market. In order to successfully implement these two stages the strategy of a new product planning and development is divided in several steps.
In order to bring the product to life it should be started as an idea. This idea is the combination of science, art and technology that could be implemented into a finished product. It is the first step that will determine the development of the product through other steps. The product features could be designed based on a Strength, Weaknesses, Opportunities and Threats (SWOT) analysis, consumer trends, competitors, market, focus groups, trade shows, employees, salespeople and other aspects. There could be generated many ideas through the brainstorming process among leaders. The best one will be selected for implementation. It may take some time to generate more than 50 other ideas in order to determine the one successful idea for a new product.
The main functional feature of the idea screening is to eliminate those ideas that would not bring the profit for the company from the sales of a new product. The second functional feature is to expand those ideas that could be implemented in the profitable product. The eliminated ideas do not necessary mean that those ideas could not be successful. Sometimes, the company does not have enough technological progress or investments in order to bring this idea into life. This idea could also be out of company's interest. There are three categories of the risk that have to be taken into account prior decision-making process. Strategic risk is the one that do not match the goal of a new product with the strategic issue of the company. Market risk is when there is an opportunity that a new product would not satisfy a market need due to the change in technology or customer requirements. In 1975, there was introduced Betamax magnetic tape that held one hour of video. It failed in sales as VHS could hold two hours. If the product will not be ready because of the desired budget or time, it could cause the internal risk.
The project planning involves the further evaluation of a new product. The project team is assigned to be responsible for the development of a new product. The project team has to analyze the proposal in terms of financial, production, competitive and marketing factors. It also establishes the budget and conducts the marketing research. It is very important to estimate profitability and the selling price. It should be based upon customer feedback and competition. When a project plan is written up, future production and marketing costs are already estimated. The last decision of the project proposal should be proved by top manager. After his approval the project moves into a new step.
Product development and test marketing
The purpose of the product development is to evaluate the proved idea in terms of manufacture, engineering, marketing and finance. The final result of this stage will be the plan design, the production design of facilities, marketing test plan and the release data. It also will include all necessary equipment for manufacture purpose and survey of the financial program. After this, the product goes through the test marketing. The product will be tested in small geographic area in order to get customer approval. The main purpose of this step is to estimate and adjust the marketing strategy that was previously approved. After the successful test marketing the project is ready for launch.
Commercialization and importance of time
The process of commercialization includes the introduction of the product to the marketplace. The main emphasis of this step is given to the organizational structure, the quality control and production costs. The decent time is also given to inventory requirements and mistakes in design. The latest trends in business make the company to implement a new product reducing the time of the whole process. It is important to put the product on the market as soon as possible in order to get a competitive advantage and market share.
The customer wants to see in a new product something interesting, new and of high quality. Customer expects to buy the product with functions that will be well performed. There is also a group of customers that could be satisfied with lower quality of the product, but also with lower price on it. While developing the product, it is important to take into account factors that customer uses in order to determine the product quality. It includes performance, reliability, unique features of the product, durability and how quickly it could be fixed in case of any problems. It is also important to present for the customer good physical characteristics, brand image, manufacturer, price and packaging.
Product design and product safety
The company should not underestimate the significance of the design of a new product. The successful products have to use easy design that is pleasing to the senses. The drawback in the design could lead to the complete failure of the product. Microsoft failed with introduction to the market of the Zune that was intended to add competition to iPod. The style in the Zune seemed poor in comparison with simplicity of interface of Apple iPod. It is out of the discussion that a new product should have the decent level of safety. The product has not to harm the customer. In case of such an outcome, the customers could stop buying product and spread the information about their bad experience among other customers. It is possible that clients could even sue the company in the case when they would get seriously harmed. There are many cases when customer sued the companies for the products without proper safety. There was even the case when the Consumer Product Safety Commission was suing the manufacturer for producing magnetic toy that was swollen by child.