Getting right into it, here are the 8 steps quickly summarised:
Step 1. Idea Generation: write down all your ideas under the shower, brainstorm, and use techniques to boost your team’s creativity.
Step 2. Idea screening: go over all the ideas you generated and quickly determine which ones are viable and which are not (yet).
Step 3. Product concept testing: find out if your target audience loves the idea as much as you do with direct surveys and assessments.
Step 4. Market research: if your product makes it to this round, it’s time to find out what pricing and messaging should look like.
Step 5. Prototyping and development: create a rapid prototype to test the waters and keep perfecting and testing until development.
Step 6. Market testing: find out if your marketing resonates with your target audience and if your product launch will be viable.
Step 7. Commercial launch: time for champagne, but do keep a close eye on what is happening in the market and what people say about your brand.
Step 8. Review and refine: regularly check in and make adjustments in your promotion and communication if necessary.
Most people don’t know what a business has to go through to launch a single product. Which isn’t strange, since brands like Apple, Samsung, Nike and Airbnb seem to be able to put new products and services on the market in their sleep.
But before you get to hold that new iPhone, several teams in Apple have gone over countless rounds of alterations and improvements. Apparently, the design team within the company is cut off from the rest of the teams, for complete focus.
When they are happy with a design, a product is built, tested, and reviewed. Then they throw that one out and build another one, even better. This can happen several times in the process of developing a single product, and one cycle can take up to 4 to 6 weeks.
Even if you don’t have as much time and resources as Apple, and no place for your design team to work separated from the rest of your employees, you too can have a successful new product development process.
And if you ever lose hope, remember this: the earth was once just water, rocks, animals, and plants. Someone somehow made Bluetooth out of that.
What product are you dreaming of developing? We’ll give you a framework to work within to make it real.
What is the new product development process?
When we’re talking about the New Product Development process (NPD process), we mean not only the actual development of the physical product. It also includes the idea generation phase, the crafting of the messaging around it, and the launch and testing after it’s being sold.
Going from just a market opportunity to a product on the shelves takes a series of steps. It doesn’t necessarily mean that you eventually launch the product you had in mind before you started. Through screening, testing and prototyping, the product can shape-shift to fit into the market.
An often overlooked part of the new product development process is also testing the market and the marketing that is built around a product. Even when in the product concept testing state and prototyping, people say they love your product, nobody will buy it when the promotion around it is off.
That’s why we’ll cover all those steps, from generating your first ideas to looking back on your initial marketing strategy and potentially revising this to give your product a second chance on the market. That way, you can prevent product failure and sleep soundly, knowing you made a large investment that will pay itself back over time.
We’ll also give you some product development examples to show you how real companies go about turning a product idea into reality.
What are the 8 stages of product development?
Let’s get to work. These are the steps in new product development we’ll be explaining.
Step 1. Idea Generation
Step 2. Idea screening
Step 3. Concept testing
Step 4. Market research
Step 5. Prototyping and development
Step 6. Market testing
Step 7. Commercial launch
Step 8. Review and refine
How’s your product looking?
The most successful launches are those that incorporate the needs of your customer from the start. That’s where always-on, iterative consumer research comes in.
It all starts with an idea. If your company is looking to add a new product to your line of existing products, or you’ve spotted an opportunity or gap in the market, it’s time to come up with some new product ideas.
You might fear this first step of the new product development process the most: what if you don’t come up with anything? Here are four techniques you can use to get those creative juices flowing.
1. First Principles Design
Elon Musk is a First Principle Thinker, so if you want to know how he got to PayPal, Tesla, SpaceX, Hyperloop, and other big ideas, keep reading.
The first principle design is about unpacking and dismantling popular assumptions about an idea. Basically, you break it down into smaller pieces, getting to its first principles. Establish what is real and what is possible with those elements, and then start building from the ground up.
So, there are three steps:
Identify your existing assumptions and name them
Break down the problem into its fundamental basics – its first principles.
Using those first principles, build a new solution
2. Social listening
It could very well be possible that while you’re trying to figure out what your customers want, someone has already asked for it online.
Consumers are the best resource for generating new ideas. Use social listening tools to find out what complaints they have about existing products and other brands to get ideas for new products to solve their issues.
3. Mind mapping
Okay, so you’ve spotted an opportunity in the market, or have a vague idea for a new product or service. Then, you’re stuck. Put that one central idea in the middle of a whiteboard or piece of paper and start linking relevant words to it. Then, words relevant to those.
This will help you make new connections and follow paths that you normally maybe wouldn’t, simply by visualising it.
4. Collaborative Innovation
Two brains know more than one. If you feel stuck in the idea generation process, you don’t necessarily need a change of scenery to get fresh inspiration. Sometimes, you just need to ask other people. Get everyone in your business involved: they look at a problem or market opportunity from a different perspective, based on their own experiences. Together, you might come up with something genius.
Step 2. Idea screening
Once you have a solid list of ideas, it’s time to separate the wheat from the chaff. To do this effectively, formulate a list of criteria that an idea has to comply with in order to be valuable enough to pursue further.
There are some ready-made scoring models and checklists you can use, but always make sure that these are relevant to your specific business and market. Here’s some inspiration:
The technical feasibility of an idea: can it even be done? While we encourage you to dream big, technicalities are crucial to keep in mind.
If it’s too big of an investment to get the necessary technology on board, or if it simply takes too much time, and you might lose your chance to grab the market opportunity, another idea is better.
The profitability of an idea: how much will it cost to create this, and what price could you ask for this? This also highly depends on the size of the target market and what other products are already being sold.
Products your competitors are selling: take a good look at your product idea and ask yourself if it doesn’t look too familiar. Research whether it already exists – don’t assume you are the first person to come up with this.
Also, look at the value you are selling: maybe someone else sells the same features, but you have a competitive advantage that could add extra value.
How well the product fits your current brand: In 1982, Colgate started selling ready-made meals. Yes, there was a market for ready-to-go food, but people were simply not buying it. They associated Colgate with toothpaste, and buying your food from your toothpaste supplier feels wrong on a lot of levels. Needless to say, Colgate quickly regained focus and kept to dental hygiene.
The lesson for you? Simply because something is in demand, doesn’t mean your brand should be the one selling it. It could, however, be a good idea to look into launching it under a new brand.
Step 3. Concept testing
New Product Development has a failure rate of 80%-95%. Yes, 8 out of 10 products that are put on the market, never get the success their brand was hoping for. In many cases, that could’ve been prevented by thorough product concept development and testing, and asking the right people for their opinion.
The next step in the new product development process is concept development and testing. Your team loves the idea of the product, but do consumers agree with you?
Concept testing can be done in several ways. It can be simply evaluating the responses to a product before you bring it to market, and making changes to the concept based on that. You can also show your target audience different versions of a concept, to find out which is most likely to be a success. Of course, you can test the chosen design after that as well, to further refine it.
Concept tests should be done in every stage, and for every part of the product, including promotion. You do this even before creating a prototype.
If you only think about marketing after you’ve already started prototyping, you might learn that there’s no way of successfully marketing the product (within your budget and resources). So, also do concept development to test marketing, copy, campaigns, pricing, and distribution channels.
Step 4. Market research
Market analysis is a crucial element of the new product development process. Even when you’ve already identified the market opportunity you want to aim at, you should get to know the market better to perfect your positioning and plan a successful launch.
What you should definitely cover is the following:
Competitors: who are they, what are they selling, and what are their USPs? Why do people choose them? What marketing tactics are they using? What’s the status of your brand awareness and other brand health metrics compared to other brands? (link to product category competition analysis?)
Who is your target audience? Don’t ‘invent’ a buyer persona: base it on actual data and real people. Many businesses make the mistake of creating a buyer persona solely based on their ideal client, and making assumptions. We suggest you talk to real consumers through surveys and focus groups to get an accurate picture. What do they consider when buying products like yours? Where do they shop? How do they look for information?
What challenges are there in the market? What technologies can you expect to make a big change in the long run? What is trending in your market? Can you keep up with the latest development?
Who are important influencers in your market? What channels could you use to distribute your content and your products?
Step 5. Prototyping and development
For a lot of teams, the design process is where the real fun begins. In this part of the new product development process, you will be creating a minimum viable product (MVP) to further test it out on your market, and potentially pitch to investors.
When we’re talking about an MVP, we mean that you’ll create a product prototype that is not yet a fully functional, detailed version of the product.
Next up is rapid prototyping, which is all about making simple and cheap prototypes, getting feedback, and then improving the prototype. This type of iterative new product development process can save you a lot of time and waste of resources, because sometimes you think too far ahead.
With an MVP and rapid prototyping, you basically work together with your potential customers to craft a product they like.
What’s rapid about it? You need to be willing to make decisions quickly. If testing shows that something isn’t quite working, act immediately, change it and offer up something better.
Every new aspect or feature should be added to the prototype and tested, but you don’t need to make it functional just yet. In many cases, rapid prototyping stars with only pen and paper.
Another benefit of this method is that you start connecting with your customer base at an early stage. If you use real customers for your prototyping and testing, you also promote the upcoming product and build stronger relationships with them. You’re showing them that you value their opinion and create products for them, and with them.
Step 6. Market testing
Time to test the waters. While the development phase is in full motion, you can already start testing the messaging and communication you had in mind.
This step is incredibly important, because it could make or break the success of your new product development process. A genius product with terrible marketing won’t do much for your sales.
If you think ‘we’ve got this, we’ve created dozens of campaigns’, think again. Many big brands with decades of experience have missed the mark completely and launched campaigns that simply didn’t sit well with the public. Names like Dove, Coca-Cola, and McDonald’s have learned the hard way that market testing should never be skipped.
Here’s what you should look out for:
How your messages are received: does it make people excited?
Could it be that your ads are tone-deaf, rude or simply… not funny?
Is your price acceptable the way you are presenting the product right now?
Are you using the right channels to communicate and sell your product?
Is the ‘special offer’ you created special enough?
Are your USPs loud and clear?
Is it recognisable: does it match your brand?
Step 7. Commercial launch
Ready for take-off? The launch of a product is an exciting but stressful thing to plan. Everything has to be right, from the supply chain to planning and promotion.
In today’s market, it might feel impossible to get attention from your target audience. They’re being bombarded with content and ads wherever they look. How do you grab their attention for a moment, and make it worthwhile?
Be clear about your Call to Action
Your campaign should come with a clear call to action (CTA). Whether you’re promoting online or offline, you should make buying your product the easiest thing in the world. Don’t let people look for it: present them with all the options to buy it right away, or they’ll get on with their day and forget about your product.
Talk about the benefits, not the features
What does the product do for me? Chances are, nobody is waiting for a list with specs to compare to other products. In your messaging, focus on how the product adds value to their day.
Make it easy to remember
While creativity is good, it shouldn’t cast a dark shadow on your actual message and product. Explain your product in the simplest of ways. Remember when the Dollar Shave Club launched? Their video is incredibly simple, yet super powerful – and funny.
Work with pre-orders
There’s something about pre-ordering something that is exciting. Being one of the first people to get a new product or access to a new service makes people feel special, and is great for word-of-mouth.
Our advice? Make an exclusive offer for pre-orders or give your loyal customers early access to your newest product.
Step 8. Review and refine
It probably won’t be the last time you start a New Product Development process, so take enough time to analyse what went great and what could use some fine-tuning next time.
On top of that, you should also analyse how your marketing strategy is working out and make edits to your marketing efforts if necessary.
Examples of the new product development process steps in action
Some brands churn out new products like it’s nothing, but will still go through an extensive new product development process, each time. That’s because every product affects their brand.
You can choose to focus more on the actual product, or on the messaging around it when going through the new product development process – or both, of course. If you need inspiration on how other brands have found the perfect product-market fit, we have some right here!
Mallow & Marsh – Food and beverage product development process
Mallow & Marsh create marshmallow treats with a lot of love and very little compromise. Their creative marketing team has ideas for new products and innovations on a daily basis.
How can a small business like theirs justify spending on new product development? To make sure each new product development process is thorough, Mallow & Marsh makes sure to use data to validate their latest tasty product idea, every single time. This helps them justify purchase intent or potential ROI for new ideas.
Mallow & Marsh use Attest as their go-to agile research tool, testing and validating new products throughout the development cycle. And as a small company, ROI is crucial.
‘The ROI of using Attest is speed and certainty with our new product offering and go-to-market strategy. Every product concept that’s performed well on Attest has gone on to development, and that’s down to our confidence in the data.’ Alex Caplan, Trade Marketing Manager
Nomadic Dairy – Food and beverage product development
We can’t stress enough how important testing and developing your positioning and marketing is in the product development process. Nomadic Dairy is a rapidly growing yoghurt brand, focused specifically in the to-go space. They have a growing product range (raspberry fudge, anyone?) but operate in a rather saturated market.
How could they still deliver a more distinct, more relevant proposition (and outshine their competition)? They cut out the guesswork and went straight to their audience to ask the right questions.
Nomadic Dairy uses Attest to discover new marketing messages, refine their positioning, and make new product decisions. And it’s paying off: their products are tasty as ever, and they get the marketing they deserve.
‘Attest has helped us grow as a business because it helped us to refine our propositions. That’s really the best example: that we can equip our teams with better insight. That helps them to do better deals and make better products.’ Tom Price, Head of Marketing & Innovation
Got a great idea for a product?
You could be onto something great. Want to find out if it could be a hit? Test your early idea with our concept testing survey.
And start your NPD process right with the our 9-Step Template for New Product Development.
The NPD Template
Grab our New Product Development template and break the process down to 9 simple steps, from idea generation all the way through to tracking your success.