New product development is a process followed by the commercial organization for introducing new products for the customers of the market. All the existing products of the market was once an idea and from there went through a number of steps to become a success. Studies have shown that the success of a new product or services mainly depend on the thoroughness of the processes that it went through. Big brands focus a lot on the processes before the introduction of any new products in the market. This paper showcases the processes associated with the new product development of an organization. In addition to that, the paper also includes the discussion of the lifecycle of the new products and services of the companies. Lastly, the paper presents a critical reflection on the skills of the team working in the context of new product development.
New product development is important for every business at some point or the other. New product development allows the organization to enhance the brand image of the company. However, each of the product development has some a few processes which according to the principle of product development are known as stage gate process (ul Haque and Hasan, 2016). The processes of product development are also one of the two main processes of Robert’s Rule of Innovation. There are few of the stages which are important for the new product development. These stages are discussed below in detail.
Generating: The first process of new product development is the generation of the ideas. The ideas are generated through thorough analyses of the internal and external environment of the business. Tools such as SWOT and PESTLE are used by the management in order to identify the factors that influence the new product development. Based on the study of the factors, many ideas are generated for the development of new product for the business. The main concentration of the management, in this case, remains on the lean, mean and scalable production of the new product. Ernst et al. (2017) highlighted that the rationale behind generating more than one idea is that they can be screened against the risk factor that is associated with each of the ideas.
Screening the idea: The next process associated with the new product development after the generation of ideas is the screening. In that process, the project team and the managers set few of the criterions based on the needs of the customers and the internal strengths of the organization. Every idea that was generated in the first process goes through this process and management drops few of them which do not fit the criteria of the organization and its goals. Wowak et al. (2016) highlighted that screening process is an important process for the new product development as in this process organizations analyze the ideas in terms of its capability to assist the organization in achieving the objectives and goals.
Testing the concept: The concept testing is the third process of new product development that allows the management of the organization to examine whether the selected ideas or concepts fits with the needs of the customers of the market. According to Badrinarayanan and Arnett (2015), the test of concepts is different from that of test marketing. This process includes the patent research, designing the due diligence and the other legal requirements of the new product development. This process provides a basic knowledge to the management regarding the potential value the new product can generate for the customers of the market. In other words, this process finds out the gaps which can be filled with the new product of the company.
Business analytics: The advancement of technology and communication has given rise to the use of business analytics for the purpose of monitoring different segment of the new product development. This process allows the management of the organization to map the input and the output metrics of each of the ideas. According to Morgan et al. (2015), the study of the metrics helps in understanding the deviation of the product from the overall objective of the new product development. This process is useful for the organizations in case of new product development due to the fact that these results help the organization in future decision making regarding new product development as well (Schemmann et al. 2016).
Beta or marketability tests: The next process of new product development is a marketability test which uses the beta version of private test groups. Gopalakrishnan et al. (2015) noted that this test is effective in the sense that it provides the manager of the project last minute suggestion which can increase the value of the product. Companies takes the result of the marketability test and includes more features to the products in order to increase the value.
Technicalities and product development: This stage of new product development is one of the most important stages of the process. Du et al. (2016) stated that in this process, each of the department associated with the new product development. The manufacturing department designs their process to produce the product, the finance department; taking into consideration the result of the business analysis allocates the financial resources and the marketing department articulate the plans to reach out to the potential customers (Badir and O’Connor, 2015). For example, in this stage, the responsibility of the manufacturing department of the organization includes printing the MSDS sheet, the retention of the ISO: 9001 certification and many more.
Commercialise: From this stage, the post-sale processes of new product development starts wherein the government designs and implements strategies to keep the supply line full. Cooper (2016) highlighted that one of the important factors for the success of the new product is the proper activity of the marketing team to put an advertisement in order to supplant fresh images of the products into the minds of the customers of the market. Apart from that, another process that is included in this stage is the active operation of the technical support department of the organization that collects impromptu date from the side of the customers through feedback and surveys.
Post-launch review and the price stabilizing: Introductory price is used for most of the new products on the market. Morgan et al. (2015) stated that advantages of the introductory price are that, it allows the organization to attract all segment of customers for the purpose of examining how the product fits with the needs of the customers of different segments. This process also suggests minor changes to the management of the company so that the value of the product increases manifold. Furthermore, this process also uses the data collected from the previous stage and includes them in the decision making so that the new product accurately meets the demand of the customers. This process is an important process and often creates the differences. Big companies of the market focus heavily on the post sale review of the customers and they keep their production flexible so as to make short term changes in the specification of the products.
Product levels
No matter how much low the prices of the products are, the company will not find it profitable if the product sells in the market. One of the important requirements for the sales of the products is that the product matches the needs of the customers of the market Fang, E., (Lee and Yang, 2015). For this reason, many organizations tailor their products to meet the needs of different segments of the customers of the market. The economist Philip Kotler devised a model which furnishes different levels of a product which meets the needs of the customers.
Kotler defined the needs, wants and the demand from the customers and stated that each of them is different from each other. According to the definition provided by Kotler, the meaning of need is the gap in the basic requirement of the customers. For example, high quality calling facilities can be termed as the need of the customers as this is a basic requirement for the customers of the market. Want on the other hand is defined as the expectation from the product which will meet the basic requirements of the consumers. Lastly, the demand is the set of wants of the customers along with the ability to pay and the preferences. These three concepts of consumer behaviour creates different levels of the products that are being sold in the market.
The five levels of the product are furnished below:
Core Benefit: This is the fundamental needs of the customers which are met by consuming the products. For example, the packaged water bottle has the core benefit of meeting the fundamental needs of the thrust of the customers. The companies aim at developing this value of the product first.
Generic product: This is the version of the product which contains only those attributes or characteristics absolutely necessary for it to function. For example, the digital processes of a digital image can be done either through the low-end computer software or through the processes in the laboratory. The low-end computer is a generic product that contains the attributes to for the minimum function.
Expected product: The expected product is the attributes and the characteristics of the product that consumers expect before buying the product. For example, a new Android mobile will have a high-speed processing unit is the expectation of the customers from the product.
Augmented product: This version of the products is the extra feature added with the main product that differentiates it from the other rival products of the market. For example, the inclusion of a magnetometer in a mobile phone can set it apart from the other mobile handsets of the market.
Potential product: This is the version of the product which is not basic and can be augmented and changed in the future in order to retain customers and increase loyalty. For example, the products related to software have some of the potential areas which gets changed upon up gradation from the side of the company.
Product lifecycles stages:
Like the customers of the market, the products which are being sold in the market also have lifecycles of their own. Within this life cycle, their demand and price vary. For example, the demand for a new product can be very high and it can reduce over time due to a reduction in the popularity of the products. Lawson et al. (2015) stated that, the life cycle of products have three stages where they behave differently. The stages of the life cycle of the product are discussed below:
Introduction stage: This is the first stage of the lifecycle where the company carries out brainstorming, research analysis and the designing of the product. Muethel and Hoegl (2016) stated that this stage is the most costly for any company as in this stage the company has to carry out many other activities other than the manufacturer. Apart from that, the production cost in this stage is also very high as the demand is low and hence the company cannot use the economics of scale.
Growth stage: This stage is where the product experiences increasing growth in the demand. Cuervo-Cazurra et al. (2017) highlighted that the increase in the demand in this stage is the result of reduced cost which in turn is the result of using the economies of scale. The increased margin of the company in this stage further amplifies the growth as a company become able to invest money for the advertisement of the product at this stage.
Maturity stage: This stage is the most important from the perspective organization as the success or the failure of the new product depends mainly on this stage. According to Fuller (2016), this stage is the most competitive stage for the new product. Another important feature of this stage is the continuous modification that is made from the side of the company in order to maintain the market share.
Decline stage: This is the saturation stage of a new product where the demand starts shrinking. Schniederjans et al. (2018) stated that as time passes the product becomes inferior due to the introduction of other new products in the market. However, it is important to note that, at this stage also the product can earn a profit for the company as loyal customers of the market stick to the products even at this stage.
There are two ways to cope with the increased competition in the market regarding the new product development. Rubera et al. (2016) highlighted that with the introduction of technology in production many of the companies are finding it tough to survive in the market. There is only two way to deal with the competition and survive in the market. These are innovation and repositioning of the product. The repositioning of the product involves articulation of new strategy. In this process, the company reconsiders the changing demand and target market for the product. All the positioning strategies of the product are designed again under this strategy in order to deal with the competition and increase the market share. Although according to Chen et al. (2015), there is no theory regarding this strategy of the company, practices have often been pointed out during the decrease in the demand for products.
Another management approach to deal with the competition of the market is the innovation. Innovation allows the management to produce an updated product. This updated product attracts new customers of the market and makes the other product relatively inferior. However, Luzzini et al. (2015) stated that this approach from the side of the management is costly and only large players can undertake this strategy. However, it also needs to be noted that, with the increase in the available capital, innovation is becoming a commonplace for all the players of the market.
Trends in innovation for new product development
With the access to capital investment, the preference to innovate is also increasing. According to Schoenherr and Wagner (2016) the investment for innovation has increased 14% since the year 2010. This innovation has also resulted in a explosion of products in the market. Apart from that, the gap between the different products has also increased due to the increase in innovation practice among the players in product and service market. Nicklaus (2015) highlighted that, customer-centric innovation has been the trend since the great financial crisis of 2007. Most of the companies of the market are looking to make their product as accurate as possible. Apart from that, the trend also shows the increased preferences for the shared economy. Xiaoyu and Xiangming (2015) highlighted that, irrespective of the type of product or service the companies are looking to take advantages of the share economies. Through innovation, the companies are looking to develop new products that can be traded through shared economic platforms. Again in terms of service, the companies are also looking to make it a self service. This innovation not only allows the organisation to reduce their operational cost, but also allow the customers to enjoy more control over the services they enjoy.
Role of innovation for new product development
As discussed above the objective of the management of the companies to introduce new products with high productivity. Alblas and Langerak (2015) stated that, innovation does that for the company increasing the acceptability of the products. Apart from that, the innovation also reduces the production cost which increases the margin of the companies. This increased margin at initial stages is important for the successful positioning and marketing of the products. Kalaignanam et al. (2017) pointed out that, new products from renowned brand often come with noticeable advertisements which instil a picture of the product on the minds of the customers of the market. Therefore, the innovation indirectly influences the brand recognition and hence the sales of the company as well.
Reflective learning and skill development
Reflective learning refers to the critical thinking procedures that allow the individual to learn from different dimensions. This type of learning allows the students to leave the surface and go to deep which in turn consolidates the knowledge of the student. This feedback-based learning procedure further encourages the student to improve. One of the best advantages of reflective learning is that it can be applied in a number of ways. For example, the reflective journal or personal logs can allow the student to write down from self experience which constructs the knowledge. This process encourages developing their skills through rigorous process which ultimately reflects in the skill set of the individual.
Team working and skill development
Team working also have an impact on the skill sets of the individuals. Working in a team allows the individuals to work with other personalities with different approach than the individual. Therefore, this allows the individual to gather knowledge of alternative approaches to deal a problem. Apart from that, there are many of the skills which get developed through the team working practices. One of the most important skills that develop is the cooperation (Kalaignanam et al. 2017). Working in team requires a lot of cooperation and compromise which helps the individual in the future activities. Apart from that, the team working practices also increases the emotional intelligences of the individual as well. Emotional intelligence of the member is important for high and steady productivity which will be helpful for the future endeavours of the individuals.
Furthermore, the team working also makes the individual capacity of generating a huge number of ideas for a single problem. Working with different other individuals in the team allows the individual to adopt the mindset of the others which in turns allows them to think differently which is an essential of the problem-solving. Therefore, the team working also enhances the problem-solving abilities of the individual as well (Du et al.(2016). In addition to that team working also develops conflict resolution skills among the individuals. Conflict is inevitable when working as a group with other individuals especially if they belong to different backgrounds. The team working conditions forces the individual to resolve the problems which eventually reflects on the skill sets. Lastly, the team working enables healthy risk-taking activities which helps the individual to become calculative when it comes to the case of risk-taking (Wowak et al. 2016). This is due to the fact that, while working in a group, each member becomes conscious of their decision making as they can also harm the performances of the other members of the group. This practice, for a longer time, establishes a sense of responsibility calculative risk-taking attitude.
Creative product development adds a unique value to the products. Most of the products of the market are somewhat similar to each other and does not meet the needs of the consumer accurately (Cooper, 2016). The aim of the creative development is to produce something different from which is existing in the market. This is also the main objective of the entrepreneurship as well. Through entrepreneurship, the individuals try to introduce a new product in the market which is totally different from the characteristics of the existing products of the market (Gopalakrishnan et al. 2015). The value of the entrepreneurship depends on the uniqueness it provides to the consumers or the clients of the market. The creativity product development thus becomes crucial for the entrepreneurship.
Conclusion
Therefore, the new product development for any company is a lengthy process. There are different stages of the new product development. Thorough implementation and adherence of these processes are important for the product to perform in their maturity stage. The paper showcases the lifecycle of new product development that maps the changes in the sales and the demand for the product over time. Apart from that, the paper also analyses different levels of a new product which generates the demand and effectively meets the needs of the customers of the market. According to the paper, lifecycle management is also another issue for the companies of the market. However, in that case, the preferences for innovation as a tool for management has gain attractiveness over the time. Lastly, the paper concludes with the discussion regarding the development of skills through, reflection, team working and creativity.
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