In today's competitive market, the ability to offer products that meet customers' needs and expectations has never been more important.
Customer requirements and behaviors, technology, and competition are changing rapidly, and businesses can not rely on existing products to stay ahead of the market. They need to innovate, and that means to develop and successfully launch new products.
But how do you go about finding a great, original idea and turning it into a marketable product?
In this article, we explain what new product development is and break it down into seven stages. We also discuss the best practices for developing your own process, along with some tips from product and marketing experts at Booking.com, Bumble, Typeform, EduMe, and Slite.
What is new product development?
New Product Development (NPD) refers to the complete process of bringing a new product to market. This can apply to developing an entirely new product, improving an existing one to keep it attractive and competitive, or introducing an old product to a new market.
The emergence of new product development can be attributed to the needs of companies to maintain a competitive advantage in the market by introducing new products or innovating existing ones. While regular product development refers to building a product that already has a proof of concept, new product development focuses on developing an entirely new idea—from idea generation to development to launch.
The 7 stages of new product development
When it comes to new product development, each journey to a finished product is different. Although the product development process can vary from company to company, it's possible to break it down into seven main stages. Let's have a look at them one by one.
1. Idea generation
Idea generation involves brainstorming for new product ideas or ways to improve an existing product. During product discovery, companies examine market trends, conduct research, and dig deep into users' wants and needs to identify a problem and propose innovative solutions.
A SWOT Analysis is a framework for evaluating your Strengths, Weaknesses, Opportunities, and Threats. It can be a very effective way to identify the problematic areas of your product and understand where the greatest opportunities lie.
There are two primary sources of generating new ideas. Internal ideas come from different areas within the company—such as marketing, customer support, the sales team, or the technical department. External ideas come from outside sources, such as studying your competitors and, most importantly, feedback from your target audience.
Some methods you can use are:
- Conducting market analysis
- Working with product marketing and sales to check if your product's value is being positioned correctly
- Collecting user feedback with interviews, focus groups, surveys, and data analytics
- Running user tests to see how people are using your product and identify gaps and room for improvement
Ultimately, the goal of the idea generation stage is to come up with as many ideas as possible while focusing on delivering value to your customers.
2. Idea screening
This second step of new product development revolves around screening all your generated ideas and picking only the ones with the highest chance of success. Deciding which ideas to pursue and discard depends on many factors, including the expected benefits to your consumers, product improvements most needed, technical feasibility, or marketing potential.
The idea screening stage is best carried out within the company. Experts from different teams can help you check aspects such as the technical requirements, resources needed, and marketability of your idea.
Logic trees are a valuable tool to try and make sure I have a structured understanding of the space I'm working in and making good decisions when choosing problem spaces to work on.
3. Concept development and testing
All ideas passing the screening stage are developed into concepts. A product concept is a detailed description or blueprint of your idea. It should indicate the target market for your product, the features and benefits of your solution that may appeal to your customers, and the proposed price for the product. A concept should also contain the estimated cost of designing, developing, and launching the product.
Developing alternative product concepts will help you determine how attractive each concept is to customers and select the one that would provide them the highest value.
Once you’ve developed your concepts, test each of them with a select group of consumers. Concept testing is a great way to validate product ideas with users before investing time and resources into building them.
Concepts are also often used for market validation. Before committing to developing a new product, share your concept with your prospective buyers to collect insights and gauge how viable the product idea would be in the target market.
4. Marketing strategy and business analysis
Now that you’ve selected the concept, it’s time to put together an initial marketing strategy to introduce the product to the market and analyze the value of your solution from a business perspective.
- The marketing strategy serves to guide the positioning, pricing, and promotion of your new product. Once the marketing strategy is planned, product management can evaluate the business attractiveness of the product idea.
- The business analysis comprises a review of the sales forecasts, expected costs, and profit projections. If they satisfy the company’s objectives, the product can move to the product development stage.
5. Product development
The product development stage consists of developing the product concept into a finished, marketable product. Your product development process and the stages you’ll go through will depend on your company’s preference for development, whether it’s agile product development, waterfall, or another viable alternative.
This stage usually involves creating the prototype and testing it with users to see how they interact with it and collect feedback. Prototype testing allows product teams to validate design decisions and uncover any flaws or usability issues before handing the designs to the development team.
We always test the main features with usability testing, first, to choose the best flow, and second, to iterate on the flow and make sure it’s clear for the users. After usability testing, we can finalize the flow and prepare it for the developer handoff.
Regina Smirnova, Senior Product Designer at Bumble
Regina Smirnova, Senior Product Designer at Bumble, uses the IDEO Design Thinking approach when working on a new product. Design thinking brings together “what is desirable from a human point of view with what is technologically feasible and economically viable.” As Regina explains, a successful Minimum Viable Product (MVP) lives at the intersection of desirability, feasibility, and viability.
6. Test marketing
At this stage, it's essential to stay in touch with customers and gather research data to understand what works and resonates with the target audience and what doesn’t. Results can also be used to write the copy and the messaging around the launch.
Laure Albouy, Product Marketing Manager at Slite
Test marketing involves releasing the finished product to a sample market to evaluate its performance under the predetermined marketing strategy.
There are two testing methods you can employ:
- Alpha testing is software testing used to identify bugs before releasing the product to the public
- Beta testing is an opportunity for actual users to use the product and give their feedback about it
The goal of the test marketing stage is to validate the entire concept behind the new product and get ready to launch the product.
7. Product launch
A successful product launch is about setting your key results as early as possible, understanding how to track them, and then figuring out how to use the learnings to make changes or adapt.
Ian Booth, Senior Product Manager at EduMe
At this point, you’re ready to introduce your new product to the market. Ensure your product, marketing, sales, and customer support teams are in place to guarantee a successful launch and monitor its performance.
- Customers: Understand who will be making the final purchasing decisions and why they will be purchasing your product. Create buyer personas and identify their roles, objectives, and pain points.
- Value proposition: Identify what makes you different from the competition and why people should choose to buy your product
- Messaging: Determine how you will communicate your product’s value to potential customers
- Channels: Pick the right marketing channels to promote your products, such as email marketing, social media, SEO, and more
You will need to constantly track and measure the success of your product launch and make adjustments if it doesn't achieve the desired goals.
Expert tips for creating a product development process
Looking to deliver successful products? Here are some tips from product and marketing experts at Bumble, Booking.com, EduMe, and Typeform on creating an effective product development process.
Align around the same vision
“I think the most important part is to align on the product vision and the company goal. Everyone in the team should understand where we are moving and what principles we follow during the product development process,” says Regina Smirnova, Senior Product Designer at Bumble.
Yet Laure Alboy, Product Marketing Manager at Slite, points out: "Sometimes it’s hard to be in the right conversation at the right time, and there are so many conversations to be a part of. I think one way to get visibility is to be part of strategic conversations and being the person who’s leading the questions around 'why are we doing this?'"
Ben Zacharias, Senior Product Manager at Booking.com, explains that having a clear understanding of the product development strategy and company goals makes it much easier to make good decisions and trade-offs along the way.
As a product team, you should focus on what you can work on to deliver the most impact. So the critical question you have to start with is: do you really understand what impact means for your team? Do you know your overarching goal and how you're contributing to a broader business/product strategy?
Use roadmaps, backlogs, recurring meetings, and syncs, but keep communicating with your team. “At EduMe, we communicate our vision all the time,” explains Ian Booth, Senior Product Manager at EduMe. "Always focus on the value that you're bringing and communicate it constantly."
Understand your customers’ needs
At every stage of the product development process, there is one critical driving factor: the customer. Identify what your customers need, which features would help them the most, and how to make your product appealing to them.
The user voice and the collaboration with customers is something that’s really part of my routine. We’re not talking about the feature or the product. We’re talking about the solution for the problem that the customer has. So it’s less feature-oriented and more benefit-oriented.
Ganna Kryklii, Senior Product Marketing Manager at Typeform
Collecting product feedback and insights helps you ensure that the end product meets their expectations, solves their problems, and fulfills their needs.
When it comes to making and validating decisions, Ian points out that it’s always best to have qualitative data alongside quantitative information. You can use product surveys, customer interviews, market research, but make sure you back up those insights with behavioral data on how users use the product.
Build a strong team
Product development is a creative process at its core. Better results often come from teams being able to create a process together that works for that specific group.
“I think the foundational parts of a great product development process are often the intangible, human elements that help create motivation, focus, and impact,” says Ben. Supportive leadership, clear direction, an open and high empathy culture, and a learning mindset are crucial to building productive teams and great products.
Also, each team is different. So, it’s essential to create a supportive and flexible environment that allows you to identify which product development process works best for you and your organization.
How long does it take to develop a new product and get it to market?
Developing new products is a time-consuming activity, especially if you want to deliver a high-quality product. How much time you need will depend on several factors, including the complexity of the product, the industry, the company stage, and the resources available.
Whether you're developing a new product or improving an existing one, having a well-defined process will enable you and your team to achieve greater speed and efficiency and increase the likelihood of success. You can now choose from a wide array of product management tools to streamline your product development process and achieve better team collaboration.
Having an efficient new product development process is essential to bringing your final product to the market. Hopefully, by following these steps and expert tips and adapting them to your business strategy, you can build a successful product.
Frequently asked questions about the new product development process
What is new product development?
What is new product development?
New product development is the complete process of turning an idea into a marketable new product. A company may develop an idea for an entirely new product or improve an existing product to meet new or evolving customers' needs.
What are the 7 stages of product development?
What are the 7 stages of product development?
New product development is the process of bringing a new, original product idea to the market. The process can vary depending on the industry, company, and type of product. However, typical steps in the new product development process include idea generation, idea screening, concept development and testing, marketing strategy and business analysis, product development, test marketing, and product launch.